Archrock, Inc. (NYSE: AROC) (“Archrock”) today reported results for
the first quarter of 2022.
First Quarter 2022 and Recent
Highlights
- Revenue for the first quarter of
2022 was $197.2 million compared to $195.4 million in the first
quarter of 2021.
- Net income for the first quarter of
2022 was $1.7 million compared to $4.2 million in the first quarter
of 2021.
- Adjusted EBITDA (a non-GAAP measure
defined below) for the first quarter of 2022 was $81.4 million
compared to $97.9 million in the first quarter of 2021.
- Previously-declared quarterly
dividend of $0.145 per common share for the first quarter of 2022
resulted in dividend coverage of 1.8x.
- Net cash provided by operating
activities for the first quarter of 2022 was $76.6 million and free
cash flow after dividend (a non-GAAP measure defined below) was
$17.2 million.
- Contract operations bookings for
the first quarter of 2022 increased 40% compared to the fourth
quarter of 2021.
- Agreed to acquire for cash a 25%
equity stake in Ecotec International Holdings, LLC (“ECOTEC”), a
global leader in methane emissions monitoring and
management.
Management Commentary and
Outlook
“Compression market fundamentals improved
considerably during the first quarter as our customers implemented
their growth plans for 2022. We delivered higher operating
horsepower and contract operations revenue growth, as compared to
the fourth quarter of 2021, and our team did a great job maximizing
our gross margins in an inflationary environment,” said Brad
Childers, Archrock’s President and Chief Executive Officer. “On the
market and bookings front, the recovery and our exceptional
customer service is driving increased engagement with customers,
with strong visibility into compression demand now reaching well
into 2023. In addition, last week, we closed the sale of additional
non-core compression assets for proceeds totaling $56 million. Our
underlying business performance is on pace with our forecast for
the year and with the benefit of this transaction, we are raising
the low end of our annual adjusted EBITDA guidance range and now
expect to generate positive free cash flow after dividends in
2022.
“Positive developments for natural gas are
reinforcing our outlook for 2022 and expectation for a multi-year
cyclical recovery. Importantly, the collision of geopolitical
tensions, recent upstream underinvestment and limited spare
capacity is rapidly shifting the energy transition narrative to one
that elevates the importance of energy security and natural gas.
This dynamic and strong market indicators, including the growing
potential for another wave of LNG projects, lay the foundation for
a sustained secular upturn in U.S. natural gas production, and
therefore, our compression business.
“With a supportive commodity backdrop, proven
operational execution and several transformative catalysts on the
horizon, I’m excited about what lies ahead for Archrock. We are in
the early stages of leveraging an upgraded technology platform in
our field operations, which we expect to be a key differentiator
for us moving forward. We are also taking important steps in our
strategy to develop a suite of solutions that supports our
customers’ sustainability goals, most recently with the acquisition
of a minority equity stake in ECOTEC and the opportunity to bring
their continuous methane emissions detection and management
offerings to our customers. We look forward to updating you on
these initiatives and other possible upside opportunities as the
year progresses,” concluded Childers.
First Quarter 2022 Financial
Results
Archrock’s first quarter 2022 net income of $1.7
million included a pre-tax non-cash long-lived and other asset
impairment of $7.4 million. Archrock’s first quarter 2021 net
income of $4.2 million included the following pre-tax items: a
non-cash long-lived and other asset impairment of $7.1 million, a
write-off of unamortized deferred financing costs of $4.9 million,
a non-income-based tax benefit of $2.5 million and restructuring
costs totaling $0.9 million.
Adjusted EBITDA for the first quarter of 2022
and 2021 included $2.1 million and $11.0 million, respectively, in
net gains related to the sale of compression and other assets.
Contract Operations
For the first quarter of 2022, contract
operations segment revenue totaled $163.7 million, compared to
$166.0 million in the first quarter of 2021. Gross margin (a
non-GAAP measure defined below) was $99.2 million, compared to
$104.7 million in the first quarter of 2021. This reflected a gross
margin percentage of 61%, compared to 63% in the prior year
quarter. Total operating horsepower was 3.3 million at the end of
the first quarter in both 2022 and 2021, and reflected the sale of
119,000 active horsepower as part of our ongoing fleet high-grading
initiative. Utilization at the end of the first quarter of 2022 was
84%, compared to 82% at the end of the first quarter of 2021.
Aftermarket Services
For the first quarter of 2022, aftermarket
services segment revenue totaled $33.5 million, compared to $29.4
million in the first quarter of 2021 due to higher parts sales as
the market recovery drove an increase in customer demand. Gross
margin of $4.9 million compared to $3.6 million in the first
quarter of 2021. Gross margin percentage was 15%, up from 12% in
the prior year quarter.
Balance Sheet
Long-term debt was $1.5 billion at March 31,
2022, reflecting net debt repayment of $14.0 million during the
first quarter of 2022. Our leverage ratio was 4.5x, compared to
4.1x as of March 31, 2021. Our available liquidity totaled $435.2
million as of March 31, 2022.
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 first quarter of 2022 of 1.8x. The dividend will be paid on May
17, 2022 to stockholders of record at the close of business on May
10, 2022.
Summary Metrics(in thousands,
except percentages, per share amounts and ratios)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
Net income |
$ |
1,721 |
|
$ |
5,992 |
|
|
$ |
4,169 |
|
Adjusted EBITDA |
$ |
81,432 |
|
$ |
83,499 |
|
|
$ |
97,914 |
|
|
|
|
|
|
|
|
|
|
|
Contract operations
revenue |
$ |
163,656 |
|
$ |
159,501 |
|
|
$ |
166,034 |
|
Contract operations gross
margin |
$ |
99,155 |
|
$ |
99,047 |
|
|
$ |
104,669 |
|
Contract operations gross
margin percentage |
|
61 |
% |
|
62 |
% |
|
|
63 |
% |
|
|
|
|
|
|
|
|
|
|
Aftermarket services
revenue |
$ |
33,545 |
|
$ |
35,748 |
|
|
$ |
29,397 |
|
Aftermarket services gross
margin |
$ |
4,907 |
|
$ |
5,242 |
|
|
$ |
3,614 |
|
Aftermarket services gross
margin percentage |
|
15 |
% |
|
15 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative |
$ |
27,773 |
|
$ |
27,167 |
|
|
$ |
25,084 |
|
|
|
|
|
|
|
|
|
|
|
Cash available for
dividend |
$ |
41,147 |
|
$ |
45,545 |
|
|
$ |
61,719 |
|
Cash available for dividend
coverage |
|
1.8 |
x |
|
2.0 |
x |
|
|
2.8 |
x |
|
|
|
|
|
|
|
|
|
|
Free cash flow |
$ |
39,914 |
|
$ |
6,928 |
|
|
$ |
94,073 |
|
Free cash flow after
dividend |
$ |
17,241 |
|
$ |
(15,423 |
) |
|
$ |
71,918 |
|
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end) |
|
3,881 |
|
|
3,878 |
|
|
|
4,067 |
|
Total operating horsepower (at
period end) |
|
3,275 |
|
|
3,247 |
|
|
|
3,329 |
|
Horsepower utilization spot
(at period end) |
|
84 |
% |
|
84 |
% |
|
|
82 |
% |
Conference Call Details
Archrock will host a conference call on Tuesday,
May 10, 2022, to discuss first quarter 2022 financial results. The
call will begin at 11:00 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 1-888-440-5667 in the United States and Canada
or 1-646-960-0476 for international calls. The access code is
4749623.
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, restructuring charges, non-cash stock-based
compensation expense, indemnification income (expense), net and
other items. A reconciliation of Adjusted EBITDA to net income, the
most directly comparable GAAP measure, and a reconciliation of our
full year 2022 Adjusted EBITDA guidance to net income 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,
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, restructuring charges, 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 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: 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, geopolitical 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; Archrock’s ability to integrate
ECOTEC’s products and services into its business and offer them to
its customers; 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; 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, 2021, Archrock’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2022
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 |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
|
Contract operations |
$ |
163,656 |
|
|
$ |
159,501 |
|
|
$ |
166,034 |
|
Aftermarket services |
|
33,545 |
|
|
|
35,748 |
|
|
|
29,397 |
|
Total revenue |
|
197,201 |
|
|
|
195,249 |
|
|
|
195,431 |
|
Cost of sales (excluding
depreciation and amortization): |
|
|
|
|
|
|
|
|
Contract operations |
|
64,501 |
|
|
|
60,454 |
|
|
|
61,365 |
|
Aftermarket services |
|
28,638 |
|
|
|
30,506 |
|
|
|
25,783 |
|
Total cost of sales (excluding depreciation and amortization) |
|
93,139 |
|
|
|
90,960 |
|
|
|
87,148 |
|
Selling, general and
administrative |
|
27,773 |
|
|
|
27,167 |
|
|
|
25,084 |
|
Depreciation and
amortization |
|
43,039 |
|
|
|
43,761 |
|
|
|
45,712 |
|
Long-lived and other asset
impairment |
|
7,416 |
|
|
|
6,243 |
|
|
|
7,073 |
|
Restructuring charges |
|
— |
|
|
|
950 |
|
|
|
897 |
|
Interest expense |
|
25,246 |
|
|
|
25,424 |
|
|
|
31,245 |
|
Gain on sale of assets,
net |
|
(2,112 |
) |
|
|
(709 |
) |
|
|
(11,032 |
) |
Other (income) expense,
net |
|
36 |
|
|
|
(3,073 |
) |
|
|
(1,889 |
) |
Income before income
taxes |
|
2,664 |
|
|
|
4,526 |
|
|
|
11,193 |
|
Provision for (benefit from)
income taxes |
|
943 |
|
|
|
(1,466 |
) |
|
|
7,024 |
|
Net income |
$ |
1,721 |
|
|
$ |
5,992 |
|
|
$ |
4,169 |
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income
per common share(1) |
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
152,690 |
|
|
|
152,320 |
|
|
|
151,425 |
|
Diluted |
|
152,810 |
|
|
|
152,442 |
|
|
|
151,578 |
|
(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 |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
Contract operations |
$ |
163,656 |
|
|
$ |
159,501 |
|
|
$ |
166,034 |
|
|
Aftermarket services |
|
33,545 |
|
|
|
35,748 |
|
|
|
29,397 |
|
|
Total revenue |
$ |
197,201 |
|
|
$ |
195,249 |
|
|
$ |
195,431 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin(1): |
|
|
|
|
|
|
|
|
|
Contract operations |
$ |
99,155 |
|
|
$ |
99,047 |
|
|
$ |
104,669 |
|
|
Aftermarket services |
|
4,907 |
|
|
|
5,242 |
|
|
|
3,614 |
|
|
Total gross margin |
$ |
104,062 |
|
|
$ |
104,289 |
|
|
$ |
108,283 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage: |
|
|
|
|
|
|
|
|
|
Contract operations |
|
61 |
% |
|
|
62 |
% |
|
|
63 |
% |
|
Aftermarket services |
|
15 |
% |
|
|
15 |
% |
|
|
12 |
% |
|
Total gross margin percentage |
|
53 |
% |
|
|
53 |
% |
|
|
55 |
% |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
$ |
27,773 |
|
|
$ |
27,167 |
|
|
$ |
25,084 |
|
|
% of revenue |
|
14 |
% |
|
|
14 |
% |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1) |
$ |
81,432 |
|
|
$ |
83,499 |
|
|
$ |
97,914 |
|
|
% of revenue |
|
41 |
% |
|
|
43 |
% |
|
|
50 |
% |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
$ |
44,858 |
|
|
$ |
27,004 |
|
|
$ |
11,539 |
|
|
Proceeds from sale of
property, plant and equipment and other assets |
|
(5,437 |
) |
|
|
(5,149 |
) |
|
|
(27,282 |
) |
|
Net capital expenditures |
$ |
39,421 |
|
|
$ |
21,855 |
|
|
$ |
(15,743 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end)(2) |
|
3,881 |
|
|
|
3,878 |
|
|
|
4,067 |
|
|
Total operating horsepower (at
period end)(3) |
|
3,275 |
|
|
|
3,247 |
|
|
|
3,329 |
|
|
Average operating
horsepower |
|
3,257 |
|
|
|
3,220 |
|
|
|
3,360 |
|
|
Horsepower utilization: |
|
|
|
|
|
|
|
|
|
Spot (at period end) |
|
84 |
% |
|
|
84 |
% |
|
|
82 |
% |
|
Average |
|
84 |
% |
|
|
83 |
% |
|
|
82 |
% |
|
|
|
|
|
|
|
|
|
|
|
Dividend declared for the
period per share |
$ |
0.145 |
|
|
$ |
0.145 |
|
|
$ |
0.145 |
|
|
Dividend declared for the
period to all shareholders |
$ |
22,584 |
|
|
$ |
22,598 |
|
|
$ |
22,406 |
|
|
Cash available for dividend
coverage(4) |
|
1.8 |
x |
|
|
2.0 |
x |
|
|
2.8 |
x |
|
|
|
|
|
|
|
|
|
|
|
Free cash flow(1) |
$ |
39,914 |
|
|
$ |
6,928 |
|
|
$ |
94,073 |
|
|
Free cash flow after
dividend(1) |
$ |
17,241 |
|
|
$ |
(15,423 |
) |
|
$ |
71,918 |
|
|
(1) Management believes gross margin, Adjusted EBITDA, 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 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, and includes new compressor units completed by a third
party manufacturer that have been delivered to us.(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
2022 |
|
2021 |
|
2021 |
Balance
Sheet |
|
|
|
|
|
|
|
|
|
|
|
Long-term debt(1) |
$ |
1,517,015 |
|
|
$ |
1,530,825 |
|
|
$ |
1,619,238 |
|
Total equity |
|
872,323 |
|
|
|
891,438 |
|
|
|
923,124 |
|
(1) Carrying values are shown net of unamortized premium
and deferred financing costs.
Archrock, Inc.Unaudited
Supplemental InformationReconciliation of Net
Income to Adjusted EBITDA and Gross Margin(in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Net income |
$ |
1,721 |
|
|
$ |
5,992 |
|
|
$ |
4,169 |
|
Depreciation and
amortization |
|
43,039 |
|
|
|
43,761 |
|
|
|
45,712 |
|
Long-lived and other asset
impairment |
|
7,416 |
|
|
|
6,243 |
|
|
|
7,073 |
|
Restructuring charges |
|
— |
|
|
|
950 |
|
|
|
897 |
|
Interest expense |
|
25,246 |
|
|
|
25,424 |
|
|
|
31,245 |
|
Stock-based compensation
expense |
|
3,067 |
|
|
|
2,595 |
|
|
|
2,663 |
|
Indemnification income,
net(1) |
|
— |
|
|
|
— |
|
|
|
(869 |
) |
Provision for (benefit from)
income taxes |
|
943 |
|
|
|
(1,466 |
) |
|
|
7,024 |
|
Adjusted EBITDA(2) |
|
81,432 |
|
|
|
83,499 |
|
|
|
97,914 |
|
Selling, general and
administrative |
|
27,773 |
|
|
|
27,167 |
|
|
|
25,084 |
|
Stock-based compensation
expense |
|
(3,067 |
) |
|
|
(2,595 |
) |
|
|
(2,663 |
) |
Indemnification income,
net(1) |
|
— |
|
|
|
— |
|
|
|
869 |
|
Gain on sale of assets,
net |
|
(2,112 |
) |
|
|
(709 |
) |
|
|
(11,032 |
) |
Other (income) expense,
net |
|
36 |
|
|
|
(3,073 |
) |
|
|
(1,889 |
) |
Gross margin(2) |
$ |
104,062 |
|
|
$ |
104,289 |
|
|
$ |
108,283 |
|
(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 InformationReconciliation of Net
Income to Adjusted EBITDA and Cash Available for
Dividend(in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Net income |
$ |
1,721 |
|
|
$ |
5,992 |
|
|
$ |
4,169 |
|
Depreciation and
amortization |
|
43,039 |
|
|
|
43,761 |
|
|
|
45,712 |
|
Long-lived and other asset
impairment |
|
7,416 |
|
|
|
6,243 |
|
|
|
7,073 |
|
Restructuring charges |
|
— |
|
|
|
950 |
|
|
|
897 |
|
Interest expense |
|
25,246 |
|
|
|
25,424 |
|
|
|
31,245 |
|
Stock-based compensation
expense |
|
3,067 |
|
|
|
2,595 |
|
|
|
2,663 |
|
Indemnification income,
net |
|
— |
|
|
|
— |
|
|
|
(869 |
) |
Provision for (benefit from)
income taxes |
|
943 |
|
|
|
(1,466 |
) |
|
|
7,024 |
|
Adjusted EBITDA(1) |
|
81,432 |
|
|
|
83,499 |
|
|
|
97,914 |
|
Less: Maintenance capital
expenditures |
|
(13,546 |
) |
|
|
(11,883 |
) |
|
|
(8,362 |
) |
Less: Other capital
expenditures |
|
(1,983 |
) |
|
|
(1,789 |
) |
|
|
(2,343 |
) |
Less: Cash tax refund
(payment) |
|
(3 |
) |
|
|
358 |
|
|
|
(4 |
) |
Less: Cash interest
expense |
|
(24,753 |
) |
|
|
(24,640 |
) |
|
|
(25,486 |
) |
Cash available for
dividend(2) |
$ |
41,147 |
|
|
$ |
45,545 |
|
|
$ |
61,719 |
|
(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 InformationReconciliation of Cash
Flows from Operating Activities to Cash Available for
Dividend(in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Net cash provided by operating
activities |
$ |
76,572 |
|
|
$ |
28,675 |
|
|
$ |
77,555 |
|
Inventory write-downs |
|
(294 |
) |
|
|
(376 |
) |
|
|
(218 |
) |
Provision for credit
losses |
|
(108 |
) |
|
|
241 |
|
|
|
(224 |
) |
Gain on sale of assets,
net |
|
2,112 |
|
|
|
709 |
|
|
|
11,032 |
|
Current income tax provision
(benefit) |
|
57 |
|
|
|
(67 |
) |
|
|
432 |
|
Cash tax refund (payment) |
|
(3 |
) |
|
|
358 |
|
|
|
(4 |
) |
Amortization of operating
lease ROU assets |
|
(780 |
) |
|
|
(958 |
) |
|
|
(950 |
) |
Amortization of contract
costs |
|
(4,476 |
) |
|
|
(4,467 |
) |
|
|
(5,591 |
) |
Deferred revenue recognized in
earnings |
|
3,115 |
|
|
|
2,301 |
|
|
|
2,328 |
|
Cash restructuring
charges |
|
— |
|
|
|
950 |
|
|
|
897 |
|
Indemnification income,
net |
|
— |
|
|
|
— |
|
|
|
(869 |
) |
Changes in assets and
liabilities |
|
(18,185 |
) |
|
|
32,958 |
|
|
|
(10,889 |
) |
Maintenance capital
expenditures |
|
(13,546 |
) |
|
|
(11,883 |
) |
|
|
(8,362 |
) |
Other capital
expenditures |
|
(1,983 |
) |
|
|
(1,789 |
) |
|
|
(2,343 |
) |
Payments for settlement of
interest rate swaps that include financing elements |
|
(1,334 |
) |
|
|
(1,107 |
) |
|
|
(1,075 |
) |
Cash available for dividend
(1) |
$ |
41,147 |
|
|
$ |
45,545 |
|
|
$ |
61,719 |
|
(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 InformationReconciliation of Cash
Flows From Operating Activities to Free Cash Flow and Free Cash
Flow After Dividend(in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Net cash provided by operating activities |
$ |
76,572 |
|
|
$ |
28,675 |
|
|
$ |
77,555 |
|
Net cash provided by (used in)
investing activities |
|
(36,658 |
) |
|
|
(21,747 |
) |
|
|
16,518 |
|
Free cash flow(1) |
|
39,914 |
|
|
|
6,928 |
|
|
|
94,073 |
|
Dividends paid to
stockholders |
|
(22,673 |
) |
|
|
(22,351 |
) |
|
|
(22,155 |
) |
Free cash flow after
dividend(1) |
$ |
17,241 |
|
|
$ |
(15,423 |
) |
|
$ |
71,918 |
|
(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 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 InformationReconciliation of Net
Income to Adjusted EBITDA(in thousands)
|
|
|
|
|
|
|
Annual Guidance Range |
|
2022 |
|
Low |
|
High |
Net income(1) |
$ |
22,000 |
|
$ |
52,000 |
Interest expense |
|
97,000 |
|
|
97,000 |
Provision for income
taxes |
|
17,000 |
|
|
17,000 |
Depreciation and
amortization |
|
175,000 |
|
|
175,000 |
Stock-based compensation
expense |
|
12,000 |
|
|
12,000 |
Long-lived and other asset
impairment |
|
7,000 |
|
|
7,000 |
Adjusted EBITDA(2) |
$ |
330,000 |
|
$ |
360,000 |
(1) 2022 annual guidance for net income includes $7 million
of long-lived and other asset impairment as of March 31, 2022, 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, however, they are a reconciling item
between the measure and net income. Long-lived and other asset
impairment for the years 2021 and 2020 was $21 million and $80
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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