THE
WOODLANDS, Texas, May 8, 2024
/PRNewswire/ -- Kodiak Gas Services, Inc. (NYSE: KGS) ("Kodiak" or
the "Company"), a leading provider of critical energy
infrastructure and contract compression services, today reported
financial and operating results for the quarter ended March 31, 2024 and also updated full-year 2024
guidance. First quarter 2024 results do not include any
contribution from the Company's acquisition of CSI Compressco
("CSI") that closed on April 1,
2024.
First Quarter 2024 Highlights
- Total revenues for the quarter were $215.5 million compared to $190.1 million in the first quarter of 2023
- Core Compression Operations segment revenues increased 2%
sequentially and 9% over last year's first quarter
- Compression Operations segment Adjusted Gross Margin Percentage
was 65.9%
- Net income was $30.2 million
compared to a net loss of $12.3
million in the first quarter of 2023
- Record quarterly Adjusted EBITDA(1) of $117.8 million compared to $106.3 million in the first quarter of 2023
- Horsepower utilization ended the first quarter of 2024 at
99.8%
- Declared a cash dividend of $0.38
per share, or $1.52 per share
annualized
Increased 2024 Guidance
- Completed the acquisition of CSI on April 1, 2024, creating the industry's largest
contract compression fleet
- Raised full-year 2024 Adjusted EBITDA guidance to a range of
$580 to $610
million
- Expect to generate Discretionary Cash Flow(1) of
between $360 and $390 million in 2024
"2024 is off to a strong start marked by steady growth and solid
execution in our core contract compression business," stated
Mickey McKee, Kodiak's founder and
Chief Executive Officer. "Our focus on the Permian and other
liquids-rich, associated gas basins allowed us to deliver strong
first quarter results despite soft natural gas prices, and we stand
to benefit from the coming growth in U.S. natural gas supply to
meet demand from LNG projects scheduled to come online in the near
term. We're also excited about the evolving prospects for U.S.
natural gas demand to support the build-out in data centers to
support the increasing adoption of artificial intelligence.
"With the closing of the CSI Compressco acquisition, Kodiak now
has the largest contract compression fleet in the industry and a
broadened suite of offerings to help our customers meet their
compression infrastructure needs. We're pleased to announce revised
2024 guidance reflecting our expectations for the combined company,
and we've made great progress towards realizing the significant
synergies we see in the combination. Our capital allocation
strategy remains focused on disciplined growth in our compression
fleet combined with an attractive return of capital to investors
through our dividend."
(1) Adjusted EBITDA and Discretionary Cash Flow are Non-GAAP
Financial Measures. A definition and reconciliation to the most
comparable GAAP financial measure is included herein.
Segment Information
Compression Operations segment revenues were $193.4 million in the first quarter of 2024, a 9%
increase compared to $177.7 million
in the first quarter of 2023. Compression Operations segment
Adjusted Gross Margin was $127.5
million in the first quarter of 2024, an 11% increase
compared to $114.9 million in the
first quarter of 2023.
Other Services segment revenues were $22.1 million in the first quarter of 2024
compared to $12.4 million in the
first quarter of 2023. Other Services segment gross margin and
Adjusted Gross Margin were each $4.4
million in the first quarter of 2024, compared to
$3.4 million in the first quarter of
2023.
Long-Term Debt and Liquidity
Total debt outstanding was $1.9
billion as of March 31, 2024, comprised of borrowings on
the ABL Facility and senior notes due 2029. At March 31, 2024,
the Company had $1.1
billion available on its ABL Facility.
On April 1, 2024, the Company
completed the acquisition of CSI and used a portion of the
availability under its ABL facility to retire CSI's debt and pay
transaction fees and expenses. Pro forma for the CSI acquisition,
the Company had $1.8 billion drawn
and $0.4 billion available on its ABL
Facility, and $2.6 billion in total
debt.
|
Summary Financial
Data
(in thousands,
except percentages)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
2024
|
|
December
31,
2023
|
|
March
31,
2023
|
|
Total
revenues
|
|
$
215,492
|
|
$
225,980
|
|
$
190,112
|
|
Net income
(loss)
|
|
$
30,232
|
|
$
(6,874)
|
|
$
(12,343)
|
|
Adjusted EBITDA
(1)
|
|
$
117,762
|
|
$
113,878
|
|
$
106,318
|
|
Adjusted EBITDA
percentage (1)
|
|
54.6 %
|
|
50.4 %
|
|
55.9 %
|
|
|
|
|
|
|
|
|
Compression Operations
revenue
|
|
$
193,399
|
|
$
189,616
|
|
$
177,697
|
|
Compression Operations
Adjusted Gross Margin (1)
|
|
$
127,517
|
|
$
125,781
|
|
$
114,927
|
|
Compression Operations
Adjusted Gross Margin Percentage (1)
|
|
65.9 %
|
|
66.3 %
|
|
64.7 %
|
|
|
|
|
|
|
|
|
Other Services
revenue
|
|
$
22,093
|
|
$
36,364
|
|
$
12,415
|
|
Other Services Adjusted
Gross Margin (1)
|
|
$
4,409
|
|
$
8,492
|
|
$
3,427
|
|
Other Services Adjusted
Gross Margin Percentage (1)
|
|
20.0 %
|
|
23.4 %
|
|
27.6 %
|
|
|
|
|
|
|
|
|
Maintenance capital
expenditures
|
|
$
10,642
|
|
$
8,934
|
|
$
4,803
|
|
Growth capital
expenditures
|
|
$
59,401
|
|
$
60,472
|
|
$
35,816
|
|
|
|
|
|
|
|
|
Discretionary Cash Flow
(1)
|
|
$
71,925
|
|
$
70,527
|
|
$
49,706
|
|
Free Cash Flow
(1)
|
|
$
12,524
|
|
$
10,449
|
|
$
13,922
|
|
|
(1) Adjusted
EBITDA, Adjusted EBITDA Percentage, Adjusted Gross Margin, Adjusted
Gross Margin Percentage, Discretionary
Cash Flow and Free Cash Flow are non-GAAP financial measures. For
definitions and reconciliations to the most
directly
comparable financial measures calculated and presented in
accordance with GAAP, see "Non-GAAP Financial Measures"
below.
|
|
Summary Operating
Data
(as of the dates
indicated)
|
|
|
|
March
31,
2024
|
|
December
31,
2023
|
|
March
31,
2023
|
|
Fleet horsepower
(1)
|
|
3,290,971
|
|
3,261,661
|
|
3,175,006
|
|
Revenue-generating
horsepower (2)
|
|
3,285,592
|
|
3,258,951
|
|
3,169,301
|
|
Fleet compression
units
|
|
3,091
|
|
3,078
|
|
3,041
|
|
Revenue-generating
compression units
|
|
3,064
|
|
3,062
|
|
3,033
|
|
Revenue-generating
horsepower per revenue-generating
compression unit
(3)
|
|
1,072
|
|
1,064
|
|
1,045
|
|
Horsepower utilization
(4)
|
|
99.8 %
|
|
99.9 %
|
|
99.8 %
|
|
|
|
(1)
|
Fleet horsepower and
fleet compression units include revenue-generating horsepower and
idle horsepower, which are compression units that do not have a
signed contract or are not subject to a firm commitment from our
customer and are not yet generating revenue. Fleet horsepower
excludes 27,663, 33,020 and 58,645 of non-marketable or obsolete
horsepower as of March 31, 2024, December 31, 2023, and March 31,
2023, respectively.
|
|
(2)
|
Revenue-generating
horsepower and revenue-generating compression units include
compression units that are operating under contract and generating
revenue and compression units which are available to be deployed
and for which we have a signed contract or are subject to a firm
commitment from our customer.
|
|
(3)
|
Calculated as (i)
revenue-generating horsepower divided by (ii) revenue-generating
compression units at period end.
|
|
(4)
|
Horsepower utilization
is calculated as (i) revenue-generating horsepower divided by (ii)
fleet horsepower.
|
Full-Year 2024 Guidance
Kodiak is providing revised guidance for the full year 2024. The
full-year 2024 guidance below incorporates three quarters of the
financial impact of the CSI acquisition given the April 1, 2024, closing date. All amounts below
are in thousands.
|
|
Full-Year 2024
Guidance
|
|
|
Low
|
|
High
|
|
Total
revenues
|
|
$
1,125,000
|
|
$
1,175,000
|
|
Adjusted EBITDA
(1)
|
|
$
580,000
|
|
$
610,000
|
|
Discretionary Cash Flow
(1)(2)
|
|
$
360,000
|
|
$
390,000
|
|
|
|
|
|
|
Capital
Expenditures:
|
|
|
|
|
|
Growth capital
expenditures (3)
|
|
$
215,000
|
|
$
235,000
|
|
Maintenance capital
expenditures
|
|
$
55,000
|
|
$
65,000
|
|
|
|
(1)
|
The Company is unable
to reconcile projected Adjusted EBITDA to projected net income
(loss) and Discretionary Cash Flow to projected net cash provided
by operating activities, the most comparable financial measures
calculated in accordance with GAAP, respectively, without
unreasonable efforts because components of the calculations are
inherently unpredictable, such as changes to current assets and
liabilities, unknown future events, and estimating certain future
GAAP measures. The inability to project certain components of the
calculation would significantly affect the accuracy of the
reconciliations.
|
|
(2)
|
Discretionary Cash Flow
assumes no change to Secured Overnight Financing Rate
futures.
|
|
(3)
|
Growth capital
expenditures exclude approximately $35 million in extraordinary
capital expenditures related to the acquisition of CSI, including
safety and emissions upgrades to the acquired fleet, facilities
rationalization and vehicle and rolling stock purchases.
|
Conference Call
Kodiak will conduct a conference call on Thursday, May 9,
2024, at 11:00 a.m. Eastern Time
(10:00 a.m. Central Time) to discuss
financial and operating results for the quarter ended March 31, 2024. To listen to the call by phone,
dial 201-389-0872 and ask for the Kodiak Gas Services call at least
10 minutes prior to the start time. To listen to the call via
webcast, please visit the Investors tab of Kodiak's website at
www.kodiakgas.com.
About Kodiak Gas Services, Inc.
Kodiak Gas Services, Inc. is the largest contract compression
services provider in the continental United States with a revenue-generating fleet
of approximately 4.3 million horsepower. The Company focuses on
providing contract compression and related services to oil and gas
producers and midstream customers in high–volume gas gathering
systems, processing facilities, multi–well gas lift applications
and natural gas transmission systems. More information is available
at www.kodiakgas.com.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income (loss) before interest
expense, net: income tax expense (benefit); and depreciation and
amortization; plus (i) loss on extinguishment of debt; (ii) loss
(gain) on derivatives; (iii) equity compensation expense; (iv)
transaction expenses; (v) loss (gain) on sale of assets; and (vi)
impairment of compression equipment. Adjusted EBITDA Percentage is
defined as Adjusted EBITDA divided by total revenues. Adjusted
EBITDA and Adjusted EBITDA Percentage are used as supplemental
financial measures by our management and external users of our
financial statements, such as investors, commercial banks and other
financial institutions, to assess: (i) the financial performance of
our assets without regard to the impact of financing methods,
capital structure or historical cost basis of our assets; (ii) the
viability of capital expenditure projects and the overall rates of
return on alternative investment opportunities; (iii) the ability
of our assets to generate cash sufficient to make debt payments and
pay dividends; and (iv) our operating performance as compared to
those of other companies in our industry without regard to the
impact of financing methods and capital structure. We believe
Adjusted EBITDA and Adjusted EBITDA Percentage provide useful
information to investors because, when viewed with our GAAP results
and the accompanying reconciliation, they provide a more complete
understanding of our performance than GAAP results alone. We also
believe that external users of our financial statements benefit
from having access to the same financial measures that management
uses in evaluating the results of our business. Reconciliations of
Adjusted EBITDA to net income (loss), the most directly comparable
GAAP financial measure, and net cash provided by operating
activities are presented below.
Adjusted Gross Margin is defined as revenue less cost of
operations, exclusive of depreciation and amortization expense.
Adjusted Gross Margin Percentage is defined as Adjusted Gross
Margin divided by revenues. We believe Adjusted Gross Margin and
Adjusted Gross Margin Percentage are useful as supplemental
measures to investors of our operating profitability.
Reconciliations of Adjusted Gross Margin to gross margin are
presented below.
Discretionary Cash Flow is defined as net cash provided by
operating activities less (i) maintenance capital expenditures;(ii)
gain on sale of capital assets; (iii) certain changes in operating
assets and liabilities; and (iv) certain other expenses; plus (x)
cash loss on extinguishment of debt; and (y) transaction expenses.
We believe Discretionary Cash Flow is a useful liquidity and
performance measure and supplemental financial measure for us and
our investors in assessing our ability to pay cash dividends to our
stockholders, make growth capital expenditures and assess our
operating performance. Reconciliations of Discretionary Cash Flow
to net income and net cash provided by operating activities are
presented below.
Free Cash Flow is defined as net cash provided by operating
activities less (i) maintenance capital expenditures;(ii) gain on
sale of capital assets; (iii) certain changes in operating assets
and liabilities; (iv) certain other expenses; and (v) net growth
capital expenditures; plus (x) cash loss on extinguishment of debt;
(y) transaction expenses; and (z) proceeds from sale of capital
assets. We believe Free Cash Flow is a liquidity measure and useful
supplemental financial measure for us and investors in assessing
our ability to pursue business opportunities and investments to
grow our business and to service our debt. Reconciliations of Free
Cash Flow to net income and net cash provided by operating
activities are presented below.
Cautionary Note Regarding Forward-Looking Statements
This news release contains, and our officers and representatives
may from time to time make, "forward-looking statements" within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are neither historical facts nor assurances of future
performance. Instead, they are based only on our current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions.
Forward-looking statements can be identified by words such as:
"anticipate," "intend," "plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy," "future," "likely,"
"may," "should," "will" and similar references to future periods.
Examples of forward-looking statements include, among others,
statements we make regarding: (i) expected operating results, such
as revenue growth and earnings, including changes due to the
acquisition of CSI Compressco (the "CSI Acquisition"), and our
ability to service our indebtedness; (ii) anticipated levels of
capital expenditures and uses of capital; (iii) current or future
volatility in the credit markets and future market conditions; (iv)
potential and pending acquisition transactions or other strategic
transactions, the timing thereof, the receipt of necessary
approvals to close those transactions, our ability to finance such
transactions and our ability to achieve the intended operational,
financial and strategic benefits from any such transactions; (v)
expected synergies and efficiencies to be achieved as a result of
the CSI Acquisition; (vi) expectations regarding leverage and
dividend profile as a result of the CSI Acquisition, including the
amount and timing of future dividend payments; (vii) expectations
of the effect on our financial condition of claims, litigation,
environmental costs, contingent liabilities and governmental and
regulatory investigations and proceedings; (viii) production and
capacity forecasts for the natural gas and oil industry; (ix)
strategy for customer retention, growth, fleet maintenance, market
position, and financial results; (x) our interest rate hedges; and
(xi) strategy for risk management.
Because forward-looking statements relate to the future, they
are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict and many of which are
outside of our control. Our actual results and financial condition
may differ materially from those indicated in the forward-looking
statements. Therefore, you should not place undue reliance on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following: (i) a reduction in the demand
for natural gas and oil; (ii) the loss of, or the deterioration of
the financial condition of, any of our key customers; (iii)
nonpayment and nonperformance by our customers, suppliers or
vendors; (iv) competitive pressures that may cause us to lose
market share; (v) the structure of our Compression Operations
contracts and the failure of our customers to continue to contract
for services after expiration of the primary term; (vi) our ability
to successfully integrate any acquired business, including CSI
Compressco, and realize the expected benefits thereof; (vii) our
ability to fund purchases of additional compression equipment;
(viii) a deterioration in general economic, business, geopolitical
or industry conditions, including as a result of the conflict
between Russia and Ukraine, inflation, and slow economic growth
in the United States; (ix) tax
legislation and administrative initiatives or challenges to our tax
positions; (x) the loss of key management, operational personnel or
qualified technical personnel; (xi) our dependence on a limited
number of suppliers; (xii) the cost of compliance with existing
governmental regulations and proposed governmental regulations,
including climate change legislation; (xiii) the cost of compliance
with regulatory initiatives and stakeholder pressures, including
environmental, social and governance scrutiny; (xiv) the inherent
risks associated with our operations, such as equipment defects and
malfunctions; (xv) our reliance on third-party components for use
in our information technology systems; (xvi) legal and reputational
risks and expenses relating to the privacy, use and security of
employee and client information; (xvii) threats of cyber-attacks or
terrorism; (xviii) agreements that govern our debt contain features
that may limit our ability to operate our business and fund future
growth and also increase our exposure to risk during adverse
economic conditions; (xix) volatility in interest rates; (xx) our
ability to access the capital and credit markets or borrow on
affordable terms to obtain additional capital that we may require;
(xxi) the effectiveness of our disclosure controls and procedures;
and (xxii) such other factors as discussed throughout the "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" sections of our Annual Report
on Form 10-K for the year ended December 31,
2023, as filed with the U.S. Securities and Exchange
Commission.
Any forward-looking statement made by us in this news release is
based only on information currently available to us and speaks only
as of the date on which it is made. Except as may be required by
applicable law, we undertake no obligation to publicly update any
forward-looking statement whether as a result of new information,
future developments or otherwise.
Contacts:
Kodiak Gas Services, Inc.
Graham Sones, VP – Investor
Relations
ir@kodiakgas.com
Dennard Lascar Investor
Relations
Ken Dennard / Rick Black
KGS@DennardLascar.com
|
KODIAK GAS
SERVICES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands,
except share and per share data)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
2024
|
|
December
31,
2023
|
|
March
31,
2023
|
|
Revenues:
|
|
|
|
|
|
|
|
Compression
Operations
|
|
$
193,399
|
|
$
189,616
|
|
$
177,697
|
|
Other
Services
|
|
22,093
|
|
36,364
|
|
12,415
|
|
Total
revenues
|
|
215,492
|
|
225,980
|
|
190,112
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of operations
(exclusive of depreciation and amortization
shown below)
|
|
|
|
|
|
|
|
Compression
Operations
|
|
65,882
|
|
63,835
|
|
62,770
|
|
Other
Services
|
|
17,684
|
|
27,872
|
|
8,988
|
|
Depreciation and
amortization
|
|
46,944
|
|
46,455
|
|
44,897
|
|
Selling, general and
administrative expenses
|
|
24,824
|
|
27,137
|
|
13,085
|
|
(Gain) loss on sale of
property, plant and equipment
|
|
—
|
|
(56)
|
|
17
|
|
Total operating
expenses
|
|
155,334
|
|
165,243
|
|
129,757
|
|
Income from
operations
|
|
60,158
|
|
60,737
|
|
60,355
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(39,740)
|
|
(40,484)
|
|
(68,662)
|
|
Gain (loss) on
derivatives
|
|
19,757
|
|
(21,814)
|
|
(7,995)
|
|
Other
expense
|
|
(68)
|
|
(8)
|
|
(31)
|
|
Total other expenses,
net
|
|
(20,051)
|
|
(62,306)
|
|
(76,688)
|
|
Income (loss) before
income taxes
|
|
40,107
|
|
(1,569)
|
|
(16,333)
|
|
Income tax expense
(benefit)
|
|
9,875
|
|
5,305
|
|
(3,990)
|
|
Net income
(loss)
|
|
$
30,232
|
|
$
(6,874)
|
|
$
(12,343)
|
|
Basic and diluted
earnings per share
|
|
|
|
|
|
|
|
Basic net earnings per
share
|
|
$
0.39
|
|
$
(0.09)
|
|
$
(0.21)
|
|
Diluted net earnings
per share
|
|
$
0.39
|
|
$
(0.09)
|
|
$
(0.21)
|
|
Basic weighted average
shares of common stock outstanding
|
|
77,432,283
|
|
77,400,000
|
|
59,000,000
|
|
Diluted weighted
average shares of common stock
outstanding
|
|
78,102,450
|
|
77,675,607
|
|
59,000,000
|
|
KODIAK GAS
SERVICES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands,
except share and per share data)
|
|
|
|
As of March
31,
2024
|
|
As of December
31,
2023
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
9,306
|
|
$
5,562
|
|
Accounts receivable,
net
|
|
143,237
|
|
113,192
|
|
Inventories,
net
|
|
82,906
|
|
76,238
|
|
Fair value of
derivative instruments
|
|
4,226
|
|
8,194
|
|
Contract
assets
|
|
18,330
|
|
17,424
|
|
Prepaid expenses and
other current assets
|
|
5,250
|
|
10,353
|
|
Total current
assets
|
|
263,255
|
|
230,963
|
|
Property, plant and
equipment, net
|
|
2,561,558
|
|
2,536,091
|
|
Operating lease
right-of-use assets, net
|
|
32,444
|
|
33,716
|
|
Goodwill
|
|
305,553
|
|
305,553
|
|
Identifiable intangible
assets, net
|
|
120,520
|
|
122,888
|
|
Fair value of
derivative instruments
|
|
32,465
|
|
14,256
|
|
Other assets
|
|
636
|
|
639
|
|
Total assets
|
|
$
3,316,431
|
|
$
3,244,106
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
60,721
|
|
$
49,842
|
|
Accrued
liabilities
|
|
108,851
|
|
97,078
|
|
Contract
liabilities
|
|
68,332
|
|
63,709
|
|
Total current
liabilities
|
|
237,904
|
|
210,629
|
|
Long-term debt, net of
unamortized debt issuance cost
|
|
1,828,259
|
|
1,791,460
|
|
Operating lease
liabilities
|
|
33,901
|
|
34,468
|
|
Deferred tax
liabilities
|
|
69,009
|
|
62,748
|
|
Other
liabilities
|
|
2,385
|
|
2,148
|
|
Total
liabilities
|
|
$
2,171,458
|
|
$
2,101,453
|
|
Commitments and
contingencies (Note 13)
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock, par
value $0.01 par value; $50,000,000 shares of preferred
stock
authorized, zero issued
as of March 31, 2024, and December 31, 2023,
respectively
|
|
—
|
|
—
|
|
Common stock, par value
$0.01 per share; $750,000,000 shares of common stock
authorized, $77,434,577
and $77,400,000 shares of common stock issued and
outstanding as of March
31, 2024, and December 31, 2023, respectively
|
|
774
|
|
774
|
|
Additional paid-in
capital
|
|
965,732
|
|
963,760
|
|
Retained
earnings
|
|
178,467
|
|
178,119
|
|
Total stockholders'
equity
|
|
1,144,973
|
|
1,142,653
|
|
Total liabilities and
stockholders' equity
|
|
$
3,316,431
|
|
$
3,244,106
|
|
KODIAK GAS
SERVICES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in
thousands)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
(loss)
|
$
30,232
|
|
$
(12,343)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by
operating
|
|
|
|
|
Depreciation and
amortization
|
46,944
|
|
44,897
|
|
Stock-based
compensation expense
|
2,848
|
|
879
|
|
Amortization of debt
issuance costs
|
2,643
|
|
5,445
|
|
Non-cash lease
expense
|
1,200
|
|
774
|
|
Provision for credit
losses
|
85
|
|
2
|
|
Inventory
reserve
|
126
|
|
125
|
|
Loss on sale of
property, plant and equipment
|
—
|
|
17
|
|
Change in fair value
of derivatives
|
(14,241)
|
|
17,934
|
|
Deferred tax provision
(benefit)
|
6,261
|
|
(2,521)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(30,130)
|
|
(20,935)
|
|
Inventories
|
(6,794)
|
|
(2,993)
|
|
Contract
assets
|
(906)
|
|
2,504
|
|
Prepaid expenses and
other current assets
|
5,103
|
|
(7,522)
|
|
Accounts
payable
|
(2,324)
|
|
(839)
|
|
Accrued and other
liabilities
|
5,872
|
|
(9,741)
|
|
Contract
liabilities
|
4,623
|
|
7,607
|
|
Net cash provided by
operating activities
|
51,542
|
|
23,290
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchase of property,
plant and equipment
|
(60,153)
|
|
(48,581)
|
|
Proceeds from sale of
property, plant and equipment
|
—
|
|
32
|
|
Other
|
3
|
|
(25)
|
|
Net cash used in
investing activities
|
(60,150)
|
|
(48,574)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings on debt
instruments
|
1,008,476
|
|
248,300
|
|
Payments on debt
instruments
|
(957,975)
|
|
(197,569)
|
|
Payment of debt
issuance cost
|
(7,594)
|
|
(31,878)
|
|
Offering
costs
|
(446)
|
|
—
|
|
Dividends paid to
stockholders
|
(29,815)
|
|
—
|
|
Cash paid for shares
withheld to cover taxes
|
(294)
|
|
—
|
|
Net cash provided by
financing activities
|
12,352
|
|
18,853
|
|
Net increase (decrease)
in cash and cash equivalents
|
3,744
|
|
(6,431)
|
|
Cash and cash
equivalents - beginning of period
|
5,562
|
|
20,431
|
|
Cash and cash
equivalents - end of period
|
$
9,306
|
|
$
14,000
|
|
Supplemental cash
disclosures:
|
|
|
|
|
Cash paid for
interest
|
$
32,023
|
|
$
67,419
|
|
Cash paid for
taxes
|
$
—
|
|
$
—
|
|
Supplemental
disclosure of non-cash investing activities:
|
|
|
|
|
(Increase) decrease in
accrued capital expenditures
|
$
(9,890)
|
|
$
7,962
|
|
Supplemental
disclosure of non-cash financing activities:
|
|
|
|
|
Dividends
equivalent
|
$
(237)
|
|
$
—
|
|
Accrued debt issuance
cost
|
$
(8,752)
|
|
$
—
|
|
KODIAK GAS
SERVICES, INC.
RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA
(in thousands,
excluding percentages; unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
|
Net income
(loss)
|
|
$
30,232
|
|
$
(6,874)
|
|
$
(12,343)
|
|
Interest expense,
net
|
|
39,740
|
|
40,484
|
|
68,662
|
|
Income tax expense
(benefit)
|
|
9,875
|
|
5,305
|
|
(3,990)
|
|
Depreciation and
amortization
|
|
46,944
|
|
46,455
|
|
44,897
|
|
(Gain) loss on
derivatives
|
|
(19,757)
|
|
21,814
|
|
7,995
|
|
Equity compensation
expense(1)
|
|
2,848
|
|
2,462
|
|
879
|
|
Transaction
expenses(2)
|
|
7,880
|
|
4,288
|
|
201
|
|
(Gain) loss on sale of
property, plant and equipment
|
|
—
|
|
(56)
|
|
17
|
|
Adjusted
EBITDA
|
|
$
117,762
|
|
$
113,878
|
|
$
106,318
|
|
Adjusted EBITDA
Percentage
|
|
54.6 %
|
|
50.4 %
|
|
55.9 %
|
|
|
|
(1)
|
For the three months
ended March 31, 2024, December 31, 2023, and March 31, 2023, there
were $2.8 million, $2.5 million and $0.9 million, respectively, of
non-cash adjustments for equity compensation expense.
|
|
(2)
|
Represents certain
costs associated with non-recurring professional services,
primarily related to the CSI acquisition for the three months ended
March 31, 2024, and other costs.
|
|
KODIAK GAS
SERVICES, INC.
RECONCILIATION OF
NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED
EBITDA
(in thousands;
unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
|
Net cash provided by
operating activities
|
|
$
51,542
|
|
$
62,627
|
|
$
23,290
|
|
Interest expense,
net
|
|
39,740
|
|
40,484
|
|
68,662
|
|
Income tax expense
(benefit)
|
|
9,875
|
|
5,305
|
|
(3,990)
|
|
Deferred tax
provision
|
|
(6,261)
|
|
(1,551)
|
|
2,521
|
|
Cash received on
derivatives
|
|
(5,516)
|
|
(7,525)
|
|
(9,939)
|
|
Transaction
expenses(1)
|
|
7,880
|
|
4,288
|
|
201
|
|
Other(2)
|
|
(4,054)
|
|
(8,808)
|
|
(6,346)
|
|
Change in operating
assets and liabilities
|
|
24,556
|
|
19,058
|
|
31,919
|
|
Adjusted
EBITDA
|
|
$
117,762
|
|
$
113,878
|
|
$
106,318
|
|
|
|
(1)
|
Represents certain
costs associated with non-recurring professional services,
primarily related to the CSI acquisition for the three months ended
March 31, 2024, and other costs.
|
|
(2)
|
Includes amortization
of debt issuance costs, non-cash lease expense, provision for
credit losses and inventory reserve.
|
|
KODIAK GAS
SERVICES, INC.
RECONCILIATION OF
ADJUSTED GROSS MARGIN TO GROSS MARGIN FOR COMPRESSION
OPERATIONS
(in thousands,
excluding percentages; unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
|
Total
revenues
|
|
$
193,399
|
|
$
189,616
|
|
$
177,697
|
|
Cost of sales
(excluding depreciation and amortization)
|
|
(65,882)
|
|
(63,835)
|
|
(62,770)
|
|
Depreciation and
amortization
|
|
(46,944)
|
|
(46,455)
|
|
(44,897)
|
|
Gross margin
|
|
$
80,573
|
|
$
79,326
|
|
$
70,030
|
|
Gross margin
percentage
|
|
41.7 %
|
|
41.8 %
|
|
39.4 %
|
|
Depreciation and
amortization
|
|
46,944
|
|
46,455
|
|
44,897
|
|
Adjusted Gross
Margin
|
|
$
127,517
|
|
$
125,781
|
|
$
114,927
|
|
Adjusted Gross Margin
Percentage(1)
|
|
65.9 %
|
|
66.3 %
|
|
64.7 %
|
|
|
(1) Calculated
using Adjusted Gross Margin for Compression Operations as a
percentage of total Compression Operations revenues.
|
|
KODIAK GAS
SERVICES, INC.
RECONCILIATION OF
ADJUSTED GROSS MARGIN TO GROSS MARGIN FOR OTHER
SERVICES
(in thousands,
excluding percentages; unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
|
Total
revenues
|
|
$
22,093
|
|
$
36,364
|
|
$
12,415
|
|
Cost of sales
(excluding depreciation and amortization)
|
|
(17,684)
|
|
(27,872)
|
|
(8,988)
|
|
Depreciation and
amortization
|
|
—
|
|
—
|
|
—
|
|
Gross margin
|
|
$
4,409
|
|
$
8,492
|
|
$
3,427
|
|
Gross margin
percentage
|
|
20.0 %
|
|
23.4 %
|
|
27.6 %
|
|
Depreciation and
amortization
|
|
—
|
|
—
|
|
—
|
|
Adjusted Gross
Margin
|
|
$
4,409
|
|
$
8,492
|
|
$
3,427
|
|
Adjusted Gross Margin
Percentage(1)
|
|
20.0 %
|
|
23.4 %
|
|
27.6 %
|
|
|
(1) Calculated
using Adjusted Gross Margin for Other Services as a percentage of
total Other Services revenues.
|
|
KODIAK GAS
SERVICES, INC.
RECONCILIATION OF
NET INCOME TO DISCRETIONARY CASH FLOW AND FREE CASH
FLOW
(in thousands;
unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
|
Net income
(loss)
|
|
$
30,232
|
|
$
(6,874)
|
|
$
(12,343)
|
|
Depreciation and
amortization
|
|
46,944
|
|
46,455
|
|
44,897
|
|
Change in fair value
of derivatives
|
|
(14,241)
|
|
29,339
|
|
17,934
|
|
Deferred tax
provision
|
|
6,261
|
|
1,551
|
|
(2,521)
|
|
Amortization of debt
issuance costs
|
|
2,643
|
|
2,296
|
|
5,445
|
|
Equity compensation
expense(1)
|
|
2,848
|
|
2,462
|
|
879
|
|
Transaction
expenses(2)
|
|
7,880
|
|
4,288
|
|
201
|
|
(Gain) loss on sale of
property, plant and equipment
|
|
—
|
|
(56)
|
|
17
|
|
Maintenance capital
expenditures
|
|
(10,642)
|
|
(8,934)
|
|
(4,803)
|
|
Discretionary Cash
Flow
|
|
$
71,925
|
|
$
70,527
|
|
$
49,706
|
|
Growth capital
expenditures(3)(4)
|
|
(59,401)
|
|
(60,472)
|
|
(35,816)
|
|
Proceeds from sale of
property, plant and equipment
|
|
—
|
|
394
|
|
32
|
|
Free Cash
Flow
|
|
$
12,524
|
|
$
10,449
|
|
$
13,922
|
|
|
|
(1)
|
For the three months
ended March 31, 2024, December 31, 2023, and March 31,
2023, there were $2.8 million, $2.5 million and
$0.9 million, respectively, of non-cash adjustments for equity
compensation expense.
|
|
(2)
|
Represents certain
costs associated with non-recurring professional services,
primarily related to the CSI acquisition for the three months ended
March 31, 2024, and other costs.
|
|
(3)
|
For the three months
ended March 31, 2024, December 31, 2023, and March 31,
2023, growth capital expenditures include a $9.9 million increase,
a $4.8 million decrease and an $8.0 million decrease in accrued
capital expenditures, respectively.
|
|
(4)
|
For the three months
ended March 31, 2024, December 31, 2023, and March 31,
2023, there were $5.8 million, $3.5 million and
$2.4 million of non-unit growth capital expenditures,
respectively.
|
|
KODIAK GAS
SERVICES, INC.
RECONCILIATION OF
NET CASH PROVIDED BY OPERATING ACTIVITIES TO DISCRETIONARY CASH
FLOW
AND FREE CASH
FLOW
(in thousands;
unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
|
Net cash provided by
operating activities
|
|
$
51,542
|
|
$
62,627
|
|
$
23,290
|
|
Maintenance capital
expenditures
|
|
(10,642)
|
|
(8,934)
|
|
(4,803)
|
|
Transaction
expenses(1)
|
|
7,880
|
|
4,288
|
|
201
|
|
Gain on sale of
property, plant and equipment
|
|
—
|
|
(56)
|
|
17
|
|
Change in operating
assets and liabilities
|
|
24,556
|
|
19,058
|
|
31,919
|
|
Other(2)
|
|
(1,411)
|
|
(6,456)
|
|
(918)
|
|
Discretionary Cash
Flow
|
|
$
71,925
|
|
$
70,527
|
|
$
49,706
|
|
Growth capital
expenditures(3)(4)
|
|
(59,401)
|
|
(60,472)
|
|
(35,816)
|
|
Proceeds from sale of
property, plant and equipment
|
|
—
|
|
394
|
|
32
|
|
Free Cash
Flow
|
|
$
12,524
|
|
$
10,449
|
|
$
13,922
|
|
|
|
(1)
|
Represents certain
costs associated with non-recurring professional services,
primarily related to the CSI acquisition for the three months ended
March 31, 2024, and other costs.
|
|
(2)
|
Includes amortization
of debt issuance costs, non-cash lease expense, provision for
credit losses and inventory reserve.
|
|
(3)
|
For the three months
ended March 31, 2024, December 31, 2023, and March 31,
2023, growth capital expenditures include a $9.9 million increase,
a $4.8 million decrease and an $8.0 million decrease in accrued
capital expenditures, respectively.
|
|
(4)
|
For the three months
ended March 31, 2024, December 31, 2023, and March 31,
2023, there were $5.8 million, $3.5 million and
$2.4 million of non-unit growth capital expenditures,
respectively.
|
View original
content:https://www.prnewswire.com/news-releases/kodiak-gas-services-announces-first-quarter-2024-results-including-record-adjusted-ebitda-increases-full-year-2024-guidance-302140355.html
SOURCE Kodiak Gas Services, Inc.