Csi Compressco Lp (CCLP) SEC Filing 10-Q Quarterly report for the period ending Tuesday, June 30, 2020

Exhibit 99.1

CSI COMPRESSCO LP ANNOUNCES

SECOND QUARTER 2020 RESULTS

THE WOODLANDS, Texas (August 3, 2020) / PRNewswire / - CSI Compressco LP (“CSI Compressco” or the “Partnership”) (NASDAQ: CCLP) today announced second quarter 2020 results.

Net loss for the second quarter ended June 30, 2020 was $24.6 million, inclusive of $15.8 million of non-recurring charges. This compares to a net loss of $13.6 million, in the first quarter of 2020, which included $6.0 million of non-recurring charges. Adjusted EBITDA in the second quarter was $27.0 million compared to $27.8 million in the first quarter of 2020. Revenues for the quarter ended June 30, 2020 were $96 million, an increase of 7% from the first quarter of 2020 driven by $17.8 million of incremental equipment sales.

Brady Murphy, President of CSI Compressco commented, “Our second quarter results reflect the exceptional job by our management team and employees of managing costs, maintaining strong Adjusted EBITDA margins and generating positive cash flow in one of the most challenging quarters our industry has ever experienced due to the COVID-19 pandemic. With steep declines in spending by the oil and gas operators, as evidenced by a 64% decline in the US onshore rig count during the quarter, CSI Compressco was able to maintain Adjusted EBITDA relatively flat at $27 million compared to the first quarter.  Working in a very difficult and dynamic environment, our employees and management team continued to safely and efficiently service our customers as we dealt with challenging working conditions while simultaneously taking the required actions to reduce our cost structure in line with the steep decline in activity.”

“During the quarter we saw the benefit of our quick and decisive cost reduction initiatives.  Compression Services costs were reduced by 20% from the first quarter compared to a 14% sequential decline in Compression Services revenue and a decline in the utilization rate from 86.5% to 82.1%.  As a result of difficult but decisive cost actions, Compression Services gross margins increased by 300 basis points to 54.9% - the highest Compression Services gross margins in CSI Compressco’s history.  Approximately 15% of our total domestic horsepower was on standby during the quarter as customers shut in production given the low commodity prices. As oil prices stabilized and began to improve during the latter part of the quarter, many operators started to bring production back online. A large majority of our remaining units are on standby with our two largest customers - both super majors that have the balance sheet to maintain shut in production in anticipation of higher oil prices. One of them will go operational with most of their standby units starting August 1^st.”

“Aftermarket Services revenue declined 12% while gross margins improved sequentially from 9.6% in the first quarter to 14.6% in the second quarter.  Equipment Sales revenue increased from $6.5 million in the first quarter to $24.3 million in the second quarter on delivery of several large units to Latin America.   We previously announced plans to close our fabrication operations given the decline in demand.  Our final shipments will occur in the third quarter of 2020.  In early July we completed the sale of the Midland, Texas fabrication facility for gross proceeds of $17 million. These funds were received in early July.”

“Cash from operations was $4.8 million in the second quarter, compared to $13.4 million in the first quarter. Distributable cash flow in the second quarter of 2020 was $8.4 million, down 4% from the first quarter of 2020, resulting in a distribution coverage ratio of 17.5x."

This press release includes the following financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“GAAP”): Adjusted EBITDA, Adjusted EBITDA Margin, 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 GAAP measures.