Archrock, Inc. (NYSE: AROC) (“Archrock”) today reported results for
the second quarter of 2022.
Second Quarter 2022
Highlights
- Revenue for the second quarter of
2022 was $215.8 million compared to $195.6 million in the second
quarter of 2021.
- Net income for the second quarter
of 2022 was $16.7 million compared to $8.8 million in the second
quarter of 2021.
- Adjusted EBITDA (a non-GAAP measure
defined below) for the second quarter of 2022 was $99.5 million
compared to $87.0 million in the second quarter of 2021.
- Previously-declared quarterly
dividend of $0.145 per common share for the second quarter of 2022
resulted in dividend coverage of 2.3x.
- Agreed to acquire for cash a 25%
equity stake in Ecotec International Holdings, LLC (“ECOTEC”), a
global leader in methane emissions monitoring and management;
customer agreements in place to demonstrate ECOTEC’s proven
technology in oil and gas applications this year.
Management Commentary and
Outlook
“Demand for our large midstream compression
accelerated across geographies, customers and horsepower categories
during the second quarter,” said Brad Childers, Archrock’s
President and Chief Executive Officer. “Compared to the first
quarter, we grew our operating horsepower by 100,000, adjusted for
asset sales, and our horsepower utilization improved meaningfully
to 87% at the end of June. In addition, year-to-date booking
activity has doubled compared to the same period in 2021, providing
a visible path to the full utilization of our fleet by the end of
2022. In aftermarket services, we delivered sequential revenue
growth of nearly 50% with solid gross margins as our customers
began catching up on deferred maintenance and as industry-wide
labor scarcity is driving encouraging outsourcing trends for this
work.
“We continue to be excited about the outlook for
our business despite near-term challenges and uncertainties that
have emerged for the global economy, including intense cost
inflation. For compression, we expect capacity across the industry
will remain limited in light of continued capital discipline and
extending lead-times for new large horsepower units, which has
already allowed us to increase spot prices to record levels. In the
coming quarters, we intend to reclaim the increasing costs we are
currently experiencing as we raise pricing on our installed base of
operating horsepower, which we believe will translate into improved
financial performance in 2023.
“Through the cyclical noise, we believe the
impact of recent and unfortunate geopolitical conflicts will be
lasting, resulting in significant and sustained demand for
abundant, affordable and cleaner U.S. natural gas, and therefore,
compression. We remain focused on what we can control, leveraging
our best-in-class customer service and operational execution,
harnessing the digitalization of our compression platform and
advancing our decarbonization strategy. The strength of long-term
natural gas fundamentals and the investments we’ve made to
differentiate our compression franchise give us continued
confidence in our ability to generate compelling returns for our
stockholders,” concluded Childers.
Second Quarter 2022 Financial
Results
Archrock’s second quarter 2022 net income of
$16.7 million included a pre-tax non-cash long-lived and other
asset impairment of $4.6 million. Archrock’s second quarter 2021
net income of $8.8 million included a pre-tax non-cash long-lived
and other asset impairment of $3.0 million and pre-tax
restructuring costs totaling $0.7 million.
Adjusted EBITDA for the second quarter of 2022
and 2021 included $18.9 million and $3.1 million, respectively, in
net gains related to the sale of compression and other assets.
Contract Operations
For the second quarter of 2022, contract
operations segment revenue totaled $166.3 million, up from $163.9
million in the second quarter of 2021. Gross margin (a non-GAAP
measure defined below) was $97.9 million, compared to $102.5
million in the second quarter of 2021. This reflected a gross
margin percentage of 59%, compared to 63% in the prior year
quarter. Total operating horsepower was 3.3 million at the end of
the second quarter of both 2022 and 2021, and reflected the sale of
161,000 active horsepower as part of our ongoing fleet high-grading
initiative. Utilization at the end of the second quarter of 2022
increased to 87% from 82% at the end of the second quarter of
2021.
Aftermarket Services
For the second quarter of 2022, aftermarket
services segment revenue totaled $49.5 million, up from $31.8
million in the second quarter of 2021, driven by higher customer
demand for both parts and maintenance services. Gross margin of
$7.8 million increased compared to $4.3 million in the second
quarter of 2021. Gross margin percentage was 16%, up from 13% in
the prior year quarter.
Balance Sheet and Financial
Position
Long-term debt was $1.5 billion at June 30, 2022
and our available liquidity totaled $476.6 million. Our leverage
ratio was 4.4x at June 30, 2022, compared to 4.3x as of June 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 second quarter of 2022 of 2.3x. The dividend will be paid on
August 16, 2022 to stockholders of record at the close of business
on August 9, 2022.
2022 Annual Guidance
Archrock is providing updated 2022 annual guidance as listed
below. All figures are in thousands, except percentages:
|
|
|
|
|
|
|
|
|
|
Full Year 2022 Guidance |
|
|
|
|
Low |
|
|
High |
|
Net income (1) |
|
$ |
18 |
|
$ |
38 |
|
Adjusted EBITDA (2) |
|
|
330 |
|
|
350 |
|
Cash available for
dividend (3)(4) |
|
|
149 |
|
|
164 |
|
|
|
|
|
|
|
|
|
Segment |
|
|
|
|
|
|
|
Contract operations
revenue |
|
$ |
675 |
|
$ |
685 |
|
Contract operations gross
margin percentage |
|
|
58 |
% |
|
59 |
% |
Aftermarket services
revenue |
|
$ |
165 |
|
$ |
175 |
|
Aftermarket services gross
margin percentage |
|
|
16 |
% |
|
18 |
% |
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
$ |
117 |
|
$ |
115 |
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
|
|
|
|
|
|
Growth capital
expenditures |
|
$ |
150 |
|
$ |
150 |
|
Maintenance capital
expenditures |
|
|
70 |
|
|
75 |
|
Other capital
expenditures |
|
|
10 |
|
|
10 |
|
(1) |
|
2022 annual guidance for net income includes $12 million of
long-lived and other asset impairment as of June 30, 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. |
(3) |
|
Management uses cash available for dividend as a supplemental
performance measure to compute the coverage ratio of estimated cash
flows to planned dividends. |
(4) |
|
A forward-looking estimate of cash provided by operating activities
is not provided because certain items necessary to estimate cash
provided by operating activities, including changes in assets and
liabilities, are not estimable at this time. Changes in assets and
liabilities were $(9.5) million and $19.1 million for the years
2021 and 2020, respectively. |
|
|
|
Summary Metrics(in thousands,
except percentages, per share amounts and ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
|
2022 |
|
2022 |
|
2021 |
|
Net income |
|
$ |
16,746 |
|
|
$ |
1,721 |
|
$ |
8,752 |
|
Adjusted EBITDA |
|
$ |
99,493 |
|
|
$ |
81,432 |
|
$ |
87,045 |
|
|
|
|
|
|
|
|
|
|
|
|
Contract operations
revenue |
|
$ |
166,298 |
|
|
$ |
163,656 |
|
$ |
163,865 |
|
Contract operations gross
margin |
|
$ |
97,943 |
|
|
$ |
99,155 |
|
$ |
102,478 |
|
Contract operations gross
margin percentage |
|
|
59 |
% |
|
|
61 |
% |
|
63 |
% |
|
|
|
|
|
|
|
|
|
|
|
Aftermarket services
revenue |
|
$ |
49,530 |
|
|
$ |
33,545 |
|
$ |
31,750 |
|
Aftermarket services gross
margin |
|
$ |
7,820 |
|
|
$ |
4,907 |
|
$ |
4,260 |
|
Aftermarket services gross
margin percentage |
|
|
16 |
% |
|
|
15 |
% |
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative |
|
$ |
27,691 |
|
|
$ |
27,773 |
|
$ |
26,077 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash available for
dividend |
|
$ |
52,068 |
|
|
$ |
41,147 |
|
$ |
42,446 |
|
Cash available for dividend
coverage |
|
|
2.3 |
x |
|
|
1.8 |
x |
|
1.9 |
x |
|
|
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
3,576 |
|
|
$ |
39,914 |
|
$ |
31,678 |
|
Free cash flow after
dividend |
|
$ |
(18,918 |
) |
|
$ |
17,241 |
|
$ |
9,347 |
|
|
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end) |
|
|
3,810 |
|
|
|
3,881 |
|
|
4,041 |
|
Total operating horsepower (at
period end) |
|
|
3,322 |
|
|
|
3,275 |
|
|
3,295 |
|
Horsepower utilization spot
(at period end) |
|
|
87 |
% |
|
|
84 |
% |
|
82 |
% |
Conference Call Details
Archrock will host a conference call on
Wednesday, August 3, 2022, to discuss second quarter 2022 financial
results. The call will begin at 9:00 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 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 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, and a reconciliation of our
updated full year 2022 cash available for dividend guidance to net
income 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 primary focus on midstream natural gas compression
and a commitment to helping its customers produce, compress
and transport natural gas in a safe and environmentally responsible
way. Headquartered in Houston, Texas, Archrock is the
leading provider of natural gas compression services to customers
in the energy industry throughout the U.S. and a leading
supplier of aftermarket services to customers that own compression
equipment. For more information on how the Company embodies its
purpose, WE POWER A CLEANER AMERICA,
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 Reports on Form 10-Q for the quarters ended March 31,
2022 and June 30, 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 |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
Revenue: |
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
166,298 |
|
|
$ |
163,656 |
|
|
$ |
163,865 |
|
Aftermarket services |
|
|
49,530 |
|
|
|
33,545 |
|
|
|
31,750 |
|
Total revenue |
|
|
215,828 |
|
|
|
197,201 |
|
|
|
195,615 |
|
Cost of sales (excluding
depreciation and amortization): |
|
|
|
|
|
|
|
|
|
Contract operations |
|
|
68,355 |
|
|
|
64,501 |
|
|
|
61,387 |
|
Aftermarket services |
|
|
41,710 |
|
|
|
28,638 |
|
|
|
27,490 |
|
Total cost of sales (excluding depreciation and amortization) |
|
|
110,065 |
|
|
|
93,139 |
|
|
|
88,877 |
|
Selling, general and
administrative |
|
|
27,691 |
|
|
|
27,773 |
|
|
|
26,077 |
|
Depreciation and
amortization |
|
|
41,356 |
|
|
|
43,039 |
|
|
|
44,193 |
|
Long-lived and other asset
impairment |
|
|
4,647 |
|
|
|
7,416 |
|
|
|
2,960 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
743 |
|
Interest expense |
|
|
24,456 |
|
|
|
25,246 |
|
|
|
25,958 |
|
Gain on sale of assets,
net |
|
|
(18,948 |
) |
|
|
(2,112 |
) |
|
|
(3,124 |
) |
Other (income) expense,
net |
|
|
497 |
|
|
|
36 |
|
|
|
(82 |
) |
Income before income
taxes |
|
|
26,064 |
|
|
|
2,664 |
|
|
|
10,013 |
|
Provision for income
taxes |
|
|
9,318 |
|
|
|
943 |
|
|
|
1,261 |
|
Net income |
|
$ |
16,746 |
|
|
$ |
1,721 |
|
|
$ |
8,752 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income
per common share (1) |
|
$ |
0.11 |
|
|
$ |
0.01 |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
153,033 |
|
|
|
152,690 |
|
|
|
152,033 |
|
Diluted |
|
|
153,164 |
|
|
|
152,810 |
|
|
|
152,203 |
|
(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 |
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
|
2022 |
|
2022 |
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
166,298 |
|
|
$ |
163,656 |
|
|
$ |
163,865 |
|
|
Aftermarket services |
|
|
49,530 |
|
|
|
33,545 |
|
|
|
31,750 |
|
|
Total revenue |
|
$ |
215,828 |
|
|
$ |
197,201 |
|
|
$ |
195,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin (1): |
|
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
97,943 |
|
|
$ |
99,155 |
|
|
$ |
102,478 |
|
|
Aftermarket services |
|
|
7,820 |
|
|
|
4,907 |
|
|
|
4,260 |
|
|
Total gross margin |
|
$ |
105,763 |
|
|
$ |
104,062 |
|
|
$ |
106,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage: |
|
|
|
|
|
|
|
|
|
|
Contract operations |
|
|
59 |
% |
|
|
61 |
% |
|
|
63 |
% |
|
Aftermarket services |
|
|
16 |
% |
|
|
15 |
% |
|
|
13 |
% |
|
Total gross margin percentage |
|
|
49 |
% |
|
|
53 |
% |
|
|
55 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
$ |
27,691 |
|
|
$ |
27,773 |
|
|
$ |
26,077 |
|
|
% of revenue |
|
|
13 |
% |
|
|
14 |
% |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1) |
|
$ |
99,493 |
|
|
$ |
81,432 |
|
|
$ |
87,045 |
|
|
% of revenue |
|
|
46 |
% |
|
|
41 |
% |
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
61,208 |
|
|
$ |
44,858 |
|
|
$ |
27,210 |
|
|
Proceeds from sale of
property, plant and equipment and other assets |
|
|
(59,814 |
) |
|
|
(5,437 |
) |
|
|
(9,691 |
) |
|
Net capital expenditures |
|
$ |
1,394 |
|
|
$ |
39,421 |
|
|
$ |
17,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end) (2) |
|
|
3,810 |
|
|
|
3,881 |
|
|
|
4,041 |
|
|
Total operating horsepower (at
period end) (3) |
|
|
3,322 |
|
|
|
3,275 |
|
|
|
3,295 |
|
|
Average operating
horsepower |
|
|
3,297 |
|
|
|
3,257 |
|
|
|
3,316 |
|
|
Horsepower utilization: |
|
|
|
|
|
|
|
|
|
|
Spot (at period end) |
|
|
87 |
% |
|
|
84 |
% |
|
|
82 |
% |
|
Average |
|
|
86 |
% |
|
|
84 |
% |
|
|
82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Dividend declared for the
period per share |
|
$ |
0.145 |
|
|
$ |
0.145 |
|
|
$ |
0.145 |
|
|
Dividend declared for the
period to all shareholders |
|
$ |
22,647 |
|
|
$ |
22,584 |
|
|
$ |
22,404 |
|
|
Cash available for dividend
coverage (4) |
|
|
2.3 |
x |
|
|
1.8 |
x |
|
|
1.9 |
x |
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (1) |
|
$ |
3,576 |
|
|
$ |
39,914 |
|
|
$ |
31,678 |
|
|
Free cash flow after dividend
(1) |
|
$ |
(18,918 |
) |
|
$ |
17,241 |
|
|
$ |
9,347 |
|
|
(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. |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
Balance Sheet |
|
|
|
|
|
|
|
|
|
Long-term debt (1) |
|
$ |
1,532,438 |
|
$ |
1,517,015 |
|
$ |
1,612,490 |
Total equity |
|
|
873,918 |
|
|
872,323 |
|
|
913,821 |
(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 |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net income |
|
$ |
16,746 |
|
|
$ |
1,721 |
|
|
$ |
8,752 |
|
Depreciation and
amortization |
|
|
41,356 |
|
|
|
43,039 |
|
|
|
44,193 |
|
Long-lived and other asset
impairment |
|
|
4,647 |
|
|
|
7,416 |
|
|
|
2,960 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
743 |
|
Interest expense |
|
|
24,456 |
|
|
|
25,246 |
|
|
|
25,958 |
|
Stock-based compensation
expense |
|
|
2,970 |
|
|
|
3,067 |
|
|
|
3,178 |
|
Provision for income
taxes |
|
|
9,318 |
|
|
|
943 |
|
|
|
1,261 |
|
Adjusted EBITDA (1) |
|
|
99,493 |
|
|
|
81,432 |
|
|
|
87,045 |
|
Selling, general and
administrative |
|
|
27,691 |
|
|
|
27,773 |
|
|
|
26,077 |
|
Stock-based compensation
expense |
|
|
(2,970 |
) |
|
|
(3,067 |
) |
|
|
(3,178 |
) |
Gain on sale of assets,
net |
|
|
(18,948 |
) |
|
|
(2,112 |
) |
|
|
(3,124 |
) |
Other (income) expense,
net |
|
|
497 |
|
|
|
36 |
|
|
|
(82 |
) |
Gross margin (1) |
|
$ |
105,763 |
|
|
$ |
104,062 |
|
|
$ |
106,738 |
|
(1) |
|
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 |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net income |
|
$ |
16,746 |
|
|
$ |
1,721 |
|
|
$ |
8,752 |
|
Depreciation and
amortization |
|
|
41,356 |
|
|
|
43,039 |
|
|
|
44,193 |
|
Long-lived and other asset
impairment |
|
|
4,647 |
|
|
|
7,416 |
|
|
|
2,960 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
743 |
|
Interest expense |
|
|
24,456 |
|
|
|
25,246 |
|
|
|
25,958 |
|
Stock-based compensation
expense |
|
|
2,970 |
|
|
|
3,067 |
|
|
|
3,178 |
|
Provision for income
taxes |
|
|
9,318 |
|
|
|
943 |
|
|
|
1,261 |
|
Adjusted EBITDA (1) |
|
|
99,493 |
|
|
|
81,432 |
|
|
|
87,045 |
|
Less: Maintenance capital
expenditures |
|
|
(21,833 |
) |
|
|
(13,546 |
) |
|
|
(13,015 |
) |
Less: Other capital
expenditures |
|
|
(1,523 |
) |
|
|
(1,983 |
) |
|
|
(5,814 |
) |
Less: Cash tax payment |
|
|
(400 |
) |
|
|
(3 |
) |
|
|
(601 |
) |
Less: Cash interest
expense |
|
|
(23,669 |
) |
|
|
(24,753 |
) |
|
|
(25,169 |
) |
Cash available for dividend
(2) |
|
$ |
52,068 |
|
|
$ |
41,147 |
|
|
$ |
42,446 |
|
(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 |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net cash provided by operating activities |
|
$ |
12,952 |
|
|
$ |
76,572 |
|
|
$ |
49,062 |
|
Inventory write-downs |
|
|
(427 |
) |
|
|
(294 |
) |
|
|
(293 |
) |
Provision for credit
losses |
|
|
(257 |
) |
|
|
(108 |
) |
|
|
439 |
|
Gain on sale of assets,
net |
|
|
18,948 |
|
|
|
2,112 |
|
|
|
3,124 |
|
Current income tax provision
(benefit) |
|
|
731 |
|
|
|
57 |
|
|
|
(142 |
) |
Cash tax payment |
|
|
(400 |
) |
|
|
(3 |
) |
|
|
(601 |
) |
Amortization of operating
lease ROU assets |
|
|
(795 |
) |
|
|
(780 |
) |
|
|
(941 |
) |
Amortization of contract
costs |
|
|
(4,773 |
) |
|
|
(4,476 |
) |
|
|
(5,161 |
) |
Deferred revenue recognized in
earnings |
|
|
8,426 |
|
|
|
3,115 |
|
|
|
2,720 |
|
Cash restructuring
charges |
|
|
— |
|
|
|
— |
|
|
|
743 |
|
Changes in assets and
liabilities |
|
|
41,019 |
|
|
|
(18,185 |
) |
|
|
13,419 |
|
Maintenance capital
expenditures |
|
|
(21,833 |
) |
|
|
(13,546 |
) |
|
|
(13,015 |
) |
Other capital
expenditures |
|
|
(1,523 |
) |
|
|
(1,983 |
) |
|
|
(5,814 |
) |
Payments for settlement of
interest rate swaps that include financing elements |
|
|
— |
|
|
|
(1,334 |
) |
|
|
(1,094 |
) |
Cash available for dividend
(1) |
|
$ |
52,068 |
|
|
$ |
41,147 |
|
|
$ |
42,446 |
|
(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 |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net cash provided by operating activities |
|
$ |
12,952 |
|
|
$ |
76,572 |
|
|
$ |
49,062 |
|
Net cash used in investing
activities |
|
|
(9,376 |
) |
|
|
(36,658 |
) |
|
|
(17,384 |
) |
Free cash flow (1) |
|
|
3,576 |
|
|
|
39,914 |
|
|
|
31,678 |
|
Dividends paid to
stockholders |
|
|
(22,494 |
) |
|
|
(22,673 |
) |
|
|
(22,331 |
) |
Free cash flow after dividend
(1) |
|
$ |
(18,918 |
) |
|
$ |
17,241 |
|
|
$ |
9,347 |
|
(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) |
|
$ |
18 |
|
$ |
38 |
Interest expense |
|
|
103 |
|
|
103 |
Provision for income
taxes |
|
|
15 |
|
|
15 |
Depreciation and
amortization |
|
|
170 |
|
|
170 |
Stock-based compensation
expense |
|
|
12 |
|
|
12 |
Long-lived and other asset
impairment |
|
|
12 |
|
|
12 |
Adjusted EBITDA (2) |
|
|
330 |
|
|
350 |
Less: Maintenance capital
expenditures |
|
|
70 |
|
|
75 |
Less: Other capital
expenditures |
|
|
10 |
|
|
10 |
Less: Cash tax expense |
|
|
1 |
|
|
1 |
Less: Cash interest
expense |
|
|
100 |
|
|
100 |
Cash available for dividend
(3)(4) |
|
$ |
149 |
|
$ |
164 |
(1) |
|
2022 annual guidance for net income includes $12 million of
long-lived and other asset impairment as of June 30, 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. |
(3) |
|
Management uses cash available for dividend as a supplemental
performance measure to compute the coverage ratio of estimated cash
flows to planned dividends. |
(4) |
|
A forward-looking estimate of cash provided by operating activities
is not provided because certain items necessary to estimate cash
provided by operating activities, including changes in assets and
liabilities, are not estimable at this time. Changes in assets and
liabilities were $(9.5) million and $19.1 million for the years
2021 and 2020, respectively. |
Archrock (NYSE:AROC)
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Archrock (NYSE:AROC)
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