CSI Compressco LP ("CSI,") (CCLP) announced first quarter 2023 results.
First Quarter 2023 Results:
- Total revenues were $91.4 million compared to $80.0 million in the first quarter 2022.
- Contract services revenue increased to $69.6 million compared to $62.8 million in the first quarter 2022.
- Net loss was $2.6 million compared to a net loss of $6.6 million in the first quarter 2022.
- Adjusted EBITDA was $30.7 million compared to $26.9 million in the first quarter 2022.
- Trailing Twelve Months Adjusted EBITDA was $119.3 million.
- Compression fleet utilization increased to 87.4% compared to 81.4% in the first quarter 2022.
- Operating horsepower increased to 1,039,104 compared to 973,428 in the first quarter 2022.
- Distributable cash flow was $12.5 million compared to $10.3 million in the first quarter 2022.
- Distribution coverage ratio was 8.8x compared to 7.3x in the first quarter 2022.
- First quarter of 2023 distribution of $0.01 per common unit will be paid on May 15, 2023.
- Net Leverage Ratio was 5.3x compared to 5.9x in the first quarter 2022.
- CSI has no significant credit facility or debt maturities until 2025.
Management Commentary
John Jackson, CEO of CSI Compressco commented, "Our first quarter results reflect the strength of the natural gas compression market with continued improvement in EBITDA and leverage metrics. The forward outlook is encouraging as the visibility and sustainability of these results continues to improve.
Demand for medium and large HP (700 HP +) continues to grow as evidenced by the tight available supply and the sustained demand. This is reflected in the continued improvement in utilization rates as well as inbound requests from our customers for incremental new build large horsepower. Our overall fleet utilization improved to 87.4%; however, our reciprocating fleet improved to 93.3% and our reciprocating fleet represents over 82% of our total horsepower. Regarding the incremental new build demand, we have committed capital for 2023 and 2024 with signed contracts for large HP units for delivery later in 2023 and into the third quarter of 2024.
Our net leverage metric continues to improve, currently at 5.3x, with our full year guidance range of 4.8x - 5.2x remaining unchanged. We remain committed to limiting our capital spending during 2023 such that CSI Compressco will generate free cash flow.
The overall outlook for the natural gas compression sector has continued to improve with longer term contracts, increasing returns, limited, if any, speculative new build compression entering the market, and significant increase in new unit build costs, which improves the overall value of the existing underlying fleets. We continue to view the future with optimism as the visibility of strong results and activity lengthens and strengthens our earnings capability and accelerates the improvement in CSI Compressco's leverage metrics."
Net cash provided by operating activities was $19.9 million in the first quarter compared to net cash provided in operating activities of $11.8 million in the first quarter of 2022. Distributable cash flow in the first quarter was $12.5 million, resulting in a distribution coverage ratio of 8.8x.
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.
