Csi Compressco Lp (CCLP) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 2015

Csi Compressco Lp

CIK: 1604950 Ticker: CCLP




Midland, Texas (February 25, 2015) - CSI Compressco LP (CSI Compressco or the Partnership) (NASDAQ: CCLP) today announced fourth quarter and total year 2015 consolidated results. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) for the fourth quarter of 2015 were $29 million, with a net loss of $151 million inclusive of $151 million of non-cash charges for goodwill impairment and asset impairment. This compares to Adjusted EBITDA and net income of $35 million and $4 million, respectively, during the fourth quarter of 2014. Distributable cash flow for the quarter ended December 31, 2015 was $19.4 million (Adjusted EBITDA and distributable cash flow are non-GAAP financial measures that are defined and reconciled to the nearest GAAP financial measures on Schedules B and C in this press release).

Highlights of the fourth quarter and total year 2015 results include:
Fourth quarter Adjusted EBITDA of $29 million
Total year cash provided by operating activities of $102 million
Fourth quarter cash distribution of $0.3775 per unit
Fourth quarter distribution coverage ratio of 1.52x
Continued reduction in operating expenses
Quarter Ended
2015 vs. 2014
December 31, 2015
December 31, 2014
(In Thousands, Except Ratios, and Percentages)
Adjusted EBITDA(1)


Distributable cash flow(1)


Cash distribution per unit annualized


Distribution coverage ratio(1)


Fleet capital expenditures


(1) Non-GAAP financial measures reconciled to the nearest GAAP number on Schedules B and C.

Consolidated revenues for the quarter ended December 31, 2015 were $99.4 million compared to $124.8 million in the fourth quarter of 2014. Loss before tax for the quarter ended December 31, 2015 was $(152.6) million compared to income before tax of $3.4 million for the fourth quarter of 2014. Results of operations for the fourth quarter of 2015 compared to the fourth quarter of 2014 include the following non-cash charges: $139.4 million of goodwill impairment charges, $6.3 million of impairment charges for tangible assets, and $5.6 million of impairment charges for intangible assets. During the quarter we identified 45,123 horsepower of older equipment that we retired from our fleet as we optimize our compression services assets.

As of December 31, 2015 compression services fleet horsepower totaled 1,127,540 horsepower net of the 45,123 horsepower that was retired. As of that date, the fleet utilization rate was 82.0%. We define the fleet utilization rate as the aggregate compressor package horsepower in service divided by the aggregate compressor package fleet horsepower as of a given date.

Unaudited results of operations for the three and twelve month periods ended December 31, 2015 compared to the prior year periods are presented in the accompanying financial tables.

Timothy A. Knox, President of CSI Compressco, commented, “A great deal was accomplished in 2015 with the integration of sales, service, facilities, engineering, and manufacturing efforts between legacy Compressco and former Compressor Systems, Inc. (CSI), allowing the Partnership to function as the single business that it is. At year-end 2015 we were successful in transitioning over 75% of former CSI domestic compression contracts to compression services contracts. We are excited as we launch the implementation of the Oracle JD Edwards EnterpriseOne integrated applications suite at the legacy CSI business. We anticipate that we will complete this ERP initiative over the next 12-18 months and gain increased synergistic efficiencies in field operations and supply chain efforts, as well as a reduction of administrative costs. This will also put in place a proven mechanism by which we can operate more effectively, with automated processes and controls for internal and external financial reporting.”

Mr. Knox further remarked, “As is occurring largely throughout the oil field services industry, our new equipment manufacturing backlog dropped off significantly during 2015, entering 2016 with a $34 million backlog compared to the $120 million backlog entering 2015. As the backlog has declined we have proactively reduced our manufacturing capacity, including lowering manufacturing headcount by 33% at year-end 2015 compared to year-end 2014. In this continued downturn cost controls have been implemented well beyond manufacturing, with total headcount reductions in 2015 of 15%. Cost initiatives are in place throughout the organization such that total expenditures in 2016 are targeted to be more than $35 million below the combined run-rate at the time of the CSI acquisition.

“In January of this year we announced a 25% cut in our quarterly distribution, paying $0.3775 per common unit on February 15, 2016 which provides a 1.52x distribution coverage ratio. By reducing our quarterly distribution, we retained roughly $4 million in cash for the quarter, which combined with our cost cutting initiatives should allow us to reduce debt in 2016 and prepare us for growth when the commodity market and oil field services industry does finally experience a recovery. With oil and gas now trading lower compared to December 31, 2015, at roughly $30 and $2, respectively, and the US rig count falling off 25% since that time, we believe our cut is a the prudent decision given the extended downturn that continues to deepen.

“We anticipate aggregate 2016 capital expenditures between $20 million and $30 million, and depreciation and amortization expense of approximately $82 million. Our 2016 capital expenditure plan includes estimated maintenance capital expenditures of approximately $12 million. Total year capital expenditures for 2015 were approximately $105 million. Given the current product and service pricing environment and supply/demand imbalance, we are focused in 2016 on maximizing the utilization of our existing compression services fleet and applying operating cash flows to reduce debt.”

Conference Call

CSI Compressco will host a conference call to discuss fourth quarter and full year 2015 results today, February 25, 2016, at 10:30 am Eastern Time. The phone number for the call is 866/374-8397. The conference will also be available by live audio webcast and may be accessed through the CSI Compressco website at

Fourth Quarter 2015 Distribution

On January 22, 2016, CSI Compressco announced that the board of directors of its general partner declared a cash distribution attributable to the fourth quarter of 2015 of $0.3775 per outstanding unit, which was paid on February 15, 2016 to unitholders of record as of the close of business on February 1, 2016. The distribution coverage ratio (which is a Non-GAAP Financial Measure defined and reconciled to the closest GAAP financial measure below) for the fourth quarter of 2015 was 1.52x.

CSI Compressco Overview

CSI Compressco LP is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing, and storage. CSI Compressco’s compression and related services business includes a fleet of approximately 6,000 compressor packages providing in excess of 1.1 million in aggregate horsepower, utilizing a full spectrum of low-, medium-, and high-horsepower engines. CSI Compressco also provides well monitoring and automated sand separation services in conjunction with compression services in Mexico. CSI Compressco’s equipment and parts sales business includes the fabrication and sale of standard compressor packages, custom-designed compressor packages, and oilfield fluid pump systems designed and fabricated primarily at our facility in Midland, Texas, as well as the sale of compressor package parts and components manufactured by third-party suppliers. CSI Compressco’s aftermarket services business provides compressor package reconfiguration and maintenance services. CSI Compressco’s customers comprise a broad base of natural gas and oil exploration and production, mid-stream, transmission, and storage companies operating throughout many of the onshore producing regions of the United States as well as in a number of foreign countries, including Mexico, Canada, and Argentina. CSI Compressco is managed by CSI Compressco GP Inc., which is an indirect, wholly owned subsidiary of TETRA Technologies, Inc. (NYSE: TTI).

Forward Looking Statements

This press release contains “forward-looking statements” and information based on our beliefs and those of our general partner, CSI Compressco GP Inc. Forward-looking statements in this press release are identifiable by the use of the following words and other similar words: “anticipates”, “assumes”, “believes”, “budgets”, “could”, “estimates”, “expects”, “forecasts”, “goal”, “intends”, “may”, “might”, “plans”, “predicts”, “projects”, “schedules”, “seeks”, “should, “targets”, “will” and “would”. These forward-looking statements include statements concerning expected results of operations for 2016, anticipated benefits and growth of CSI Compressco LP following the acquisition of Compressor Systems, Inc. (CSI), including increases in cash distributions per unit, financial guidance, estimated distributable cash, earnings, and earnings per unit, and statements regarding CSI Compressco’s beliefs, expectations, plans, goals, future events and performance, and other statements that are not purely historical. Such forward-looking statements reflect our current views with respect to future events and financial performance and are based on assumptions that we believe to be reasonable but such forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to: economic and operating conditions that are outside of our control, including the supply, demand, and prices of crude oil and natural gas; the levels of competition we encounter; the activity levels of our customers; the availability of adequate sources of capital to us; our ability to comply with contractual obligations, including those under our financing arrangements; our operational performance; risks related to acquisitions and our growth strategy; the availability of raw materials and labor at reasonable prices; risks related to our foreign operations; the effect and results of litigation, regulatory matters, settlements, audits, assessments, and contingencies; and other risks and uncertainties contained in our Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission (SEC), which are available free of charge on the SEC website at The risks and uncertainties referred to above are generally beyond our ability to control and we cannot predict all the risks and uncertainties that could cause our actual results to differ from those indicated by the forward-looking statements. If any of these risks or uncertainties materialize, or if any of the underlying assumptions prove incorrect, actual results may vary from those indicated by the forward-looking statements, and such variances may be material. All subsequent written and oral forward-looking statements made by or attributable to us or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements we may make, except as may be required by law.


The following information was filed by Csi Compressco Lp (CCLP) on Thursday, February 25, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Comprehensive Income (parenthetical)
Consolidated Statements Of Operations
Consolidated Statements Of Partners' Capital
Consolidated Statements Of Partners' Capital (parenthetical)
Acquisition Acquisition
Acquisition Acquisition (details 2)
Acquisition Acquisition (details)
Acquisition Acquisition (tables)
Commitments And Contingencies
Earnings Per Common And Subordinated Unit
Earnings Per Common And Subordinated Unit (details)
Earnings Per Common And Subordinated Unit (tables)
Equity-based Compensation
Equity-based Compensation (details)
Equity-based Compensation (tables)
Formation Of The Partnership
Geographic Information
Geographic Information (details)
Geographic Information (tables)
Hedge Contracts Hedge Contracts
Hedge Contracts Hedge Contracts (details)
Hedge Contracts Hedge Contracts (tables)
Income Taxes
Income Taxes (details)
Income Taxes (tables)
Leases (details)
Leases (tables)
Leases Leases
Long-term Debt And Other Borrowings
Long-term Debt And Other Borrowings (details)
Long-term Debt And Other Borrowings (tables)
Quarterly Financial Information (details)
Quarterly Financial Information (tables)
Quarterly Financial Information (unaudited)
Related Party Transactions
Related Party Transactions (details)
Segments Segments
Subsequent Events
Subsequent Events (details)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (details 1)
Summary Of Significant Accounting Policies (details 2)
Summary Of Significant Accounting Policies (policies)
Summary Of Significant Accounting Policies (tables)
Supplemental Guarantor Financial Information Supplemental Guarantor Financial Information
Supplemental Guarantor Financial Information Supplemental Guarantor Financial Information (details 1)
Supplemental Guarantor Financial Information Supplemental Guarantor Financial Information (details 2)
Supplemental Guarantor Financial Information Supplemental Guarantor Financial Information (details 3)
Supplemental Guarantor Financial Information Supplemental Guarantor Financial Information (tables)
Ticker: CCLP
CIK: 1449488
Form Type: 10-K Annual Report
Accession Number: 0001449488-16-000090
Submitted to the SEC: Mon Mar 07 2016 5:15:56 PM EST
Accepted by the SEC: Mon Mar 07 2016
Period: Thursday, December 31, 2015
Industry: Oil And Gas Field Services

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