Archrock, Inc. (NYSE: AROC) (“Archrock”) today reported results for
the third quarter of 2021.
Third Quarter 2021 Financial
Results
- Revenue for the third quarter of
2021 was $195.2 million compared to $205.6 million in the third
quarter of 2020.
- Net income for the third quarter of
2021 was $9.3 million compared to $18.3 million in the
third quarter of 2020.
- Adjusted EBITDA (a non-GAAP measure
defined below) for the third quarter of 2021 was $92.4 million
compared to $112.6 million in the third quarter of 2020.
- Previously declared quarterly
dividend of $0.145 per common share for the third quarter of 2021
resulted in dividend coverage of 2.2x.
- Net cash provided by operating
activities for the third quarter of 2021 was $82.1 million.
Including $70.8 million in proceeds from the sale of non-core
assets, free cash flow after dividend (a non-GAAP measure defined
below) was $98.3 million.
- Leverage ratio was 4.3x compared to
4.0x as of September 30, 2020.
- Expect to achieve 2021 Adjusted
EBITDA above the midpoint of our $340 million to $355 million
guidance range.
Archrock’s third quarter 2021 net income of $9.3
million included a pre-tax non-cash long-lived and other asset
impairment of $5.1 million and pre-tax depreciation expense from
the write-off of compression and other assets damaged in Hurricane
Ida of $2.0 million. Archrock’s third quarter 2020 net income of
$18.3 million included a pre-tax non-cash long-lived asset
impairment of $10.7 million and pre-tax restructuring costs related
to severance benefits and property disposals totaling $2.9 million.
In addition, Archrock recorded a net benefit from tax audit
settlements of $10.9 million during the third quarter of 2020.
Adjusted EBITDA for the third quarter of 2021 of
$92.4 million included $15.4 million in net gains related to the
sale of compression and other assets. Adjusted EBITDA for the third
quarter of 2020 of $112.6 million included $9.1 million in net
gains primarily related to the sale of the turbocharger business
included within our aftermarket services segment.
Management Commentary and
Outlook
“The positive trends we saw in the second
quarter accelerated in the third, bolstering our confidence that
the industry is in the front end of a recovery. During the third
quarter, we grew our operating horsepower after adjusting for
non-core asset sales, drove improved contract compression bookings
for the second consecutive quarter and delivered aftermarket
services revenue growth,” said Brad Childers, Archrock’s
President and Chief Executive Officer. “In addition, our contract
operations gross margin percentage remains within guidance
expectations and above prior cycle lows, even in the face of sharp
cost inflation. In response to higher costs, we began taking
necessary action to implement price increases during the fourth
quarter and expect these to be broad-based next year.”
“The recent change in energy supply and demand
fundamentals and resulting breakout in commodity prices highlight
the need for higher industry activity levels and reinforce our
expectation for natural gas demand growth as the global energy mix
transitions to lower carbon fuels over time, all positive news for
our compression business. Although our customers will finalize
their budgets early next year, our initial discussions with
customers indicate that bookings momentum, and therefore our
participation in the upcycle, will continue building into 2022.
“We’ve taken significant measures over the past
several years to reposition our fleet for a more efficient and
sustainable future. Our installed base of large, digitized and
standardized compression horsepower is deployed in stable midstream
applications in critical U.S. basins. We expect the steady and
modest growth in demand for natural gas compression forecasted
ahead will require higher growth capital in 2022 for lower-emitting
and electric motor drive horsepower. As we selectively invest in
high profit, large midstream compression units required to meet the
needs of our customers, we will remain steadfast in our commitment
to both maintaining a solid balance sheet and returning capital to
shareholders,” concluded Childers.
Contract Operations
For the third quarter of 2021, contract
operations segment revenue totaled $158.9 million compared to
$175.2 million in the third quarter of 2020. Gross margin was $97.6
million, compared to $114.8 million in the third quarter of 2020.
This reflected a gross margin percentage of 61%, compared to 66% in
the prior year quarter. Total operating horsepower at the end of
the third quarter of 2021 was 3.2 million, compared to 3.5 million
at the end of the prior year quarter, and reflected the sale of
146,000 active horsepower as part of our ongoing fleet high-grading
initiative. Utilization at the end of the third quarter of 2021 was
82%, compared to 83% at the end of the third quarter of 2020.
Aftermarket Services
For the third quarter of 2021, aftermarket
services segment revenue totaled $36.3 million, up from $30.4
million in the third quarter of 2020, driven by higher parts sales
and service activity. Gross margin of $5.6 million was up from $4.7
million in the third quarter of 2020. Gross margin percentage was
15% in the third quarter of both 2021 and 2020.
Balance Sheet
Long-term debt was $1.5 billion at September 30,
2021, reflecting net debt repayment of $96.5 million during the
third quarter of 2021. Our leverage ratio was 4.3x, compared to
4.0x as of September 30, 2020. Our available liquidity totaled
$517.5 million as of September 30, 2021.
Quarterly Dividend
Our Board of Directors recently declared a
quarterly dividend of $0.145 per share of common stock, or $0.58
per share on an annualized basis, resulting in dividend coverage in
the third quarter of 2021 of 2.2x. The dividend will be paid on
November 16, 2021 to stockholders of record at the close of
business on November 9, 2021.
Summary Metrics(in thousands,
except percentages, per share amounts and ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
2021 |
|
2021 |
|
2020 |
|
Net income |
|
$ |
9,304 |
|
$ |
8,752 |
|
$ |
18,332 |
|
Adjusted EBITDA |
|
$ |
92,351 |
|
$ |
87,045 |
|
$ |
112,634 |
|
|
|
|
|
|
|
|
|
|
|
|
Contract operations
revenue |
|
$ |
158,911 |
|
$ |
163,865 |
|
$ |
175,223 |
|
Contract operations gross
margin |
|
$ |
97,631 |
|
$ |
102,478 |
|
$ |
114,779 |
|
Contract operations gross
margin percentage |
|
|
61 |
% |
|
63 |
% |
|
66 |
% |
|
|
|
|
|
|
|
|
|
|
|
Aftermarket services
revenue |
|
$ |
36,255 |
|
$ |
31,750 |
|
$ |
30,408 |
|
Aftermarket services gross
margin |
|
$ |
5,603 |
|
$ |
4,260 |
|
$ |
4,699 |
|
Aftermarket services gross
margin percentage |
|
|
15 |
% |
|
13 |
% |
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative |
|
$ |
28,839 |
|
$ |
26,077 |
|
$ |
18,681 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash available for
dividend |
|
$ |
50,128 |
|
$ |
42,446 |
|
$ |
77,246 |
|
Cash available for dividend
coverage |
|
|
2.2 |
x |
|
1.9 |
x |
|
3.5 |
x |
|
|
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
120,828 |
|
$ |
31,678 |
|
$ |
100,453 |
|
Free cash flow after
dividend |
|
$ |
98,322 |
|
$ |
9,347 |
|
$ |
78,145 |
|
|
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end) |
|
|
3,913 |
|
|
4,041 |
|
|
4,153 |
|
Total operating horsepower (at
period end) |
|
|
3,196 |
|
|
3,295 |
|
|
3,465 |
|
Horsepower utilization spot
(at period end) |
|
|
82 |
% |
|
82 |
% |
|
83 |
% |
Conference Call Details
Archrock will host a conference call on Tuesday,
November 2, 2021, to discuss third quarter 2021 financial results.
The call will begin at 10:00 a.m. Eastern Time.
To listen to the call via a live webcast, please
visit Archrock’s website at www.archrock.com. The call will also be
available by dialing 1-833-989-2934 in the United States and Canada
or 1-587-505-2692 for international calls. The access code is
1124236.
A replay of the webcast will be available on Archrock’s website
for 90 days following the event.
Adjusted EBITDA, a non-GAAP measure, is defined
as net income (loss) excluding interest expense, income taxes,
depreciation and amortization, long-lived and other asset
impairment, goodwill impairment, restructuring charges, debt
extinguishment loss, non-cash stock-based compensation expense,
indemnification income (expense), net and other items. A
reconciliation of Adjusted EBITDA to net income (loss), the most
directly comparable GAAP measure, and a reconciliation of our full
year 2021 Adjusted EBITDA guidance to net income (loss) appear
below.
Gross margin, a non-GAAP measure, is defined as
revenue less cost of sales (excluding depreciation and
amortization). Gross margin percentage is defined as gross margin
divided by revenue. A reconciliation of gross margin to net income
(loss), the most directly comparable GAAP measure, appears
below.
Cash available for dividend, a non-GAAP measure,
is defined as net income (loss) excluding interest expense,
income taxes, depreciation and amortization, long-lived and other
asset impairment, goodwill impairment, restructuring charges, debt
extinguishment loss, non-cash stock-based compensation expense,
indemnification income (expense), net and other items, less
maintenance capital expenditures, other capital expenditures, cash
taxes and cash interest expense. Reconciliations of cash available
for dividend to net income (loss) and net cash provided by
operating activities, the most directly comparable GAAP measures,
appear below.
Free cash flow, a non-GAAP measure, is defined
as net cash provided by operating activities plus net cash provided
by (used in) investing activities. A reconciliation of free cash
flow to net cash provided by operating activities, the most
directly comparable GAAP measure, appears below.
Free cash flow after dividend, a non-GAAP
measure, is defined as net cash provided by operating activities
plus net cash provided by (used in) investing activities less
dividends paid to stockholders. A reconciliation of free cash flow
after dividend to net cash provided by operating activities, the
most directly comparable GAAP measure, appears below.
About Archrock
Archrock is an energy infrastructure company
with a pure-play focus on midstream natural gas
compression. Archrock is the leading provider of natural gas
compression services to customers in the oil and natural gas
industry throughout the U.S. and a leading supplier of aftermarket
services to customers that own compression equipment in the U.S.
Archrock is headquartered in Houston, Texas. For more information,
please visit www.archrock.com.
Forward-Looking Statements
All statements in this release (and oral
statements made regarding the subjects of this release) other than
historical facts are forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of
uncertainties and factors that could cause actual results to differ
materially from such statements, many of which are outside the
control of Archrock, Inc. Forward-looking information includes, but
is not limited to statements regarding: the effects of the COVID-19
pandemic on our business, operations, customers and financial
conditions; guidance or estimates related to Archrock’s results of
operations or of financial condition; fundamentals of Archrock’s
industry, including the attractiveness of returns and valuation,
stability of cash flows, demand dynamics and overall outlook, and
Archrock’s ability to realize the benefits thereof; Archrock’s
expectations regarding future economic and market conditions and
trends; Archrock’s operational and financial strategies, including
planned growth, coverage and leverage reduction strategies,
Archrock’s ability to successfully effect those strategies and the
expected results therefrom; Archrock’s financial and operational
outlook; demand and growth opportunities for Archrock’s services;
structural and process improvement initiatives, the expected timing
thereof, Archrock’s ability to successfully effect those
initiatives and the expected results therefrom; the operational and
financial synergies provided by Archrock’s size; and statements
regarding Archrock’s dividend policy.
While Archrock believes that the assumptions
concerning future events are reasonable, it cautions that there are
inherent difficulties in predicting certain important factors that
could impact the future performance or results of its business. The
factors that could cause results to differ materially from those
indicated by such forward-looking statements include, but are not
limited to: changes in customer, employee or supplier
relationships; local, regional and national economic and financial
market conditions and the impact they may have on Archrock and its
customers; changes in tax laws; conditions in the oil and gas
industry, including a sustained decrease in the level of supply or
demand for oil or natural gas or a sustained decrease in the price
of oil or natural gas; changes in economic conditions in key
operating markets; impacts of world events, including the COVID-19
pandemic; the financial condition of Archrock’s customers; the
failure of any customer to perform its contractual obligations;
changes in safety, health, environmental and other regulations; and
the effectiveness of Archrock’s control environment, including the
identification of control deficiencies.
These forward-looking statements are also
affected by the risk factors, forward-looking statements and
challenges and uncertainties described in Archrock’s Annual Report
on Form 10-K for the year ended December 31, 2020, Archrock’s
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2021, June 30, 2021 and September 30, 2021, and those set forth
from time to time in Archrock’s filings with the Securities and
Exchange Commission, which are available at www.archrock.com.
Except as required by law, Archrock expressly disclaims any
intention or obligation to revise or update any forward-looking
statements whether as a result of new information, future events or
otherwise.
SOURCE: Archrock, Inc.
For information, contact:
Megan RepineVP of Investor
Relations281-836-8360investor.relations@archrock.com
ARCHROCK, INC.UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Revenue: |
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
158,911 |
|
|
$ |
163,865 |
|
|
$ |
175,223 |
|
Aftermarket services |
|
|
36,255 |
|
|
|
31,750 |
|
|
|
30,408 |
|
Total revenue |
|
|
195,166 |
|
|
|
195,615 |
|
|
|
205,631 |
|
Cost of sales (excluding
depreciation and amortization): |
|
|
|
|
|
|
|
|
|
Contract operations |
|
|
61,280 |
|
|
|
61,387 |
|
|
|
60,444 |
|
Aftermarket services |
|
|
30,652 |
|
|
|
27,490 |
|
|
|
25,709 |
|
Total cost of sales (excluding depreciation and amortization) |
|
|
91,932 |
|
|
|
88,877 |
|
|
|
86,153 |
|
Selling, general and
administrative |
|
|
28,839 |
|
|
|
26,077 |
|
|
|
18,681 |
|
Depreciation and
amortization |
|
|
45,280 |
|
|
|
44,193 |
|
|
|
47,279 |
|
Long-lived and other asset
impairment |
|
|
5,121 |
|
|
|
2,960 |
|
|
|
10,727 |
|
Restructuring charges |
|
|
313 |
|
|
|
743 |
|
|
|
2,900 |
|
Interest expense |
|
|
25,508 |
|
|
|
25,958 |
|
|
|
25,221 |
|
Gain on sale of assets,
net |
|
|
(15,393 |
) |
|
|
(3,124 |
) |
|
|
(9,146 |
) |
Other (income) expense,
net |
|
|
337 |
|
|
|
(82 |
) |
|
|
(324 |
) |
Income before income
taxes |
|
|
13,229 |
|
|
|
10,013 |
|
|
|
24,140 |
|
Provision for income
taxes |
|
|
3,925 |
|
|
|
1,261 |
|
|
|
5,808 |
|
Net income |
|
$ |
9,304 |
|
|
$ |
8,752 |
|
|
$ |
18,332 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income
per common share (1) |
|
$ |
0.06 |
|
|
$ |
0.06 |
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
152,158 |
|
|
|
152,033 |
|
|
|
150,974 |
|
Diluted |
|
|
152,297 |
|
|
|
152,203 |
|
|
|
151,038 |
|
(1) Basic and diluted net
income per common share is computed using the two-class method to
determine the net income per share for each class of common stock
and participating security (restricted stock and stock-settled
restricted stock units that have non-forfeitable rights to receive
dividends or dividend equivalents) according to dividends declared
and participation rights in undistributed earnings. Accordingly, we
have excluded net income attributable to participating securities
from our calculation of basic and diluted net income per common
share.
ARCHROCK, INC.UNAUDITED
SUPPLEMENTAL INFORMATION(in thousands, except percentages,
per share amounts and ratios)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Revenue: |
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
158,911 |
|
|
$ |
163,865 |
|
|
$ |
175,223 |
|
Aftermarket services |
|
|
36,255 |
|
|
|
31,750 |
|
|
|
30,408 |
|
Total revenue |
|
$ |
195,166 |
|
|
$ |
195,615 |
|
|
$ |
205,631 |
|
|
|
|
|
|
|
|
|
|
|
Gross margin (1): |
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
97,631 |
|
|
$ |
102,478 |
|
|
$ |
114,779 |
|
Aftermarket services |
|
|
5,603 |
|
|
|
4,260 |
|
|
|
4,699 |
|
Total gross margin |
|
$ |
103,234 |
|
|
$ |
106,738 |
|
|
$ |
119,478 |
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage: |
|
|
|
|
|
|
|
|
|
Contract operations |
|
|
61 |
% |
|
|
63 |
% |
|
|
66 |
% |
Aftermarket services |
|
|
15 |
% |
|
|
13 |
% |
|
|
15 |
% |
Total gross margin percentage |
|
|
53 |
% |
|
|
55 |
% |
|
|
58 |
% |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
$ |
28,839 |
|
|
$ |
26,077 |
|
|
$ |
18,681 |
|
% of revenue |
|
|
15 |
% |
|
|
13 |
% |
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1) |
|
$ |
92,351 |
|
|
$ |
87,045 |
|
|
$ |
112,634 |
|
% of revenue |
|
|
47 |
% |
|
|
44 |
% |
|
|
55 |
% |
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
32,132 |
|
|
$ |
27,210 |
|
|
$ |
17,054 |
|
Proceeds from sale of
property, plant and equipment and other assets |
|
|
(70,785 |
) |
|
|
(9,691 |
) |
|
|
(17,707 |
) |
Net capital expenditures |
|
$ |
(38,653 |
) |
|
$ |
17,519 |
|
|
$ |
(653 |
) |
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end) (2) |
|
|
3,913 |
|
|
|
4,041 |
|
|
|
4,153 |
|
Total operating horsepower (at
period end) (3) |
|
|
3,196 |
|
|
|
3,295 |
|
|
|
3,465 |
|
Average operating
horsepower |
|
|
3,225 |
|
|
|
3,316 |
|
|
|
3,536 |
|
Horsepower utilization: |
|
|
|
|
|
|
|
|
|
Spot (at period end) |
|
|
82 |
% |
|
|
82 |
% |
|
|
83 |
% |
Average |
|
|
82 |
% |
|
|
82 |
% |
|
|
85 |
% |
|
|
|
|
|
|
|
|
|
|
Dividend declared for the
period per share |
|
$ |
0.145 |
|
|
$ |
0.145 |
|
|
$ |
0.145 |
|
Dividend declared for the
period to all shareholders |
|
$ |
22,393 |
|
|
$ |
22,404 |
|
|
$ |
22,216 |
|
Cash available for dividend
coverage (4) |
|
|
2.2 |
x |
|
|
1.9 |
x |
|
|
3.5 |
x |
|
|
|
|
|
|
|
|
|
|
Free cash flow (5) |
|
$ |
120,828 |
|
|
$ |
31,678 |
|
|
$ |
100,453 |
|
Free cash flow after dividend
(5) |
|
$ |
98,322 |
|
|
$ |
9,347 |
|
|
$ |
78,145 |
|
(1) Management believes gross
margin and Adjusted EBITDA provide useful information to investors
because these non-GAAP measures, when viewed with our GAAP results
and accompanying reconciliations, provide a more complete
understanding of our performance than GAAP results alone.
Management uses these non-GAAP measures as supplemental measures to
review current period operating performance, comparability measures
and performance measures for period-to-period
comparisons.(2) Defined as idle and operating
horsepower. New compressor units completed by a third party
manufacturer that have been delivered to us are included in the
fleet.(3) Defined as horsepower that is operating
under contract and horsepower that is idle but under contract and
generating revenue such as standby
revenue.(4) Defined as cash available for dividend
divided by dividends declared for the
period.(5) Management believes free cash flow and
free cash flow after dividend provide useful information to
investors because these non-GAAP measures, when viewed with our
GAAP results and accompanying reconciliations, provide a more
complete understanding of our performance and the amount of cash
that is available for dividends, debt repayment and other general
corporate purposes.
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Balance
Sheet |
|
|
|
|
|
|
|
|
|
Long-term debt (1) |
|
$ |
1,516,135 |
|
$ |
1,612,490 |
|
$ |
1,731,459 |
Total equity |
|
|
904,047 |
|
|
913,821 |
|
|
949,685 |
(1) Carrying values are shown net of
unamortized debt discount, premium and deferred financing
costs.
ARCHROCK, INC.UNAUDITED
SUPPLEMENTAL INFORMATION(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Reconciliation of Net
Income to Adjusted EBITDA and Gross Margin |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
9,304 |
|
|
$ |
8,752 |
|
|
$ |
18,332 |
|
Depreciation and
amortization |
|
|
45,280 |
|
|
|
44,193 |
|
|
|
47,279 |
|
Long-lived and other asset
impairment |
|
|
5,121 |
|
|
|
2,960 |
|
|
|
10,727 |
|
Restructuring charges |
|
|
313 |
|
|
|
743 |
|
|
|
2,900 |
|
Interest expense |
|
|
25,508 |
|
|
|
25,958 |
|
|
|
25,221 |
|
Stock-based compensation
expense |
|
|
2,900 |
|
|
|
3,178 |
|
|
|
2,645 |
|
Indemnification income, net
(1) |
|
|
— |
|
|
|
— |
|
|
|
(278 |
) |
Provision for income
taxes |
|
|
3,925 |
|
|
|
1,261 |
|
|
|
5,808 |
|
Adjusted EBITDA (2) |
|
|
92,351 |
|
|
|
87,045 |
|
|
|
112,634 |
|
Selling, general and
administrative |
|
|
28,839 |
|
|
|
26,077 |
|
|
|
18,681 |
|
Stock-based compensation
expense |
|
|
(2,900 |
) |
|
|
(3,178 |
) |
|
|
(2,645 |
) |
Indemnification income, net
(1) |
|
|
— |
|
|
|
— |
|
|
|
278 |
|
Gain on sale of assets,
net |
|
|
(15,393 |
) |
|
|
(3,124 |
) |
|
|
(9,146 |
) |
Other (income) expense,
net |
|
|
337 |
|
|
|
(82 |
) |
|
|
(324 |
) |
Gross margin (2) |
|
$ |
103,234 |
|
|
$ |
106,738 |
|
|
$ |
119,478 |
|
(1) Represents the net income
earned or net expense incurred pursuant to indemnification
provisions of our separation and distribution and tax matters
agreements with Exterran
Corporation.(2) Management believes Adjusted
EBITDA and gross margin provide useful information to investors
because these non-GAAP measures, when viewed with our GAAP results
and accompanying reconciliations, provide a more complete
understanding of our performance than GAAP results alone.
Management uses these non-GAAP measures as supplemental measures to
review current period operating performance, comparability measures
and performance measures for period-to-period comparisons.
ARCHROCK, INC.UNAUDITED
SUPPLEMENTAL INFORMATION(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Reconciliation of Net
Income to Adjusted EBITDA and Cash Available for
Dividend |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
9,304 |
|
|
$ |
8,752 |
|
|
$ |
18,332 |
|
Depreciation and
amortization |
|
|
45,280 |
|
|
|
44,193 |
|
|
|
47,279 |
|
Long-lived and other asset
impairment |
|
|
5,121 |
|
|
|
2,960 |
|
|
|
10,727 |
|
Restructuring charges |
|
|
313 |
|
|
|
743 |
|
|
|
2,900 |
|
Interest expense |
|
|
25,508 |
|
|
|
25,958 |
|
|
|
25,221 |
|
Stock-based compensation
expense |
|
|
2,900 |
|
|
|
3,178 |
|
|
|
2,645 |
|
Indemnification income,
net |
|
|
— |
|
|
|
— |
|
|
|
(278 |
) |
Provision for income
taxes |
|
|
3,925 |
|
|
|
1,261 |
|
|
|
5,808 |
|
Adjusted EBITDA (1) |
|
|
92,351 |
|
|
|
87,045 |
|
|
|
112,634 |
|
Less: Maintenance capital
expenditures |
|
|
(14,086 |
) |
|
|
(13,015 |
) |
|
|
(3,817 |
) |
Less: Other capital
expenditures |
|
|
(3,430 |
) |
|
|
(5,814 |
) |
|
|
(7,363 |
) |
Less: Cash tax payment |
|
|
— |
|
|
|
(601 |
) |
|
|
(407 |
) |
Less: Cash interest
expense |
|
|
(24,707 |
) |
|
|
(25,169 |
) |
|
|
(23,801 |
) |
Cash available for dividend
(2) |
|
$ |
50,128 |
|
|
$ |
42,446 |
|
|
$ |
77,246 |
|
(1) Management believes
Adjusted EBITDA provides useful information to investors because
this non-GAAP measure, when viewed with our GAAP results and
accompanying reconciliations, provides a more complete
understanding of our performance than GAAP results
alone. Management uses this non-GAAP measure as a supplemental
measure to review current period operating performance,
comparability measure and performance measure for period-to-period
comparisons.(2) Management uses cash available for
dividend as a supplemental performance measure to compute the
coverage ratio of estimated cash flows to planned dividends.
ARCHROCK, INC.UNAUDITED
SUPPLEMENTAL INFORMATION(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Reconciliation of Cash
Flows From Operating Activities to Cash Available for
Dividend |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
82,108 |
|
|
$ |
49,062 |
|
|
$ |
99,760 |
|
Inventory write-downs |
|
|
(110 |
) |
|
|
(293 |
) |
|
|
(220 |
) |
(Provision for) benefit from
credit losses |
|
|
(366 |
) |
|
|
439 |
|
|
|
47 |
|
Gain on sale of assets,
net |
|
|
15,393 |
|
|
|
3,124 |
|
|
|
9,146 |
|
Current income tax provision
(benefit) |
|
|
142 |
|
|
|
(142 |
) |
|
|
(21 |
) |
Cash tax payment |
|
|
— |
|
|
|
(601 |
) |
|
|
(407 |
) |
Amortization of operating
lease ROU assets |
|
|
(1,031 |
) |
|
|
(941 |
) |
|
|
(928 |
) |
Amortization of contract
costs |
|
|
(4,771 |
) |
|
|
(5,161 |
) |
|
|
(6,630 |
) |
Deferred revenue recognized in
earnings |
|
|
3,033 |
|
|
|
2,720 |
|
|
|
4,421 |
|
Cash restructuring
charges |
|
|
313 |
|
|
|
743 |
|
|
|
1,402 |
|
Indemnification income,
net |
|
|
— |
|
|
|
— |
|
|
|
(278 |
) |
Changes in assets and
liabilities |
|
|
(25,953 |
) |
|
|
13,419 |
|
|
|
(16,797 |
) |
Maintenance capital
expenditures |
|
|
(14,086 |
) |
|
|
(13,015 |
) |
|
|
(3,817 |
) |
Other capital
expenditures |
|
|
(3,430 |
) |
|
|
(5,814 |
) |
|
|
(7,363 |
) |
Payments for settlement of
interest rate swaps that include financing elements |
|
|
(1,114 |
) |
|
|
(1,094 |
) |
|
|
(1,069 |
) |
Cash available for dividend
(1) |
|
$ |
50,128 |
|
|
$ |
42,446 |
|
|
$ |
77,246 |
|
(1) Management uses cash
available for dividend as a supplemental performance measure to
compute the coverage ratio of estimated cash flows to planned
dividends.
ARCHROCK, INC.UNAUDITED
SUPPLEMENTAL INFORMATION(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Reconciliation of Cash
Flows From Operating Activities to Free Cash Flow and Free Cash
Flow After Dividend |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
82,108 |
|
|
$ |
49,062 |
|
|
$ |
99,760 |
|
Net cash provided by (used in)
investing activities |
|
|
38,720 |
|
|
|
(17,384 |
) |
|
|
693 |
|
Free cash flow (1) |
|
|
120,828 |
|
|
|
31,678 |
|
|
|
100,453 |
|
Dividends paid to
stockholders |
|
|
(22,506 |
) |
|
|
(22,331 |
) |
|
|
(22,308 |
) |
Free cash flow after dividend
(1) |
|
$ |
98,322 |
|
|
$ |
9,347 |
|
|
$ |
78,145 |
|
(1) Management believes free
cash flow and free cash flow after dividend provide useful
information to investors because these non-GAAP measures, when
viewed with our GAAP results and accompanying reconciliations,
provide a more complete understanding of our performance and the
amount of cash that is available for dividends, debt repayment and
other general corporate purposes.
ARCHROCK, INC.UNAUDITED
SUPPLEMENTAL INFORMATION(in thousands)
|
|
|
|
|
|
|
|
|
Annual Guidance Range |
|
|
2021 |
|
|
Low |
|
High |
Reconciliation of Net
Income to Adjusted EBITDA |
|
|
|
|
|
|
Net income (1) |
|
$ |
19,000 |
|
$ |
34,000 |
Depreciation and
amortization |
|
|
178,000 |
|
|
178,000 |
Interest expense |
|
|
108,000 |
|
|
108,000 |
Stock-based compensation
expense |
|
|
11,000 |
|
|
11,000 |
Long-lived and other asset
impairment |
|
|
10,000 |
|
|
10,000 |
Provision for income
taxes |
|
|
13,000 |
|
|
13,000 |
Other expense |
|
|
1,000 |
|
|
1,000 |
Adjusted EBITDA (2) |
|
$ |
340,000 |
|
$ |
355,000 |
(1) 2021 annual guidance for
net income includes $15.2 million of long-lived and other asset
impairments and $2.0 million of restructuring charges as of
September 30, 2021, but does not include the impact of any such
future costs, because due to their nature, they cannot be
accurately forecasted. Such costs do not impact Adjusted EBITDA or
cash available for dividend, however they are reconciling items
between these measures and net income. Long-lived and other asset
impairment for our full years 2020 and 2019 was $79.6 million and
$44.7 million, respectively.(2) Management
believes Adjusted EBITDA provides useful information to investors
because this non-GAAP measure, when viewed with our GAAP results
and accompanying reconciliations, provides a more complete
understanding of our performance than GAAP results alone.
Management uses this non-GAAP measure as a supplemental measure to
review current period operating performance, comparability measure
and performance measure for period-to-period comparisons.
Archrock (NYSE:AROC)
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