Archrock, Inc. (NYSE: AROC) (“Archrock”) today reported results for
the third quarter of 2022.
Third Quarter 2022 Highlights
- Revenue for the third quarter of 2022 was $213.7 million
compared with $195.2 million in the third quarter of 2021.
- Net income for the third quarter of 2022 was $15.4 million
compared with $9.3 million in the third quarter of 2021.
- Gross margin (a non–GAAP measure defined below) for the third
quarter of 2022 was $106.1 million compared with $103.2 million in
the third quarter of 2021.
- Adjusted EBITDA (a non–GAAP measure defined below) for the
third quarter of 2022 was $91.9 million compared with $92.4 million
in the third quarter of 2021.
- Previously–declared quarterly dividend of $0.145 per common
share for the third quarter of 2022 resulted in dividend coverage
of 1.8x.
- Achieved record period-end utilization of 89% for the third
quarter of 2022 compared with 82% in the third quarter of
2021.
- New ventures team completed successful field test for a
proprietary methane capture technology.
- Expect to exceed previously issued 2022 Adjusted EBITDA
guidance due to solid underlying business performance and the
benefit of net gains related to the sale of compression and other
assets realized during the third quarter of 2022.
Management Commentary and Outlook
“The improvement in our compression business accelerated in the
third quarter, supported by the resilient demand for abundant,
affordable and cleaner natural gas,” said Brad Childers, Archrock’s
President and Chief Executive Officer. “For the second quarter in a
row, we drove sequential operating horsepower growth of 100,000,
excluding non-strategic asset sales. Our horsepower utilization
improved meaningfully to 89% at the end of September, increased to
90% at the end of October and should continue to trend higher,
underpinning additional rate increases during the quarter as well
as our expectation for future pricing leverage. We believe record
utilization and robust backlog levels set us up to perform
exceptionally well in 2023. We expect to generate higher financial
returns as we continue to reprice our installed base of horsepower
and work aggressively to drive cost optimization in our
operations.
“During the third quarter, we also closed the sale of small,
non-strategic compressors totaling 124,000 horsepower, bringing
cumulative proceeds from fleet high-grading efforts since the end
of 2019 to nearly $250 million. We now have the opportunity to
redeploy these proceeds for investment in large horsepower units
against the backdrop of an undersupplied midstream compression
market just as we are also beginning to reap the benefits of a
multi-year strategic transformation to standardize and digitize our
platform. We believe the profitable growth we see ahead gives us
line of sight to leverage of below 4.0 times, which will provide
enhanced financial flexibility and the opportunity to increase
shareholder returns in 2023. Our future as the leading provider of
U.S. natural gas compression is robust and sustainable, and I’m
excited about what lies ahead of this inflection point for our
company.
“Lastly, I’m optimistic about the progress we’ve made on new
ventures. The recent passage of the Inflation Reduction Act of 2022
further incentivizes emissions management for many of our customers
while we are coming to market with solutions for methane emissions.
Most recently, Archrock completed the successful pilot of and filed
for a patent for a methane capture technology designed by our new
ventures team. The device is a solution for fugitive emissions
reductions from compressor operations, including unit blowdowns and
compressor packings. This technology is complementary and value
enhancing to our core contract compression services and I am
excited for the team to commence our marketing efforts during the
fourth quarter,” concluded Childers.
Third Quarter 2022 Financial Results
Archrock’s third quarter 2022 net income of $15.4 million
included a non–cash long–lived and other asset impairment of $4.2
million. Archrock’s third quarter 2021 net income of $9.3 million
included a non–cash long–lived and other asset impairment of $5.1
million and depreciation expense of $2.0 million from the write–off
of compression and other assets damaged in Hurricane Ida.
Adjusted EBITDA for the third quarter of 2022 and 2021 included
$12.7 million and $15.4 million, respectively, in net gains related
to the sale of compression and other assets.
Contract Operations
For the third quarter of 2022, contract operations segment
revenue totaled $170.5 million, up from $158.9 million in the third
quarter of 2021. Gross margin was $98.8 million, up from $97.6
million in the third quarter of 2021. This reflected a gross margin
percentage of 58%, compared with 61% in the prior year quarter.
Total operating horsepower at the end of the third quarter of 2022
was 3.4 million compared with 3.2 million at the end of the third
quarter of 2021, and reflected the sale of 134,000 active
horsepower as part of our ongoing fleet high–grading initiative.
Utilization at the end of the third quarter of 2022 increased to
89% from 82% at the end of the third quarter of 2021.
Aftermarket Services
For the third quarter of 2022, aftermarket services segment
revenue totaled $43.2 million, up from $36.3 million in the third
quarter of 2021, driven by higher customer demand for both parts
and maintenance services. Gross margin of $7.3 million increased
compared with $5.6 million in the third quarter of 2021. Gross
margin percentage was 17%, up from 15% in the prior year
quarter.
Balance Sheet and Financial Position
Long–term debt was $1.5 billion at September 30, 2022,
reflecting the net repayment of $34 million in debt during the
quarter. Our available liquidity totaled $492 million. Our leverage
ratio was 4.3x at September 30, 2022, unchanged compared with the
prior year period.
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 2022 of 1.8x. The dividend will be paid on November 15,
2022 to stockholders of record at the close of business on November
8, 2022.
Summary Metrics(in thousands,
except percentages, per share amounts and ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
|
2022 |
|
2022 |
|
2021 |
|
|
Net income |
|
$ |
15,371 |
|
|
$ |
16,746 |
|
|
$ |
9,304 |
|
|
Adjusted EBITDA |
|
$ |
91,919 |
|
|
$ |
99,493 |
|
|
$ |
92,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract operations
revenue |
|
$ |
170,497 |
|
|
$ |
166,298 |
|
|
$ |
158,911 |
|
|
Contract operations gross
margin |
|
$ |
98,803 |
|
|
$ |
97,943 |
|
|
$ |
97,631 |
|
|
Contract operations gross
margin percentage |
|
|
58 |
|
% |
|
59 |
|
% |
|
61 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Aftermarket services
revenue |
|
$ |
43,171 |
|
|
$ |
49,530 |
|
|
$ |
36,255 |
|
|
Aftermarket services gross
margin |
|
$ |
7,338 |
|
|
$ |
7,820 |
|
|
$ |
5,603 |
|
|
Aftermarket services gross
margin percentage |
|
|
17 |
|
% |
|
16 |
|
% |
|
15 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative |
|
$ |
30,500 |
|
|
$ |
27,691 |
|
|
$ |
28,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash available for
dividend |
|
$ |
41,354 |
|
|
$ |
52,068 |
|
|
$ |
50,128 |
|
|
Cash available for dividend
coverage |
|
|
1.8 |
|
x |
|
2.3 |
|
x |
|
2.2 |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
56,296 |
|
|
$ |
3,576 |
|
|
$ |
120,828 |
|
|
Free cash flow after
dividend |
|
$ |
33,737 |
|
|
$ |
(18,918 |
) |
|
$ |
98,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end) |
|
|
3,747 |
|
|
|
3,810 |
|
|
|
3,913 |
|
|
Total operating horsepower (at
period end) |
|
|
3,353 |
|
|
|
3,322 |
|
|
|
3,196 |
|
|
Horsepower utilization spot
(at period end) |
|
|
89 |
|
% |
|
87 |
|
% |
|
82 |
|
% |
Conference Call Details
Archrock will host a conference call on Thursday, November 3,
2022, to discuss third quarter 2022 financial results. The call
will begin at 12:00 p.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 development and deployment of new
technologies 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, June
30, 2022 and September 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 |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2022 |
|
2022 |
|
2021 |
Revenue: |
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
170,497 |
|
|
$ |
166,298 |
|
|
$ |
158,911 |
|
Aftermarket services |
|
|
43,171 |
|
|
|
49,530 |
|
|
|
36,255 |
|
Total revenue |
|
|
213,668 |
|
|
|
215,828 |
|
|
|
195,166 |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excluding
depreciation and amortization): |
|
|
|
|
|
|
|
|
|
Contract operations |
|
|
71,694 |
|
|
|
68,355 |
|
|
|
61,280 |
|
Aftermarket services |
|
|
35,833 |
|
|
|
41,710 |
|
|
|
30,652 |
|
Total cost of sales (excluding depreciation and amortization) |
|
|
107,527 |
|
|
|
110,065 |
|
|
|
91,932 |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
30,500 |
|
|
|
27,691 |
|
|
|
28,839 |
|
Depreciation and
amortization |
|
|
39,953 |
|
|
|
41,356 |
|
|
|
45,280 |
|
Long-lived and other asset
impairment |
|
|
4,154 |
|
|
|
4,647 |
|
|
|
5,121 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
313 |
|
Interest expense |
|
|
25,177 |
|
|
|
24,456 |
|
|
|
25,508 |
|
Gain on sale of assets,
net |
|
|
(12,695 |
) |
|
|
(18,948 |
) |
|
|
(15,393 |
) |
Other (income) expense,
net |
|
|
(585 |
) |
|
|
497 |
|
|
|
337 |
|
Income before income
taxes |
|
|
19,637 |
|
|
|
26,064 |
|
|
|
13,229 |
|
Provision for income
taxes |
|
|
4,266 |
|
|
|
9,318 |
|
|
|
3,925 |
|
Net income |
|
$ |
15,371 |
|
|
$ |
16,746 |
|
|
$ |
9,304 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income
per common share(1) |
|
$ |
0.10 |
|
|
$ |
0.11 |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
153,550 |
|
|
|
153,033 |
|
|
|
152,158 |
|
Diluted |
|
|
153,687 |
|
|
|
153,164 |
|
|
|
152,297 |
|
(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, |
|
|
|
2022 |
|
2022 |
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
170,497 |
|
|
$ |
166,298 |
|
|
$ |
158,911 |
|
|
Aftermarket services |
|
|
43,171 |
|
|
|
49,530 |
|
|
|
36,255 |
|
|
Total revenue |
|
$ |
213,668 |
|
|
$ |
215,828 |
|
|
$ |
195,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin (1): |
|
|
|
|
|
|
|
|
|
|
Contract operations |
|
$ |
98,803 |
|
|
$ |
97,943 |
|
|
$ |
97,631 |
|
|
Aftermarket services |
|
|
7,338 |
|
|
|
7,820 |
|
|
|
5,603 |
|
|
Total gross margin |
|
$ |
106,141 |
|
|
$ |
105,763 |
|
|
$ |
103,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage: |
|
|
|
|
|
|
|
|
|
|
Contract operations |
|
|
58 |
|
% |
|
59 |
|
% |
|
61 |
|
% |
Aftermarket services |
|
|
17 |
|
% |
|
16 |
|
% |
|
15 |
|
% |
Total gross margin percentage |
|
|
50 |
|
% |
|
49 |
|
% |
|
53 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
$ |
30,500 |
|
|
$ |
27,691 |
|
|
$ |
28,839 |
|
|
% of revenue |
|
|
14 |
|
% |
|
13 |
|
% |
|
15 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1) |
|
$ |
91,919 |
|
|
$ |
99,493 |
|
|
$ |
92,351 |
|
|
% of revenue |
|
|
43 |
|
% |
|
46 |
|
% |
|
47 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
64,966 |
|
|
$ |
61,208 |
|
|
$ |
32,132 |
|
|
Proceeds from sale of
property, plant and equipment and other assets |
|
|
(44,262 |
) |
|
|
(59,814 |
) |
|
|
(70,785 |
) |
|
Net capital expenditures |
|
$ |
20,704 |
|
|
$ |
1,394 |
|
|
$ |
(38,653 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total available horsepower (at
period end) (2) |
|
|
3,747 |
|
|
|
3,810 |
|
|
|
3,913 |
|
|
Total operating horsepower (at
period end) (3) |
|
|
3,353 |
|
|
|
3,322 |
|
|
|
3,196 |
|
|
Average operating
horsepower |
|
|
3,355 |
|
|
|
3,297 |
|
|
|
3,225 |
|
|
Horsepower utilization: |
|
|
|
|
|
|
|
|
|
|
Spot (at period end) |
|
|
89 |
|
% |
|
87 |
|
% |
|
82 |
|
% |
Average |
|
|
88 |
|
% |
|
86 |
|
% |
|
82 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Dividend declared for the
period per share |
|
$ |
0.145 |
|
|
$ |
0.145 |
|
|
$ |
0.145 |
|
|
Dividend declared for the
period to all shareholders |
|
$ |
22,645 |
|
|
$ |
22,647 |
|
|
$ |
22,393 |
|
|
Cash available for dividend
coverage (4) |
|
|
1.8 |
|
x |
|
2.3 |
|
x |
|
2.2 |
|
x |
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (1) |
|
$ |
56,296 |
|
|
$ |
3,576 |
|
|
$ |
120,828 |
|
|
Free cash flow after dividend
(1) |
|
$ |
33,737 |
|
|
$ |
(18,918 |
) |
|
$ |
98,322 |
|
|
(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. |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2022 |
|
2022 |
|
2021 |
Balance
Sheet |
|
|
|
|
|
|
|
|
|
Long-term debt(1) |
|
$ |
1,498,895 |
|
$ |
1,532,438 |
|
$ |
1,516,135 |
Total equity |
|
|
869,816 |
|
|
873,918 |
|
|
904,047 |
(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 |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net income |
|
$ |
15,371 |
|
|
$ |
16,746 |
|
|
$ |
9,304 |
|
Depreciation and
amortization |
|
|
39,953 |
|
|
|
41,356 |
|
|
|
45,280 |
|
Long-lived and other asset
impairment |
|
|
4,154 |
|
|
|
4,647 |
|
|
|
5,121 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
313 |
|
Interest expense |
|
|
25,177 |
|
|
|
24,456 |
|
|
|
25,508 |
|
Stock-based compensation
expense |
|
|
2,998 |
|
|
|
2,970 |
|
|
|
2,900 |
|
Provision for income
taxes |
|
|
4,266 |
|
|
|
9,318 |
|
|
|
3,925 |
|
Adjusted EBITDA(1) |
|
|
91,919 |
|
|
|
99,493 |
|
|
|
92,351 |
|
Selling, general and
administrative |
|
|
30,500 |
|
|
|
27,691 |
|
|
|
28,839 |
|
Stock-based compensation
expense |
|
|
(2,998 |
) |
|
|
(2,970 |
) |
|
|
(2,900 |
) |
Gain on sale of assets,
net |
|
|
(12,695 |
) |
|
|
(18,948 |
) |
|
|
(15,393 |
) |
Other (income) expense,
net |
|
|
(585 |
) |
|
|
497 |
|
|
|
337 |
|
Gross margin(1) |
|
$ |
106,141 |
|
|
$ |
105,763 |
|
|
$ |
103,234 |
|
(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 |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net income |
|
$ |
15,371 |
|
|
$ |
16,746 |
|
|
$ |
9,304 |
|
Depreciation and
amortization |
|
|
39,953 |
|
|
|
41,356 |
|
|
|
45,280 |
|
Long-lived and other asset
impairment |
|
|
4,154 |
|
|
|
4,647 |
|
|
|
5,121 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
313 |
|
Interest expense |
|
|
25,177 |
|
|
|
24,456 |
|
|
|
25,508 |
|
Stock-based compensation
expense |
|
|
2,998 |
|
|
|
2,970 |
|
|
|
2,900 |
|
Provision for income
taxes |
|
|
4,266 |
|
|
|
9,318 |
|
|
|
3,925 |
|
Adjusted EBITDA(1) |
|
|
91,919 |
|
|
|
99,493 |
|
|
|
92,351 |
|
Less: Maintenance capital
expenditures |
|
|
(24,084 |
) |
|
|
(21,833 |
) |
|
|
(14,086 |
) |
Less: Other capital
expenditures |
|
|
(2,091 |
) |
|
|
(1,523 |
) |
|
|
(3,430 |
) |
Less: Cash tax payment |
|
|
— |
|
|
|
(400 |
) |
|
|
— |
|
Less: Cash interest
expense |
|
|
(24,390 |
) |
|
|
(23,669 |
) |
|
|
(24,707 |
) |
Cash available for
dividend(2) |
|
$ |
41,354 |
|
|
$ |
52,068 |
|
|
$ |
50,128 |
|
(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 |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net cash provided by operating activities |
|
$ |
76,808 |
|
|
$ |
12,952 |
|
|
$ |
82,108 |
|
Inventory write-downs |
|
|
(319 |
) |
|
|
(427 |
) |
|
|
(110 |
) |
Provision for credit
losses |
|
|
393 |
|
|
|
(257 |
) |
|
|
(366 |
) |
Gain on sale of assets,
net |
|
|
12,695 |
|
|
|
18,948 |
|
|
|
15,393 |
|
Current income tax provision
(benefit) |
|
|
115 |
|
|
|
731 |
|
|
|
142 |
|
Cash tax payment |
|
|
— |
|
|
|
(400 |
) |
|
|
— |
|
Amortization of operating
lease ROU assets |
|
|
(832 |
) |
|
|
(795 |
) |
|
|
(1,031 |
) |
Amortization of contract
costs |
|
|
(4,962 |
) |
|
|
(4,773 |
) |
|
|
(4,771 |
) |
Deferred revenue recognized in
earnings |
|
|
4,168 |
|
|
|
8,426 |
|
|
|
3,033 |
|
Cash restructuring
charges |
|
|
— |
|
|
|
— |
|
|
|
313 |
|
Changes in assets and
liabilities |
|
|
(20,537 |
) |
|
|
41,019 |
|
|
|
(25,953 |
) |
Maintenance capital
expenditures |
|
|
(24,084 |
) |
|
|
(21,833 |
) |
|
|
(14,086 |
) |
Other capital
expenditures |
|
|
(2,091 |
) |
|
|
(1,523 |
) |
|
|
(3,430 |
) |
Payments for settlement of
interest rate swaps that include financing elements |
|
|
— |
|
|
|
— |
|
|
|
(1,114 |
) |
Cash available for
dividend(1) |
|
$ |
41,354 |
|
|
$ |
52,068 |
|
|
$ |
50,128 |
|
(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 |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2022 |
|
2022 |
|
2021 |
Net cash provided by operating activities |
|
$ |
76,808 |
|
|
$ |
12,952 |
|
|
$ |
82,108 |
|
Net cash used in investing
activities |
|
|
(20,512 |
) |
|
|
(9,376 |
) |
|
|
38,720 |
|
Free cash flow(1) |
|
|
56,296 |
|
|
|
3,576 |
|
|
|
120,828 |
|
Dividends paid to
stockholders |
|
|
(22,559 |
) |
|
|
(22,494 |
) |
|
|
(22,506 |
) |
Free cash flow after
dividend(1) |
|
$ |
33,737 |
|
|
$ |
(18,918 |
) |
|
$ |
98,322 |
|
(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 (NYSE:AROC)
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