Cypress Energy Partners, L.P. Announces Second Quarter Results
Cypress Energy Partners, L.P. (NYSE:CELP)
today reported:
-
Cash Distribution of $4.8 million to Unit Holders maintained at
$0.406413 per unit, approximately 5% above the target minimum
quarterly distribution of $0.3875 per unit.
-
Our GP and sponsor continued temporary financial support with relief
of the quarterly $1.0 million administrative fee paid pursuant to our
omnibus agreement consistent with first quarter of 2016, as well as
additional temporary support of $2.0 million in expense reimbursements
to support the coverage of the current distribution level.
-
Completion of additional $500 thousand in annual cost reductions above
the $5.0 million in annual reductions disclosed in May.
-
$23.6 million of cash on hand as of June 30, 2016.
-
3.33x leverage ratio per loan covenants compared to facility limit of
4.0x.
Peter C. Boylan III, CELP’s Chairman and Chief Executive Officer,
stated, “Today we announced our second quarter 2016 operating
performance, and that we maintained and will pay tomorrow our
distribution at a rate of $0.406413 per unit, consistent with the same
distribution per unit the last seven quarters, despite the continued
challenging environment in the energy industry. The second quarter’s
performance was essentially flat compared to our first quarter and all
segments continued to grow at a weaker rate than we had previously
expected. Fortunately, CELP’s businesses do not require substantial
capital expenditures and we again finished the quarter with a solid
balance sheet and approximately $24 million of cash. Approximately 50%
of our limited partner units remain in subordination and therefore
protect common unitholders who have the right to receive available cash
up to the minimum quarterly distribution first before the subordinated
unitholders would receive any cash distribution. The subordination
period will expire, at the earliest, upon payment of the distribution
for the period ending December 31, 2016.”
Mr. Boylan continued, “Our sponsor, Cypress Energy Holdings, LLC
(“CEH”), and its affiliates who control our general partner are aligned
with our common unitholders, with an approximate 65% ownership interest
in CELP. As a result of this alignment, CEH has again stepped forward in
support of the unitholders with temporary relief of the administrative
fee paid to CEH pursuant to the Omnibus Agreement, which would have
charged $1.0 million to CELP this quarter absent the relief, as well as
contributing $2.0 million in cash to the MLP to reimburse for certain
expenditures. Consistent with the Omnibus Agreement relief provided last
quarter, this additional temporary relief from the sponsor did not
require any additional consideration from CELP. Some form of temporary
relief will likely continue until the end of 2016 or such earlier time
that our business results improve, as determined by CEH. CEH is not
committing to support CELP beyond 2016 if the energy downturn continues
and if CELP’s fundamental performance does not improve the board will
re-evaluate the current distribution policy.”
Mr. Boylan continued, “As discussed in May, we have taken steps to
reduce our cost structure and protect liquidity during this continued
downturn which totaled approximately $5 million in annual cost savings.
These actions contributed to sequential improvement in the last month of
the second quarter and should continue to impact future periods. In
July, based upon a continued evaluation of our Water and Environmental
Services segment, we temporarily shut down one additional facility, made
plans to temporarily close another facility, and spent approximately
$0.2 million on enhancing the automation capabilities of the remaining
facilities. This automation investment should drive an additional $0.5
million of annual cost out of this segment primarily through labor and
staffing reductions. I would also like to thank our dedicated employees
for their hard work, sacrifices, and completing another quarter with
excellent safety.”
In conclusion Mr. Boylan commented, “Pipeline inspection and integrity
services are federally mandated essential services to protect our
nation’s critical energy infrastructure which now represent
approximately 97% of our revenue. Additional state regulations like
those contemplated in California are generally additive to the federal
rules. The new proposed DOT PHMSA and California rules should materially
benefit our business if enacted. Our team continues to focus on organic
growth opportunities with our customer relationships, as well as
acquisitions. We continue to win new customers and business that will
benefit us in coming periods. We also continue to look at a number of
acquisition opportunities and CEH is prepared to assist CELP in
acquiring attractive assets that may be bigger than what CELP can
currently afford on its own with plans to offer those assets to CELP as
drop down opportunities over time. CELP is not currently evaluating any
opportunities that would require material dilutive equity issuances.”
Second Quarter:
-
Revenue of $72.3 million for the three months ended June 30, 2016
compared with $91.0 million in the same period of 2015 as a result of
fewer inspectors, and project delays or cancellations. Results were
essentially flat to the $73.5 million for the three months ended March
31, 2016.
-
Gross margin of $7.4 million or 10.2% for the three months ended June
30, 2016 compared to $10.8 million or 11.8% in the same period a year
ago and $7.8 million or 10.6% for the three months ended March 31,
2016.
-
We recorded an asset impairment charge of $2.1 million related to the
carrying value of a saltwater disposal facility in North Dakota. We
also recorded a goodwill impairment charge of $8.4 million related to
our Integrity Services segment.
-
Net loss of $11.6 million for the three months ended June 30, 2016
(which includes impairments of $10.5 million), compared to net income
of $1.9 million for the three months ended June 30, 2015. Current
period results also include $0.3 million in severance and termination
costs associated with the cost savings measures executed in May 2016.
Net loss was $1.4 million for the three months ended March 31, 2016.
-
Net loss attributable to CELP limited partners of $4.0 million for the
three months ended June 30, 2016 (which includes impairments of $6.4
million), compared to net income of $2.1 million for the same period
of 2015 and a net loss of $26 thousand for the three months ended
March 31, 2016.
-
Adjusted EBITDA of $3.2 million for the three months ended June 30,
2016 (including non-controlling interests and amounts attributable to
our general partner) compared to $5.4 million for the same period of
2015. Adjusted EBITDA attributable to limited partners of $5.5 million
for the three months ended June 30, 2016, compared to adjusted EBITDA
attributable to limited partners of $5.3 million for the same period
of 2015. Adjusted EBITDA and adjusted EBITDA attributable to limited
partners were $3.1 million and $3.2 million respectively for the
period ended March 31, 2016.
-
Distributable Cash Flow of $3.5 million for the three months ended
June 30, 2016 compared to $3.5 million for the same period of 2015 and
$1.8 million for the three months ended March 31, 2016.
-
A common unit coverage ratio of 1.45x and a coverage ratio of 0.73x
compared to the Q1 2016 coverage ratio of 0.38x. The improvement in
common unit coverage is largely driven by the additional $2.0 million
of sponsor financial support.
-
A leverage ratio of approximately 3.33x compared to a 4.0x covenant
limit and an interest coverage ratio of 3.80x compared to a 3.0x
covenant requirement on June 30, 2016 pursuant to the terms of our
credit facilities.
Year To Date:
-
Revenue of $145.8 million for the six months ended June 30, 2016, down
21.2% from the same period in the prior year.
-
Net loss of $13.0 million for the six months ended June 30, 2016
(which includes impairments of $10.5 million), compared to net income
of $4.7 million for the six months ended June 30, 2015.
-
Net loss attributable to limited partners of $4.1 million for the six
months ended June 30, 2016 (which includes impairments of $6.4
million), compared to net income of $4.8 million for the same period
in the prior year.
-
Net cash provided by operating activities of $11.7 million for the six
months ended June 30, 2016, compared to $20.7 million for the same
period in the prior year.
-
Adjusted EBITDA of $6.3 million for the six months ended June 30, 2016
(including non-controlling interests and amounts attributable to our
general partner), compared to $11.0 million for the same period in the
prior year, down 42.5%.
-
Adjusted EBITDA attributable to limited partners of $8.7 million for
the six months ended June 30, 2016, compared to $10.4 million for the
same period in the prior year, down 15.8%.
-
Distributable Cash Flow of $5.3 million for the six months ended June
30, 2016, down 32.4% from the same period in the prior year.
Highlights include:
-
We averaged 1,134 inspectors per week for the second quarter of 2016
compared to 1,367 in the same period of 2015 and 1,130 in the first
quarter of 2016.
-
We disposed 3.3 million barrels of saltwater at an average revenue per
barrel of $0.66 for the second quarter of 2016, compared with
disposing 5.2 million barrels of saltwater at an average revenue per
barrel of $0.77 for the second quarter of 2015 and 3.7 million barrels
of saltwater at an average revenue per barrel of $0.68 for the first
quarter of 2016.
-
Maintenance capital expenditures for the three months ended June 30,
2016 were $51 thousand, reflecting the limited maintenance capital
expenditures required to operate our businesses.
-
Our expansion capital expenditures during the second quarter of $91
thousand were related to our continued expansions in Pipeline
Integrity services to purchase new NDE technology to serve a new
investment-grade client.
Looking forward:
-
California is also now proposing new additional rules and requirements
regarding inspection of energy infrastructure. Gas pipeline safety
regulations proposed by the U.S. Department of Transportation's
Pipeline and Hazardous Materials Safety Administration (PHMSA)
included a 550 page notice of proposed rulemaking to revise the
pipeline safety regulations for onshore gas transmission and gathering
pipelines. Essentially, the proposal would broaden the scope of
monitoring, testing and repairing pipes as well as the types of assets
subject to protocols. In addition to expanding the coverage to
gathering pipelines, PHMSA is also proposing to delete the
“grandfather clause” and require all gas transmission pipelines
constructed before 1970 be subjected to a hydrostatic spike pressure
test. Currently, pipes built before 1970 are exempted from certain
pipeline safety regulations (e.g. a requirement to pressure test the
pipeline / verify its integrity to establish maximum allowable
operating pressure (MAOP)). This could involve a significant increase
in testing as approximately 60% of total U.S. natural gas pipelines
were installed before 1970, according to a study commissioned by The
INGAA Foundation, Inc. Additionally, PHMSA would like to expand
protocols to include pipelines located in areas of medium population
density or Moderate Consequence Area (MCAs). If passed, this would
likely require integrity management, material documentation
verification as well as MAOP verification for pipes in these areas.
PHMSA estimates that approximately 41,000 miles of MCA pipe would
require an assessment within 15 years under this proposed rule.
-
To date, we have seen some growth in our average inspector headcounts
from the averages experienced in the second quarter of 2016 with the
latest July average headcounts at 1,228. We have also seen some growth
in technician headcounts in our non-destructive examination service
offering which provides stronger margins than our typical inspection
business and we also have seen growth in our inline inspection service
offering. We also continue to renew several sizeable existing
contracts and are bidding on some major new contracts.
-
During the second quarter, approximately 95% of total water volumes
came from produced water, and piped water represented approximately
44% of total water volumes. When commodity prices improve and drilling
activity increases, we expect to have significant operating leverage
with our cost structure and minimal maintenance capital expenditure
requirements as volumes increase. We have 534 drilled and uncompleted
wells (“DUCs”) within a 15 mile radius of our facilities comprised of
392 in North Dakota and 142 in the Permian. As prices improve, we
expect to benefit from the completion of these DUCs.
-
We continue to work collaboratively with our customers to help them
address the downturn in commodity prices and their need to reduce
operating expenses until prices recover. We also continue to carefully
evaluate market pricing on a facility-by-facility basis. In response
to these conditions we temporarily shut in one additional facility in
Q2, and another in Q3 and have deployed additional automation
technology at each of our remaining facilities. These steps along with
other steps taken to right-size our costs related to the Water &
Environmental Services business should lead to approximately $0.5
million of additional savings on an annualized basis above the $1.0
million in previously announced savings in this segment.
-
Our Integrity Services business Q2 2016 results continued to be soft
through mid-June with project start date delays, and toward the end of
June we saw a material uptick in activity and utilization in this
segment. We have also lowered our bid margins to support our customers
and meet the competition. Our backlog remains solid going into Q3 and
we continue to bid on a substantial amount of work.
-
Our general partner also continues to support substantial costs
associated with the new ERP implementation that should benefit CELP
with additional cost efficiencies as the project is completed by year
end. We have completed the implementation of the new financial system,
payroll system, and are in the final stages of completing the HRIS
time and attendance capture capabilities.
-
We continue to evaluate a number of acquisition opportunities
including some very large transformational opportunities that would
need to initially occur at CEH with the expectation that they would be
offered to CELP in the future as a drop-down opportunity.
CELP will file its quarterly report on Form 10-Q for the three months
ended June 30, 2016 with the Securities and Exchange Commission later
today. CELP will also post a copy of the Form 10-Q on its website at www.cypressenergy.com.
CELP will host an earnings call on Friday, August 12, 2016, at 11:00am
EDT (10:00am CDT) to discuss its second quarter 2016 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): (862) 255-5346. An archived audio replay
of the call will be available on the investor section of our website at www.cypressenergy.com
beginning at 10:00am EDT (9:00am CDT) on August 16, 2016.
Non-GAAP Measures:
CELP defines Adjusted EBITDA as net income (loss), plus interest
expense, depreciation and amortization expenses, income tax expenses,
impairments, offering costs, non-cash allocated expenses and equity
based compensation. CELP 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, income tax expense attributable to limited partners and
equity based compensation attributable to limited partners. CELP defines
Distributable Cash Flow as Adjusted EBITDA attributable to limited
partners excluding cash interest paid, cash income taxes paid and
maintenance capital expenditures. 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; and 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. CELP 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. CELP 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 a similarly titled measure of other companies, thereby
diminishing their utility. Reconciliations of (i) Adjusted EBITDA to net
income, (ii) Adjusted EBITDA attributable to limited partners and
Distributable Cash Flow to net income attributable to limited partners
and (iii) Adjusted EBITDA to net cash provided by operating activities
are shown 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
CELP believes its expectations as reflected in the forward-looking
statements are reasonable, CELP 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 CELP’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.” CELP 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 growth-oriented master limited
partnership that provides midstream services including pipeline
inspection, integrity and hydrostatic testing services to energy, E&P,
public utility companies and midstream companies and their vendors
throughout the U.S. and Canada. Cypress also provides saltwater disposal
and other water and environmental services to U.S. energy E&P companies
and their vendors in North Dakota in the Williston Basin, and West Texas
in the Permian Basin. In all three 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
reduce their operating costs. Cypress is headquartered in Tulsa,
Oklahoma.
|
|
CYPRESS ENERGY PARTNERS, L.P.
|
Unaudited Condensed Consolidated Balance Sheets
|
As of June 30, 2016 and December 31, 2015
|
(in thousands, except unit data)
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
(as adjusted)
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
23,616
|
|
|
|
$
|
24,150
|
|
Trade accounts receivable, net
|
|
|
|
46,519
|
|
|
|
|
48,265
|
|
Prepaid expenses and other
|
|
|
|
1,416
|
|
|
|
|
2,329
|
|
Total current assets
|
|
|
|
71,551
|
|
|
|
|
74,744
|
|
Property and equipment:
|
|
|
|
|
|
|
Property and equipment, at cost
|
|
|
|
21,954
|
|
|
|
|
23,706
|
|
Less: Accumulated depreciation
|
|
|
|
6,459
|
|
|
|
|
5,369
|
|
Total property and equipment, net
|
|
|
|
15,495
|
|
|
|
|
18,337
|
|
Intangible assets, net
|
|
|
|
31,124
|
|
|
|
|
32,486
|
|
Goodwill
|
|
|
|
56,951
|
|
|
|
|
65,273
|
|
Other assets
|
|
|
|
8
|
|
|
|
|
42
|
|
Total assets
|
|
|
$
|
175,129
|
|
|
|
$
|
190,882
|
|
|
|
|
|
|
|
|
LIABILITIES AND OWNERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
1,797
|
|
|
|
$
|
2,205
|
|
Accounts payable - affiliates
|
|
|
|
843
|
|
|
|
|
913
|
|
Accrued payroll and other
|
|
|
|
13,867
|
|
|
|
|
7,095
|
|
Income taxes payable
|
|
|
|
32
|
|
|
|
|
350
|
|
Total current liabilities
|
|
|
|
16,539
|
|
|
|
|
10,563
|
|
Long-term debt
|
|
|
|
135,411
|
|
|
|
|
139,129
|
|
Deferred tax liabilities
|
|
|
|
345
|
|
|
|
|
371
|
|
Asset retirement obligations
|
|
|
|
117
|
|
|
|
|
117
|
|
Total liabilities
|
|
|
|
152,412
|
|
|
|
|
150,180
|
|
|
|
|
|
|
|
|
Owners' equity:
|
|
|
|
|
|
|
Partners’ capital:
|
|
|
|
|
|
|
Common units (5,939,108 and 5,920,467 units outstanding at June 30,
2016 and December 31, 2015, respectively)
|
|
|
|
(6,210
|
)
|
|
|
|
253
|
|
Subordinated units (5,913,000 units outstanding at June 30, 2016 and
December 31, 2015)
|
|
|
|
52,381
|
|
|
|
|
59,143
|
|
General partner
|
|
|
|
(25,876
|
)
|
|
|
|
(25,876
|
)
|
Accumulated other comprehensive loss
|
|
|
|
(2,205
|
)
|
|
|
|
(2,791
|
)
|
Total partners' capital
|
|
|
|
18,090
|
|
|
|
|
30,729
|
|
Non-controlling interests
|
|
|
|
4,627
|
|
|
|
|
9,973
|
|
Total owners' equity
|
|
|
|
22,717
|
|
|
|
|
40,702
|
|
Total liabilities and owners' equity
|
|
|
$
|
175,129
|
|
|
|
$
|
190,882
|
|
|
|
CYPRESS ENERGY PARTNERS, L.P.
|
Unaudited Condensed Consolidated Statements of Operations
|
For the Three and Six Months Ended June 30, 2016 and 2015
|
(in thousands, except unit and per unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
72,311
|
|
|
|
$
|
90,953
|
|
|
|
$
|
145,785
|
|
|
|
$
|
185,019
|
|
Costs of services
|
|
|
|
64,946
|
|
|
|
|
80,190
|
|
|
|
|
130,660
|
|
|
|
|
163,707
|
|
Gross margin
|
|
|
|
7,365
|
|
|
|
|
10,763
|
|
|
|
|
15,125
|
|
|
|
|
21,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
|
5,560
|
|
|
|
|
6,067
|
|
|
|
|
11,749
|
|
|
|
|
11,329
|
|
Depreciation, amortization and accretion
|
|
|
|
1,246
|
|
|
|
|
1,374
|
|
|
|
|
2,471
|
|
|
|
|
2,632
|
|
Impairments
|
|
|
|
10,530
|
|
|
|
|
-
|
|
|
|
|
10,530
|
|
|
|
|
-
|
|
Operating income (loss)
|
|
|
|
(9,971
|
)
|
|
|
|
3,322
|
|
|
|
|
(9,625
|
)
|
|
|
|
7,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
(1,619
|
)
|
|
|
|
(1,440
|
)
|
|
|
|
(3,237
|
)
|
|
|
|
(2,447
|
)
|
Other, net
|
|
|
|
24
|
|
|
|
|
55
|
|
|
|
|
47
|
|
|
|
|
63
|
|
Net income (loss) before income tax expense
|
|
|
|
(11,566
|
)
|
|
|
|
1,937
|
|
|
|
|
(12,815
|
)
|
|
|
|
4,967
|
|
Income tax expense
|
|
|
|
50
|
|
|
|
|
78
|
|
|
|
|
162
|
|
|
|
|
282
|
|
Net income (loss)
|
|
|
|
(11,616
|
)
|
|
|
|
1,859
|
|
|
|
|
(12,977
|
)
|
|
|
|
4,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
|
|
(4,612
|
)
|
|
|
|
(77
|
)
|
|
|
|
(4,979
|
)
|
|
|
|
90
|
|
Net income (loss) attributable to partners / controlling interests
|
|
|
|
(7,004
|
)
|
|
|
|
1,936
|
|
|
|
|
(7,998
|
)
|
|
|
|
4,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) attributable to general partner
|
|
|
|
(2,967
|
)
|
|
|
|
(183
|
)
|
|
|
|
(3,935
|
)
|
|
|
|
(183
|
)
|
Net income (loss) attributable to limited partners
|
|
|
$
|
(4,037
|
)
|
|
|
$
|
2,119
|
|
|
|
$
|
(4,063
|
)
|
|
|
$
|
4,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to limited partners allocated to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common unitholders
|
|
|
$
|
(2,021
|
)
|
|
|
$
|
1,060
|
|
|
|
$
|
(2,034
|
)
|
|
|
$
|
2,390
|
|
Subordinated unitholders
|
|
|
|
(2,016
|
)
|
|
|
|
1,059
|
|
|
|
|
(2,029
|
)
|
|
|
|
2,388
|
|
|
|
|
$
|
(4,037
|
)
|
|
|
$
|
2,119
|
|
|
|
$
|
(4,063
|
)
|
|
|
$
|
4,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common limited partner unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.34
|
)
|
|
|
$
|
0.18
|
|
|
|
$
|
(0.34
|
)
|
|
|
$
|
0.40
|
|
Diluted
|
|
|
$
|
(0.34
|
)
|
|
|
$
|
0.18
|
|
|
|
$
|
(0.34
|
)
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per subordinated limited partner unit - basic and diluted
|
|
|
$
|
(0.34
|
)
|
|
|
$
|
0.18
|
|
|
|
$
|
(0.34
|
)
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common units outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
5,929,735
|
|
|
|
|
5,918,258
|
|
|
|
|
5,926,451
|
|
|
|
|
5,916,717
|
|
Diluted
|
|
|
|
5,929,735
|
|
|
|
|
5,987,550
|
|
|
|
|
5,926,451
|
|
|
|
|
5,980,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average subordinated units outstanding - basic and diluted
|
|
|
|
5,913,000
|
|
|
|
|
5,913,000
|
|
|
|
|
5,913,000
|
|
|
|
|
5,913,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(11,616
|
)
|
|
|
$
|
1,859
|
|
|
$
|
(12,977
|
)
|
|
|
$
|
4,685
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
1,619
|
|
|
|
|
1,440
|
|
|
|
3,237
|
|
|
|
|
2,447
|
Depreciation, amortization and accretion
|
|
|
|
1,474
|
|
|
|
|
1,514
|
|
|
|
2,907
|
|
|
|
|
2,829
|
Impairments
|
|
|
|
10,530
|
|
|
|
|
-
|
|
|
|
10,530
|
|
|
|
|
-
|
Income tax expense
|
|
|
|
50
|
|
|
|
|
78
|
|
|
|
162
|
|
|
|
|
282
|
Non-cash allocated expenses
|
|
|
|
967
|
|
|
|
|
183
|
|
|
|
1,935
|
|
|
|
|
183
|
Equity based compensation
|
|
|
|
190
|
|
|
|
|
321
|
|
|
|
507
|
|
|
|
|
532
|
Adjusted EBITDA
|
|
|
$
|
3,214
|
|
|
|
$
|
5,395
|
|
|
$
|
6,301
|
|
|
|
$
|
10,958
|
|
|
Reconciliation of Net Income (Loss) Attributable to Limited
Partners to Adjusted EBITDA and Distributable Cash Flow Attributable
to Limited Partners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to limited partners
|
|
|
$
|
(4,037
|
)
|
|
|
$
|
2,119
|
|
|
$
|
(4,063
|
)
|
|
|
$
|
4,778
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense attributable to limited partners
|
|
|
|
1,557
|
|
|
|
|
1,402
|
|
|
|
3,113
|
|
|
|
|
2,204
|
Depreciation, amortization and accretion attributable to limited
partners
|
|
|
|
1,321
|
|
|
|
|
1,419
|
|
|
|
2,615
|
|
|
|
|
2,612
|
Impairments attributable to limited partners
|
|
|
|
6,409
|
|
|
|
|
-
|
|
|
|
6,409
|
|
|
|
|
-
|
Income tax expense attributable to limited partners
|
|
|
|
51
|
|
|
|
|
78
|
|
|
|
152
|
|
|
|
|
245
|
Equity based compensation attributable to limited partners
|
|
|
|
190
|
|
|
|
|
321
|
|
|
|
507
|
|
|
|
|
532
|
Adjusted EBITDA attributable to limited partners
|
|
|
$
|
5,491
|
|
|
|
$
|
5,339
|
|
|
$
|
8,733
|
|
|
|
$
|
10,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash interest paid, cash taxes paid and maintenance capital
expenditures attributable to limited partners
|
|
|
|
1,990
|
|
|
|
|
1,796
|
|
|
|
3,387
|
|
|
|
|
2,458
|
Distributable cash flow attributable to limited partners
|
|
|
$
|
3,501
|
|
|
|
$
|
3,543
|
|
|
$
|
5,346
|
|
|
|
$
|
7,913
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by Operating Activities to
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
2015
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
Cash flows provided by operating activities
|
|
|
$
|
11,750
|
|
|
$
|
20,696
|
|
Changes in trade accounts receivable, net
|
|
|
|
(1,746
|
)
|
|
|
(4,150
|
)
|
Changes in prepaid expenses and other
|
|
|
|
(913
|
)
|
|
|
(1,122
|
)
|
Changes in accounts payable and accrued liabilities
|
|
|
|
(6,206
|
)
|
|
|
(7,224
|
)
|
Change in income taxes payable
|
|
|
|
318
|
|
|
|
279
|
|
Equity earnings in investee company
|
|
|
|
30
|
|
|
|
48
|
|
Distributions from investee company
|
|
|
|
(63
|
)
|
|
|
-
|
|
Interest expense (excluding non-cash interest)
|
|
|
|
2,955
|
|
|
|
2,176
|
|
Income tax expense (excluding deferred tax benefit)
|
|
|
|
174
|
|
|
|
254
|
|
Other
|
|
|
|
2
|
|
|
|
1
|
|
Adjusted EBITDA
|
|
|
$
|
6,301
|
|
|
$
|
10,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total barrels of saltwater disposed (in thousands)
|
|
|
|
3,283
|
|
|
|
|
5,168
|
|
|
|
|
6,980
|
|
|
|
|
9,787
|
|
Average revenue per barrel
|
|
|
$
|
0.66
|
|
|
|
$
|
0.77
|
|
|
|
$
|
0.67
|
|
|
|
$
|
0.84
|
|
Water and environmental services gross margins
|
|
|
|
44.2
|
%
|
|
|
|
56.3
|
%
|
|
|
|
49.8
|
%
|
|
|
|
58.2
|
%
|
Average number of inspectors
|
|
|
|
1,134
|
|
|
|
|
1,367
|
|
|
|
|
1,132
|
|
|
|
|
1,415
|
|
Average revenue per inspector per week
|
|
|
$
|
4,586
|
|
|
|
$
|
4,699
|
|
|
|
$
|
4,564
|
|
|
|
$
|
4,737
|
|
Pipeline inspection services gross margins
|
|
|
|
9.2
|
%
|
|
|
|
9.4
|
%
|
|
|
|
9.0
|
%
|
|
|
|
9.1
|
%
|
Average number of field personnel
|
|
|
|
21
|
|
|
|
|
36
|
|
|
|
|
24
|
|
|
|
|
36
|
|
Average revenue per field personnel per week
|
|
|
$
|
9,326
|
|
|
|
$
|
11,087
|
|
|
|
$
|
10,904
|
|
|
|
$
|
11,087
|
|
Pipeline integrity services gross margins
|
|
|
|
6.6
|
%
|
|
|
|
19.7
|
%
|
|
|
|
10.2
|
%
|
|
|
|
19.7
|
%
|
Maintenance capital expenditures (in thousands)
|
|
|
$
|
51
|
|
|
|
$
|
215
|
|
|
|
$
|
150
|
|
|
|
$
|
362
|
|
Expansion capital expenditures (in thousands)
|
|
|
$
|
91
|
|
|
|
$
|
185
|
|
|
|
$
|
396
|
|
|
|
$
|
891
|
|
Distributions (in thousands)
|
|
|
$
|
4,817
|
|
|
|
$
|
4,809
|
|
|
|
$
|
9,629
|
|
|
|
$
|
9,617
|
|
Common unit coverage ratio
|
|
|
1.45x
|
|
|
1.47x
|
|
|
1.11x
|
|
|
1.64x
|
Coverage ratio
|
|
|
0.73x
|
|
|
0.74x
|
|
|
0.56x
|
|
|
0.82x
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160811006190/en/ Copyright Business Wire 2016
Source: Business Wire
(August 11, 2016 - 6:25 PM EDT)
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