Csi Compressco Lp (CCLP) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2019

Exhibit 99.1

CSI COMPRESSCO LP ANNOUNCES STRONG

FOURTH QUARTER AND FULL YEAR 2019 RESULTS AND

PROVIDES 2020 TOTAL YEAR FINANCIAL GUIDANCE

THE WOODLANDS, Texas, February 26, 2020 / PRNewswire /

CSI Compressco’s consolidated revenues for the quarter ended December 31, 2019 were $124 million compared to $114 million for the third quarter of 2019, an increase of 9% driven by strong aftermarket services, higher equipment sales due to timing of shipments and continued improvements in compression services.  Net loss for the quarter ended December 31, 2019 was $2.0 million compared to a net loss of $3.6 million in the third quarter of 2019 and a net loss of $3.7 million for the fourth quarter of 2018. Net loss per diluted common unit for fourth quarter 2019 was $0.04 as compared to a net loss per diluted common unit of $0.08 in the third quarter of 2019 and a net loss per diluted common unit of $0.10 in the fourth quarter of 2018.

CSI Compressco’s consolidated revenues for the full year 2019 were $477 million, an increase of $38 million over 2018 revenues of $439 million, or 9%.  The full year sequential improvement was spread across all three of our businesses but primarily driven by compression services, which accounted for 73% of the increase.  Net loss for 2019 was $21.0 million compared to a net loss of $37.0 million in 2018.  Net loss per diluted common unit for 2019 was $0.44 as compared to a net loss per diluted common unit of $0.88 in 2018.

Fourth Quarter 2019

Brady Murphy, President of CSI Compressco commented, “Our fourth quarter 2019 results show the continued strengthening of our business with record achievements in many key financial metrics. Adjusted EBITDA of $34.7 million improved $0.7 million sequentially and is the highest in the 6 years since the acquisition of Compressor Systems, Inc. in 2014. Net loss for 2019 showed a significant improvement as compared to 2018.  We achieved a gross margin of 33.6% and a 28.1% Adjusted EBITDA margin, underpinned by 90% overall equipment utilization at year-end, essentially flat from the record at the end of third quarter 2019 of 90.1%. The customer trend of deploying centralized gas lift as a cost effective and efficient means to help drive liquids production continues to be a primary driver for incremental high horsepower additions to our service fleet.  The design and horsepower of our compressor packages used for these applications falls in the sweet spot of CSI Compressco’s high horsepower units and our alignment with key customers in the Permian Basin continues to drive this demand.  In the fourth quarter of 2019, 89% of our total horsepower deployments were directed towards centralized gas lift for liquids or single well artificial lift for the growing inventory of late life horizontal wells. While customer drilling activity and new well capital expenditures are expected to decrease in 2020, we see these applications continuing to grow.

“While compression services gross margins decreased sequentially to 51.6% from 53.2% due to increased labor and parts costs from weather-related outages, this segment contributed over $33.6 million of gross margin in the quarter.  In the fourth quarter of 2019, equipment sales were $34.3 million, up $5.9 million from the third quarter on the timing of deliveries.  Our aftermarket business experienced strong year-end levels of activity as customers ended the year completing large refurbishment projects and stocking inventory levels.  

“During the quarter we added more than 26,200 in new horsepower, focused around centralized gas lift for our key accounts, with the vast majority of the new additions being deployed into existing clusters of equipment in the Permian Basin and in South Texas.  

“Distributable cash flow(1) in the fourth quarter was $15.5 million, up 17% from the fourth quarter of 2018, resulting in a distribution coverage ratio(1) of 32.5x.