Archrock Reports First Quarter 2024 Results
Archrock, Inc. (NYSE: AROC) reported strong first quarter 2024 results with revenue at $268.5 million, net income of $40.5 million, and adjusted EBITDA of $131.0 million. The company raised its 2024 adjusted EBITDA guidance to $510-540 million. Archrock's long-term debt decreased to $1.6 billion, with a leverage ratio of 3.2x. The company declared a quarterly dividend of $0.165 per share and repurchased common shares during the quarter. Shareholders can expect a quarterly dividend payment on May 14, 2024.
Strong revenue growth in the first quarter 2024 reaching $268.5 million.
Net income for the first quarter 2024 increased to $40.5 million from $16.5 million in the same period last year.
Adjusted EBITDA rose to $131.0 million in the first quarter 2024, compared to $97.2 million in the first quarter 2023.
Archrock raised its 2024 adjusted EBITDA guidance to a range of $510-540 million.
Long-term debt reduced to $1.6 billion with a leverage ratio of 3.2x, an improvement from the previous year.
Net income for the first quarter 2024 included a non-cash long-lived and other asset impairment of $2.6 million.
Share repurchase program led to the expenditure of approximately $1.2 million during the quarter ended March 31, 2024.
The company's available liquidity was reported at $477.7 million, a figure investors may scrutinize in relation to long-term debt.
Insights
Archrock has exhibited a substantial upturn in its financial performance for Q1 2024, with a conspicuous rise in revenue from $229.8 million to $268.5 million year-over-year. This surge can be ascribed to both segments, contract operations and aftermarket services, but primarily the former. The company's strategic direction, focusing on high-return investments and returning value to shareholders, is evidenced by a dividend increase of 10% compared to the same quarter the previous year.
The leverage ratio's decline from 4.1x to 3.2x showcases improved financial stability and may be attractive to risk-averse investors. This is complemented by compelling growth in adjusted EBITDA, which has increased by almost 35%, hinting at strong operational efficiency. The upward revision of the full-year EBITDA guidance suggests positive future expectations from management, reflecting confidence in the company's earnings power.
From an investor's perspective, the share repurchase activity, alongside a prudent balance with dividend payments, illustrates a shareholder-friendly capital allocation policy. It is important to note that the share buyback was executed at favorable average prices, with the newly authorized repurchase capacity of $50 million signalling a continued commitment to enhancing shareholder value.
The reported growth in contract operations revenue by 19% and gross margin by 34% is particularly impressive and the 65% gross margin percentage is a testament to the company's effective cost management. The mention of strong oil prices and compression demand, especially from the Permian Basin, underscores the sector's recovery and resilience. The utilization rate holding steady at 95% echoes the strong demand for Archrock’s services.
Archrock's commentary on natural gas's potential to meet growing energy needs, especially for LNG exports and domestic power generation, aligns with broader industry trends focusing on cleaner energy alternatives. The company seems well-positioned to capitalize on these trends, indicating a positive outlook for investors with an interest in the energy sector, particularly natural gas.
Observing Archrock's increased EBITDA guidance and the optimistic tone of its management, we can infer that the company expects persistent demand for its services. However, investors should be aware of the cyclical nature of the energy sector, which can be impacted by volatile commodity prices and regulatory changes. Despite the positive outlook, it would be prudent to monitor external market factors such as oil and gas price fluctuations and energy policy shifts that could influence the company’s performance.
The focus on prudent capital discipline is a reassuring factor for investors. It suggests that the company is mindful of not overextending itself financially, which is important in an industry where capital expenditure can be intensive. This discipline may serve to protect the company's balance sheet against potential downturns in the energy market.
HOUSTON, April 30, 2024 (GLOBE NEWSWIRE) -- Archrock, Inc. (NYSE: AROC) (“Archrock”,” the “Company,” “we,” “us,” “our”) today reported results for the first quarter 2024.
First Quarter 2024 Highlights
- Revenue for the first quarter of 2024 was
$268.5 million compared to$229.8 million in the first quarter of 2023. - Net income for the first quarter of 2024 was
$40.5 million compared to$16.5 million in the first quarter of 2023. - Adjusted EBITDA (a non-GAAP measure defined below) for the first quarter of 2024 was
$131.0 million compared to$97.2 million in the first quarter of 2023. - Leverage ratio at the end of the first quarter of 2024 was 3.2x compared to 4.1x at the end of the first quarter of 2023.
- Declared a quarterly dividend of
$0.16 5 per common share for the first quarter of 2024,10% higher compared to the first quarter of 2023, resulting in dividend coverage of 3.2x. - Raised 2024 Adjusted EBITDA guidance to a range of
$510 million to$540 million from$500 million to$530 million .
Management Commentary and Outlook
“Momentum in Archrock’s earnings power is carrying into 2024, reflecting our excellent operating execution, high-quality asset base and innovative processes and technology,” said Brad Childers, Archrock’s President and Chief Executive Officer. “We continued to deliver meaningful growth in quarterly revenue, gross margin and adjusted EBITDA. In addition, strong cash flow is funding high-return investment in our fleet and increased return of capital to investors, while we also continue to maintain a sector-leading balance sheet and excellent financial flexibility.
“As we look to the balance of 2024, we expect to sustain historically high levels of utilization, pricing and profitability. Confidence in our business and the opportunity-rich market are enabling us to raise the midpoint of our Adjusted EBITDA guidance for the full year.
“Expanding on the favorable and durable macro environment, strong oil prices are driving sustainable compression demand in our key associated gas markets, led by the Permian Basin. In addition, Archrock as well as producers, midstreamers and others in the compression industry continue to demonstrate prudent capital discipline. Longer term, we believe natural gas has tremendous potential to meet growing energy needs, particularly for LNG exports and domestic power generation and we are excited to be a crucial part of the value chain to provide cleaner, affordable and reliable energy to the U.S. and the world,” concluded Childers.
First Quarter 2024 Financial Results
Archrock’s first quarter 2024 net income of
Adjusted EBITDA for the first quarter of 2024 and 2023 included
Contract Operations
For the first quarter of 2024, contract operations segment revenue totaled
2024, up
On a sequential basis, first quarter 2024 exit utilization was down slightly as we took delivery of new build units totaling 19,500 horsepower in March 2024 that were included in total available horsepower but not reflected in total operating horsepower as the units did not begin generating revenue until April 2024.
Aftermarket Services
For the first quarter of 2024, aftermarket services segment revenue totaled
Balance Sheet
Long-term debt was
Shareholder Returns
Quarterly Dividend
Our Board of Directors recently declared a quarterly dividend of
Share Repurchase Program
During the quarter ended March 31, 2024, Archrock repurchased 82,972 common shares at an average price of
The Board of Directors approved an extension of the Company’s share repurchase program (“Share Repurchase Program”) upon expiry of the previous authorization on April 27, 2024, for an additional 24-month period. In connection with the extension, the Board of Directors replenished the amount of shares authorized for repurchase under the Share Repurchase Program, resulting in available capacity of
2024 Annual Guidance
Archrock is providing updated annual guidance as listed below. All figures are in thousands, except percentages and ratios:
| Full Year 2024 Guidance | |||||||
| Low | High | ||||||
| Net income (1) | $ | 144,000 | $ | 174,000 | |||
| Adjusted EBITDA(2) | 510,000 | 540,000 | |||||
| Cash available for dividend(3)(4) | 300,000 | 320,000 | |||||
| Segment | |||||||
| Contract operations revenue | $ | 890,000 | $ | 915,000 | |||
| Contract operations gross margin percentage | 65 | % | 66 | % | |||
| Aftermarket services revenue | $ | 175,000 | $ | 185,000 | |||
| Aftermarket services gross margin percentage | 20 | % | 21 | % | |||
| Selling, general and administrative | $ | 124,000 | $ | 120,000 | |||
| Capital expenditures | |||||||
| Growth capital expenditures | $ | 190,000 | $ | 190,000 | |||
| Maintenance capital expenditures | 80,000 | 85,000 | |||||
| Other capital expenditures | 20,000 | 25,000 | |||||
(1) 2024 annual guidance for net income includes
(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
Summary Metrics
(in thousands, except percentages, per share amounts and ratios)
| Three Months Ended | ||||||||||
| March 31, | December 31, | March 31, | ||||||||
| 2024 | 2023 | 2023 | ||||||||
| Net income | $ | 40,532 | $ | 33,002 | $ | 16,485 | ||||
| Adjusted EBITDA | $ | 131,024 | $ | 120,263 | $ | 97,199 | ||||
| Contract operations revenue | $ | 223,051 | $ | 213,022 | $ | 187,745 | ||||
| Contract operations gross margin | $ | 145,308 | $ | 137,062 | $ | 108,263 | ||||
| Contract operations gross margin percentage | 65 | % | 64 | % | 58 | % | ||||
| Aftermarket services revenue | $ | 45,437 | $ | 46,571 | $ | 42,089 | ||||
| Aftermarket services gross margin | $ | 10,437 | $ | 10,239 | $ | 8,181 | ||||
| Aftermarket services gross margin percentage | 23 | % | 22 | % | 19 | % | ||||
| Selling, general, and administrative | $ | 31,665 | $ | 33,007 | $ | 26,425 | ||||
| Net cash provided by operating activities | $ | 137,702 | $ | 71,719 | $ | 87,856 | ||||
| Cash available for dividend | $ | 82,026 | $ | 71,484 | $ | 46,247 | ||||
| Cash available for dividend coverage | 3.2 | x | 2.8 | x | 2.0 | x | ||||
| Free cash flow | $ | 51,779 | $ | 47,385 | $ | 30,190 | ||||
| Free cash flow after dividend | $ | 25,779 | $ | 23,195 | $ | 6,338 | ||||
| Total available horsepower (at period end) | 3,780 | 3,759 | 3,729 | |||||||
| Total operating horsepower (at period end) | 3,593 | 3,607 | 3,504 | |||||||
| Horsepower utilization spot (at period end) | 95.0 | % | 96.0 | % | 94.0 | % | ||||
Conference Call Details
Archrock will host a conference call on Wednesday, May 1, 2024, to discuss first quarter 2024 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 (800) 715-9871 in the United States or 1 (646) 307-1963 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, unrealized change in fair value of investment in unconsolidated affiliate, restructuring charges, non-cash stock-based compensation expense, amortization of capitalized implementation costs and other items. A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, and a reconciliation of our full year 2024 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, unrealized change in fair value of investment in unconsolidated affiliate, restructuring charges, non-cash stock-based compensation expense, amortization of capitalized implementation costs 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 2024 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 a premier 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 Archrock 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; 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: risks related to pandemics and other public health crises; an increase in inflation; ongoing international conflicts and tensions; risks related to our operations; competitive pressures; inability to make acquisitions on economically acceptable terms; uncertainty to pay dividends in the future; risks related to a substantial amount of debt and our debt agreements; inability to access the capital and credit markets or borrow on affordable terms to obtain additional capital; inability to fund purchases of additional compression equipment; vulnerability to interest rate increases; uncertainty relating to the phasing out of London Interbank Offered Rate; erosion of the financial condition of our customers; risks related to the loss of our most significant customers; uncertainty of the renewals for our contract operations service agreements; risks related to losing management or operational personnel; dependence on particular suppliers and vulnerability to product shortages and price increases; information technology and cybersecurity risks; tax-related risks; legal and regulatory risks, including climate-related and environmental, social and governance risks.
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, 2023, Archrock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 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 Repine
VP of Investor Relations
281-836-8360
investor.relations@archrock.com
| Archrock, Inc. Unaudited Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | ||||||||||
| Revenue: | ||||||||||||
| Contract operations | $ | 223,051 | $ | 213,022 | $ | 187,745 | ||||||
| Aftermarket services | 45,437 | 46,571 | 42,089 | |||||||||
| Total revenue | 268,488 | 259,593 | 229,834 | |||||||||
| Cost of sales (excluding depreciation and amortization): | ||||||||||||
| Contract operations | 77,743 | 75,960 | 79,482 | |||||||||
| Aftermarket services | 35,000 | 36,332 | 33,908 | |||||||||
| Total cost of sales (excluding depreciation and amortization) | 112,743 | 112,292 | 113,390 | |||||||||
| Selling, general and administrative | 31,665 | 33,007 | 26,425 | |||||||||
| Depreciation and amortization | 42,835 | 42,695 | 40,181 | |||||||||
| Long-lived and other asset impairment | 2,568 | 3,658 | 2,569 | |||||||||
| Restructuring charges | — | 221 | 1,047 | |||||||||
| Interest expense | 27,334 | 27,938 | 26,581 | |||||||||
| Gain on sale of assets, net | (2,381 | ) | (2,181 | ) | (3,605 | ) | ||||||
| Other (income) expense, net | 139 | (745 | ) | 603 | ||||||||
| Income before income taxes | 53,585 | 42,708 | 22,643 | |||||||||
| Provision for income taxes | 13,053 | 9,706 | 6,158 | |||||||||
| Net income | $ | 40,532 | $ | 33,002 | $ | 16,485 | ||||||
| Basic and diluted net income per common share (1) | $ | 0.26 | $ | 0.21 | $ | 0.10 | ||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 154,187 | 153,876 | 154,116 | |||||||||
| Diluted | 154,501 | 154,177 | 154,281 | |||||||||
(1) Basic and diluted net income per common share is computed using the two-class method to determine the net income per share for each class of common stock and participating security (restricted stock and stock-settled restricted stock units that have non-forfeitable rights to receive dividends or dividend equivalents) according to dividends declared and participation rights in undistributed earnings. Accordingly, we have excluded net income attributable to participating securities from our calculation of basic and diluted net income per common share.
| Archrock, Inc. Unaudited Supplemental Information (in thousands, except percentages, per share amounts and ratios) | |||||||||||||
| Three Months Ended | |||||||||||||
| March 31, | December 31, | March 31, | |||||||||||
| 2024 | 2023 | 2023 | |||||||||||
| Revenue: | |||||||||||||
| Contract operations | $ | 223,051 | $ | 213,022 | $ | 187,745 | |||||||
| Aftermarket services | 45,437 | 46,571 | 42,089 | ||||||||||
| Total revenue | $ | 268,488 | $ | 259,593 | $ | 229,834 | |||||||
| Gross margin (1): | |||||||||||||
| Contract operations | $ | 145,308 | $ | 137,062 | $ | 108,263 | |||||||
| Aftermarket services | 10,437 | 10,239 | 8,181 | ||||||||||
| Total gross margin | $ | 155,745 | $ | 147,301 | $ | 116,444 | |||||||
| Gross margin percentage: | |||||||||||||
| Contract operations | 65 | % | 64 | % | 58 | % | |||||||
| Aftermarket services | 23 | % | 22 | % | 19 | % | |||||||
| Total gross margin percentage | 58 | % | 57 | % | 51 | % | |||||||
| Selling, general and administrative | $ | 31,665 | $ | 33,007 | $ | 26,425 | |||||||
| % of revenue | 12 | % | 13 | % | 11 | % | |||||||
| Adjusted EBITDA (1) | $ | 131,024 | $ | 120,263 | $ | 97,199 | |||||||
| % of revenue | 49 | % | 46 | % | 42 | % | |||||||
| Capital expenditures | $ | 99,755 | $ | 36,655 | $ | 84,392 | |||||||
| Proceeds from sale of property, plant and equipment and other assets | (13,844 | ) | (17,543 | ) | (28,726 | ) | |||||||
| Net capital expenditures | $ | 85,911 | $ | 19,112 | $ | 55,666 | |||||||
| Total available horsepower (at period end) (2) | 3,780 | 3,759 | 3,729 | ||||||||||
| Total operating horsepower (at period end) (3) | 3,593 | 3,607 | 3,504 | ||||||||||
| Average operating horsepower | 3,606 | 3,607 | 3,475 | ||||||||||
| Horsepower utilization: | |||||||||||||
| Spot (at period end) | 95.0 | % | 96.0 | % | 94.0 | % | |||||||
| Average | 95.6 | % | 95.7 | % | 93.3 | % | |||||||
| Dividend declared for the period per share | $ | 0.165 | $ | 0.165 | $ | 0.150 | |||||||
| Dividend declared for the period to all shareholders | $ | 25,978 | $ | 25,913 | $ | 23,504 | |||||||
| Cash available for dividend coverage (4) | 3.2 | x | 2.8 | x | 2.0 | x | |||||||
| Free cash flow (1) | $ | 51,779 | $ | 47,385 | $ | 30,190 | |||||||
| Free cash flow after dividend (1) | $ | 25,779 | $ | 23,195 | $ | 6,338 | |||||||
(1) Management believes gross margin, Adjusted EBITDA, free cash flow and free cash flow after dividend provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period-to-period comparisons.
(2) Defined as idle and operating horsepower and includes new compressor units completed by a third party manufacturer that have been delivered to us.
(3) Defined as horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue.
(4) Defined as cash available for dividend divided by dividends declared for the period.
| March 31, | December 31, | March 31, | |||||||
| 2024 | 2023 | 2023 | |||||||
| Balance Sheet | |||||||||
| Long-term debt (1) | $ | 1,566,566 | $ | 1,584,869 | $ | 1,547,274 | |||
| Total equity | 882,080 | 871,021 | 853,050 | ||||||
(1) Carrying values are shown net of unamortized premium and deferred financing costs.
| Archrock, Inc. Unaudited Supplemental Information Reconciliation of Net Income to Adjusted EBITDA and Gross Margin (in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | ||||||||||
| Net income | $ | 40,532 | $ | 33,002 | $ | 16,485 | ||||||
| Depreciation and amortization | 42,835 | 42,695 | 40,181 | |||||||||
| Long-lived and other asset impairment | 2,568 | 3,658 | 2,569 | |||||||||
| Unrealized change in fair value of investment in unconsolidated affiliate | — | (1,023 | ) | 254 | ||||||||
| Restructuring charges | — | 221 | 1,047 | |||||||||
| Interest expense | 27,334 | 27,938 | 26,581 | |||||||||
| Stock-based compensation expense | 3,964 | 3,283 | 3,327 | |||||||||
| Amortization of capitalized implementation costs | 738 | 783 | 597 | |||||||||
| Provision for income taxes | 13,053 | 9,706 | 6,158 | |||||||||
| Adjusted EBITDA (1) | 131,024 | 120,263 | 97,199 | |||||||||
| Selling, general and administrative | 31,665 | 33,007 | 26,425 | |||||||||
| Stock-based compensation expense | (3,964 | ) | (3,283 | ) | (3,327 | ) | ||||||
| Amortization of capitalized implementation costs | (738 | ) | (783 | ) | (597 | ) | ||||||
| Unrealized change in fair value of investment in unconsolidated affiliate | — | 1,023 | (254 | ) | ||||||||
| Gain on sale of assets, net | (2,381 | ) | (2,181 | ) | (3,605 | ) | ||||||
| Other (income) expense, net | 139 | (745 | ) | 603 | ||||||||
| Gross margin (1) | $ | 155,745 | $ | 147,301 | $ | 116,444 | ||||||
(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 Information Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend (in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | ||||||||||
| Net income | $ | 40,532 | $ | 33,002 | $ | 16,485 | ||||||
| Depreciation and amortization | 42,835 | 42,695 | 40,181 | |||||||||
| Long-lived and other asset impairment | 2,568 | 3,658 | 2,569 | |||||||||
| Unrealized change in fair value of investment in unconsolidated affiliate | — | (1,023 | ) | 254 | ||||||||
| Restructuring charges | — | 221 | 1,047 | |||||||||
| Interest expense | 27,334 | 27,938 | 26,581 | |||||||||
| Stock-based compensation expense | 3,964 | 3,283 | 3,327 | |||||||||
| Amortization of capitalized implementation costs | 738 | 783 | 597 | |||||||||
| Provision for income taxes | 13,053 | 9,706 | 6,158 | |||||||||
| Adjusted EBITDA (1) | 131,024 | 120,263 | 97,199 | |||||||||
| Less: Maintenance capital expenditures | (19,525 | ) | (18,156 | ) | (22,562 | ) | ||||||
| Less: Other capital expenditures | (2,920 | ) | (3,193 | ) | (2,578 | ) | ||||||
| Less: Cash tax (payment) refund | 89 | (120 | ) | (18 | ) | |||||||
| Less: Cash interest expense | (26,642 | ) | (27,310 | ) | (25,794 | ) | ||||||
| Cash available for dividend (2) | $ | 82,026 | $ | 71,484 | $ | 46,247 | ||||||
(1) Management believes Adjusted EBITDA provides useful information to investors because this non-GAAP measure, when viewed with our GAAP results and accompanying reconciliations, provides a more complete understanding of our performance than GAAP results alone. Management uses this non-GAAP measure as a supplemental measure to review current period operating performance, comparability measure and performance measure for period-to-period comparisons.
(2) Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends.
| Archrock, Inc. Unaudited Supplemental Information Reconciliation of Net Cash Flows Provided by Operating Activities to Cash Available for Dividend (in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | ||||||||||
| Net cash provided by operating activities | $ | 137,702 | $ | 71,719 | $ | 87,856 | ||||||
| Inventory write-downs | (199 | ) | (164 | ) | (216 | ) | ||||||
| Provision for (benefit from) credit losses | 75 | (458 | ) | 340 | ||||||||
| Gain on sale of assets, net | 2,381 | 2,181 | 3,605 | |||||||||
| Current income tax provision | 593 | 459 | 277 | |||||||||
| Cash tax (payment) refund | 89 | (120 | ) | (18 | ) | |||||||
| Amortization of operating lease ROU assets | (947 | ) | (831 | ) | (823 | ) | ||||||
| Amortization of contract costs | (5,768 | ) | (5,653 | ) | (5,090 | ) | ||||||
| Deferred revenue recognized in earnings | 2,859 | 5,421 | 4,476 | |||||||||
| Cash restructuring charges | — | 211 | 120 | |||||||||
| Changes in assets and liabilities | (32,314 | ) | 20,068 | (19,140 | ) | |||||||
| Maintenance capital expenditures | (19,525 | ) | (18,156 | ) | (22,562 | ) | ||||||
| Other capital expenditures | (2,920 | ) | (3,193 | ) | (2,578 | ) | ||||||
| Cash available for dividend (1) | $ | 82,026 | $ | 71,484 | $ | 46,247 | ||||||
(1) Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends.
| Archrock, Inc. Unaudited Supplemental Information Reconciliation of Net Cash Flows Provided By Operating Activities to Free Cash Flow and Free Cash Flow After Dividend (in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | ||||||||||
| Net cash provided by operating activities | $ | 137,702 | $ | 71,719 | $ | 87,856 | ||||||
| Net cash used in investing activities | (85,923 | ) | (24,334 | ) | (57,666 | ) | ||||||
| Free cash flow (1) | 51,779 | 47,385 | 30,190 | |||||||||
| Dividends paid to stockholders | (26,000 | ) | (24,190 | ) | (23,852 | ) | ||||||
| Free cash flow after dividend (1) | $ | 25,779 | $ | 23,195 | $ | 6,338 | ||||||
(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 Information Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend (in thousands) | ||||||||
| Annual Guidance Range | ||||||||
| 2024 | ||||||||
| Low | High | |||||||
| Net income (1) | $ | 144,000 | $ | 174,000 | ||||
| Interest expense | 110,000 | 110,000 | ||||||
| Provision for income taxes | 58,000 | 58,000 | ||||||
| Depreciation and amortization | 177,000 | 177,000 | ||||||
| Stock-based compensation expense | 14,000 | 14,000 | ||||||
| Long-lived and other asset impairment | 3,000 | 3,000 | ||||||
| Amortization of capitalized implementation costs | 4,000 | 4,000 | ||||||
| Adjusted EBITDA (2) | 510,000 | 540,000 | ||||||
| Less: Maintenance capital expenditures | (80,000 | ) | (85,000 | ) | ||||
| Less: Other capital expenditures | (20,000 | ) | (25,000 | ) | ||||
| Less: Cash tax expense | (2,000 | ) | (2,000 | ) | ||||
| Less: Cash interest expense | (108,000 | ) | (108,000 | ) | ||||
| Cash available for dividend (3)(4) | $ | 300,000 | $ | 320,000 | ||||
(1) 2024 annual guidance for net income includes
(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
FAQ
What was Archrock's revenue in the first quarter of 2024?
Archrock reported revenue of $268.5 million in the first quarter of 2024.
What was Archrock's net income in the first quarter of 2024?
Archrock's net income for the first quarter of 2024 was $40.5 million.
What was the adjusted EBITDA for Archrock in the first quarter of 2024?
Archrock's adjusted EBITDA for the first quarter of 2024 was $131.0 million.
What was Archrock's leverage ratio at the end of the first quarter of 2024?
Archrock's leverage ratio at the end of the first quarter of 2024 was 3.2x.
What was the quarterly dividend declared by Archrock for the first quarter of 2024?
Archrock declared a quarterly dividend of $0.165 per common share for the first quarter of 2024.
