Archrock Reports Second Quarter 2024 Results
Archrock (NYSE: AROC) reported strong Q2 2024 results, with revenue increasing to $270.5 million from $247.5 million in Q2 2023. Net income rose to $34.4 million, up from $24.7 million year-over-year. Adjusted EBITDA reached $129.7 million, compared to $112.8 million in Q2 2023. The company maintained a high utilization rate of 95% and declared a quarterly dividend of $0.165 per share, a 6% increase from Q2 2023. Archrock also announced the acquisition of Total Operations and Production Services, (TOPS), expected to be immediately accretive to earnings. The company reaffirmed its 2024 Adjusted EBITDA guidance range of $510-$540 million and capital expenditures guidance of $290-$300 million, excluding the TOPS acquisition impact.
Archrock (NYSE: AROC) ha riportato risultati forti per il secondo trimestre del 2024, con un fatturato in aumento a 270,5 milioni di dollari rispetto ai 247,5 milioni di dollari nel secondo trimestre del 2023. L'utile netto è salito a 34,4 milioni di dollari, in crescita rispetto ai 24,7 milioni di dollari dell'anno precedente. L'EBITDA rettificato ha raggiunto 129,7 milioni di dollari, rispetto ai 112,8 milioni di dollari nel secondo trimestre del 2023. L'azienda ha mantenuto un elevato tasso di utilizzo del 95% e ha dichiarato un dividendo trimestrale di 0,165 dollari per azione, con un incremento del 6% rispetto al secondo trimestre del 2023. Archrock ha anche annunciato l'acquisizione di Total Operations and Production Services (TOPS), che si prevede contribuisca immediatamente agli utili. L'azienda ha confermato il suo intervallo di guida per l'EBITDA rettificato del 2024 di 510-540 milioni di dollari e la guida per le spese in conto capitale di 290-300 milioni di dollari, escludendo l'impatto dell'acquisizione di TOPS.
Archrock (NYSE: AROC) informó resultados sólidos para el segundo trimestre de 2024, con ingresos que aumentaron a 270.5 millones de dólares desde 247.5 millones de dólares en el segundo trimestre de 2023. El ingreso neto subió a 34.4 millones de dólares, frente a 24.7 millones de dólares año tras año. El EBITDA ajustado alcanzó 129.7 millones de dólares, en comparación con 112.8 millones de dólares en el segundo trimestre de 2023. La compañía mantuvo una alta tasa de utilización del 95% y declaró un dividendo trimestral de 0.165 dólares por acción, un aumento del 6% desde el segundo trimestre de 2023. Archrock también anunció la adquisición de Total Operations and Production Services (TOPS), que se espera que sea inmediatamente accretiva a las ganancias. La compañía reafirmó su rango de guía de EBITDA ajustado para 2024 de 510-540 millones de dólares y la guía de gastos de capital de 290-300 millones de dólares, excluyendo el impacto de la adquisición de TOPS.
Archrock (NYSE: AROC)는 2024년 2분기 강력한 실적을 발표했으며, 수익이 2023년 2분기 2억 4,750만 달러에서 2억 7,050만 달러로 증가했습니다. 순이익은 전년 대비 3,440만 달러로 증가했습니다. 조정 EBITDA는 2023년 2분기 1억 1,280만 달러에 비해 1억 2,970만 달러에 도달했습니다. 회사는 95%의 높은 가동률을 유지했고 2023년 2분기보다 6% 증가한 주당 0.165달러의 분기 배당금을 선언했습니다. Archrock는 또한 Total Operations and Production Services (TOPS) 인수를 발표했으며, 이는 즉시 수익에 기여할 것으로 예상됩니다. 회사는 TOPS 인수 효과를 제외한 2024년 조정 EBITDA 가이던스 범위를 5억 1000만 달러에서 5억 4000만 달러로, 자본 지출 가이드 범위를 2억 9000만 달러에서 3억 달러로 재확인했습니다.
Archrock (NYSE: AROC) a annoncé de solides résultats pour le deuxième trimestre 2024, avec des revenus augmentant à 270,5 millions de dollars contre 247,5 millions de dollars au deuxième trimestre 2023. Le bénéfice net a grimpé à 34,4 millions de dollars, en hausse par rapport aux 24,7 millions de dollars de l'année précédente. L'EBITDA ajusté a atteint 129,7 millions de dollars, contre 112,8 millions de dollars au deuxième trimestre 2023. L'entreprise a maintenu un taux d'utilisation élevé de 95 % et a déclaré un dividende trimestriel de 0,165 dollar par action, soit une augmentation de 6 % par rapport au deuxième trimestre 2023. Archrock a également annoncé l'acquisition de Total Operations and Production Services (TOPS), qui devrait contribuer immédiatement aux bénéfices. L'entreprise a confirmé son estimation de l'EBITDA ajusté pour 2024 dans une fourchette de 510 à 540 millions de dollars et une estimation des dépenses d'investissement de 290 à 300 millions de dollars, en excluant l'impact de l'acquisition de TOPS.
Archrock (NYSE: AROC) berichtete über starke Ergebnisse für das zweite Quartal 2024, wobei der Umsatz auf 270,5 Millionen Dollar von 247,5 Millionen Dollar im zweiten Quartal 2023 stieg. Der Nettogewinn erhöhte sich auf 34,4 Millionen Dollar, ein Anstieg von 24,7 Millionen Dollar im Vergleich zum Vorjahr. Das bereinigte EBITDA erreichte 129,7 Millionen Dollar, verglichen mit 112,8 Millionen Dollar im zweiten Quartal 2023. Das Unternehmen hielt eine hohe Auslastungsrate von 95% und erklärte eine vierteljährliche Dividende von 0,165 Dollar pro Aktie, was einem Anstieg von 6 % gegenüber dem zweiten Quartal 2023 entspricht. Archrock kündigte auch die Übernahme von Total Operations and Production Services (TOPS) an, die voraussichtlich sofort gewinnbringend sein wird. Das Unternehmen bestätigte den Ausblick für das bereinigte EBITDA für 2024 in der Spanne von 510-540 Millionen Dollar und den Ausblick für Investitionsausgaben von 290-300 Millionen Dollar, ohne die Auswirkungen der TOPS-Übernahme.
- Revenue increased by 9.3% year-over-year to $270.5 million in Q2 2024
- Net income grew by 39.3% to $34.4 million compared to Q2 2023
- Adjusted EBITDA rose by 15% to $129.7 million year-over-year
- Leverage ratio improved to 3.2x from 4.2x in Q2 2023
- Quarterly dividend increased by 6% compared to Q2 2023
- High utilization rate of 95% maintained
- Acquisition of TOPS expected to be immediately accretive to earnings
- Aftermarket services revenue decreased slightly to $45.1 million from $46.4 million in Q2 2023
- Aftermarket services adjusted gross margin percentage declined to 22% from 24% in Q2 2023
- Non-cash long-lived and other asset impairment of $4.4 million reported in Q2 2024
Insights
Archrock's Q2 2024 results demonstrate solid financial performance and operational strength in the natural gas compression sector. Revenue increased by
Particularly noteworthy is the improvement in Archrock's leverage ratio, which decreased from 4.2x to 3.2x year-over-year. This demonstrates the company's commitment to strengthening its balance sheet and enhancing financial flexibility. The
The contract operations segment, Archrock's core business, showed impressive growth with revenue up
While the aftermarket services segment saw a slight revenue decline, its impact on overall performance was minimal given its smaller contribution to total revenue. The company's guidance reaffirmation for 2024 Adjusted EBITDA (
The pending acquisition of TOPS, expected to be immediately accretive to earnings and cash available for dividend, could further bolster Archrock's market position, particularly in the strategic Permian Basin. However, investors should monitor the integration process and any potential impact on the company's leverage ratio post-acquisition.
Archrock's Q2 2024 results reflect the robust demand for natural gas compression services, particularly in oil-rich plays with associated gas production. The company's 95% utilization rate and growing operating horsepower underscore the strong market conditions in the sector.
The natural gas market dynamics appear highly favorable for Archrock. The abundance of affordable U.S. natural gas is driving growth in demand, use and production. This trend is further supported by two key factors:
- Expanding LNG export capacity
- Increasing electric generation demand from AI and data centers
These drivers suggest a sustained need for compression services in the foreseeable future, potentially leading to continued high utilization rates and pricing power for Archrock.
The acquisition of TOPS is strategically significant. It not only expands Archrock's presence in the important Permian Basin but also brings expertise in electric motor drive compression. This technology could be increasingly important as the industry focuses on reducing emissions and improving efficiency.
However, it's important to note the potential risks. The energy sector is known for its cyclicality and any significant downturn in oil and gas prices could impact demand for compression services. Additionally, the growing focus on renewable energy sources could pose long-term challenges to the natural gas industry.
Overall, Archrock's strong performance and strategic moves position it well to capitalize on the current favorable market conditions in the natural gas sector. The company's focus on high-quality assets, customer service and enabling technology should help maintain its competitive edge in this growing market.
HOUSTON, July 30, 2024 (GLOBE NEWSWIRE) -- Archrock, Inc. (NYSE: AROC) (“Archrock”) today reported results for the second quarter 2024.
Second Quarter 2024 and Recent Highlights
- Revenue for the second quarter of 2024 was
$270.5 million compared to$247.5 million in the second quarter of 2023. - Net income for the second quarter of 2024 was
$34.4 million compared to$24.7 million in the second quarter of 2023. - Adjusted EBITDA (a non-GAAP measure defined below) for the second quarter of 2024 was
$129.7 million compared to$112.8 million in the second quarter of 2023. - Leverage ratio at the end of the second quarter of 2024 was 3.2x compared to 4.2x at the end of the second quarter of 2023.
- Declared a quarterly dividend of
$0.16 5 per share of common stock for the second quarter of 2024,6% higher compared to the second quarter of 2023, supported by dividend coverage of 2.6x. - Announced acquisition of Total Operations and Production Services, LLC (“TOPS”).
- Reaffirming Archrock 2024 Adjusted EBITDA guidance range of
$510 million to$540 million , and 2024 total capital expenditures guidance range of$290 million to$300 million , excluding the impact of the acquisition of TOPS (the “Transaction”).
Management Commentary and Outlook
“Archrock’s second quarter performance reflects the earnings power from our investment in high-quality assets, exceptional customer service, efficient execution and implementation of enabling technology,” said Brad Childers, Archrock’s President and Chief Executive Officer. “We grew our operating horsepower and our fleet remained fully utilized, with utilization exiting the quarter at a rate of 95 percent. In addition, we again achieved record-setting average revenue per horsepower and both of our segments delivered outstanding margin performance.
“Market conditions for compression remain highly constructive, predominantly in oil plays with associated gas production like the Permian Basin. This strength and durability are being driven by the abundance of affordable U.S. natural gas that will support growth in its demand, use and production as well as the continued capital discipline being employed across the energy sector. We expect to see sustained compression booking demand well into the future as our customers plan for the call on natural gas production to support LNG export capacity growth and incremental electric generation demand from AI and data centers.
“In addition to our strong operational performance and organic opportunity set, we are excited about the pending acquisition of TOPS. In this transaction, we are acquiring highly utilized and contracted horsepower that is expected to be immediately accretive to earnings and cash available for dividend, at an attractive price. We are expanding our business with existing and new customers, further enhancing our position in the Permian Basin and adding a talented management team and personnel with leading expertise in electric motor drive compression. The transaction also supports our ability to achieve our stated financial objectives, including growing our shareholder returns and maintaining a leverage ratio of between 3.0 to 3.5 times. We continue to expect the transaction will close in the second half of 2024,” concluded Childers.
Second Quarter 2024 Financial Results
Archrock’s second quarter 2024 net income of
Adjusted EBITDA for the second quarter of 2024 and 2023 included
Contract Operations
For the second quarter of 2024, contract operations segment revenue totaled
Aftermarket Services
For the second 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
The Board of Directors approved an extension of Archrock’s 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
Updated 2024 Annual Guidance (Excluding Impact of TOPS Transaction)
Archrock is updating its standalone 2024 net income guidance range to between
Archrock is updating its standalone 2024 selling, general, and administrative expense guidance range to between
Archrock continues to expect standalone 2024 Adjusted EBITDA between
Archrock continues to expect
Summary Metrics
(in thousands, except percentages, per share amounts and ratios)
| Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Net income | $ | 34,425 | $ | 40,532 | $ | 24,653 | ||||||
| Adjusted EBITDA | $ | 129,712 | $ | 131,024 | $ | 112,775 | ||||||
| Contract operations revenue | $ | 225,468 | $ | 223,051 | $ | 201,120 | ||||||
| Contract operations adjusted gross margin | $ | 146,190 | $ | 145,308 | $ | 125,087 | ||||||
| Contract operations adjusted gross margin percentage | 65 | % | 65 | % | 62 | % | ||||||
| Aftermarket services revenue | $ | 45,058 | $ | 45,437 | $ | 46,423 | ||||||
| Aftermarket services adjusted gross margin | $ | 9,900 | $ | 10,437 | $ | 11,080 | ||||||
| Aftermarket services adjusted gross margin percentage | 22 | % | 23 | % | 24 | % | ||||||
| Selling, general, and administrative | $ | 31,163 | $ | 31,665 | $ | 28,649 | ||||||
| Net cash provided by operating activities | $ | 70,651 | $ | 137,702 | $ | 30,542 | ||||||
| Cash available for dividend | $ | 71,593 | $ | 82,026 | $ | 52,227 | ||||||
| Cash available for dividend coverage | 2.6 | x | 3.2 | x | 2.1 | x | ||||||
| Adjusted free cash flow | $ | (16,914 | ) | $ | 51,779 | $ | (62,738 | ) | ||||
| Adjusted free cash flow after dividend | $ | (42,733 | ) | $ | 25,779 | $ | (86,242 | ) | ||||
| Total available horsepower (at period end) | 3,806 | 3,780 | 3,770 | |||||||||
| Total operating horsepower (at period end) | 3,601 | 3,593 | 3,578 | |||||||||
| Horsepower utilization spot (at period end) | 95 | % | 95 | % | 95 | |||||||
Conference Call Details
Archrock will host a conference call on Wednesday, July 31, 2024, to discuss second quarter 2024 financial results. The call will begin at 10:00 a.m. Eastern Time.
To listen to the call via a live webcast, please visit Archrock’s website at www.archrock.com. The call will also be available by dialing 1 (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, transaction-related costs, 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.
Adjusted gross margin, a non–GAAP measure, is defined as revenue less cost of sales, exclusive of depreciation and amortization. Adjusted gross margin percentage, a non-GAAP measure, is defined as adjusted gross margin divided by revenue. A reconciliation of adjusted gross margin to net income, the most directly comparable GAAP measure, and a reconciliation of adjusted gross margin percentage to gross margin, appear 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, transaction-related 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.
Adjusted 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.
Adjusted 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 adjusted 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; statements regarding Archrock’s dividend policy; the anticipated completion of the Transaction and the timing thereof; the expected benefits of the Transaction, including its expected accretion and the expected impact on Archrock’s leverage ratio; and plans and objectives of management for future operations.
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: inability to consummate the Transaction; inability to achieve the expected benefits of the Transaction and difficulties in integrating TOPS; risks related to acquisitions, including the Transaction, that can reduce our ability to make distributions to our common stockholders; 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 June 30, 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:
| Archrock, Inc. |
| INVESTORS Megan Repine VP of Investor Relations 281-836-8360 investor.relations@archrock.com |
| MEDIA Andrew Siegel / Jed Repko Joele Frank 212-355-4449 |
Archrock, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
| Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Revenue: | ||||||||||||
| Contract operations | $ | 225,468 | $ | 223,051 | $ | 201,120 | ||||||
| Aftermarket services | 45,058 | 45,437 | 46,423 | |||||||||
| Total revenue | 270,526 | 268,488 | 247,543 | |||||||||
| Cost of sales, exclusive of depreciation and amortization | ||||||||||||
| Contract operations | 79,278 | 77,743 | 76,033 | |||||||||
| Aftermarket services | 35,158 | 35,000 | 35,343 | |||||||||
| Total cost of sales, exclusive of depreciation and amortization | 114,436 | 112,743 | 111,376 | |||||||||
| Selling, general and administrative | 31,163 | 31,665 | 28,649 | |||||||||
| Depreciation and amortization | 43,853 | 42,835 | 41,210 | |||||||||
| Long-lived and other asset impairment | 4,401 | 2,568 | 2,892 | |||||||||
| Restructuring charges | — | — | (85 | ) | ||||||||
| Interest expense | 27,859 | 27,334 | 28,630 | |||||||||
| Transaction-related costs | 1,782 | — | — | |||||||||
| Gain on sale of assets, net | (576 | ) | (2,381 | ) | (1,176 | ) | ||||||
| Other income, net | 128 | 139 | 1,463 | |||||||||
| Income before income taxes | 47,480 | 53,585 | 34,584 | |||||||||
| Provision for income taxes | 13,055 | 13,053 | 9,931 | |||||||||
| Net income | $ | 34,425 | $ | 40,532 | $ | 24,653 | ||||||
| Basic and diluted net income per common share (1) | $ | 0.22 | $ | 0.26 | $ | 0.16 | ||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 154,496 | 154,187 | 154,358 | |||||||||
| Diluted | 154,785 | 154,501 | 154,412 | |||||||||
| (1) | Basic and diluted net income per common share is computed using the two-class method to determine the net income per share for each class of common stock and participating security (restricted stock and stock-settled restricted stock units that have non-forfeitable rights to receive dividends or dividend equivalents) according to dividends declared and participation rights in undistributed earnings. Accordingly, we have excluded net income attributable to participating securities from our calculation of basic and diluted net income per common share. | |
Archrock, Inc.
Unaudited Supplemental Information
(in thousands, except percentages, per share amounts and ratios)
| Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Revenue: | ||||||||||||
| Contract operations | $ | 225,468 | $ | 223,051 | $ | 201,120 | ||||||
| Aftermarket services | 45,058 | 45,437 | 46,423 | |||||||||
| Total revenue | $ | 270,526 | $ | 268,488 | $ | 247,543 | ||||||
| Adjusted gross margin: | ||||||||||||
| Contract operations | $ | 146,190 | $ | 145,308 | $ | 125,087 | ||||||
| Aftermarket services | 9,900 | 10,437 | 11,080 | |||||||||
| Total adjusted gross margin (1) | $ | 156,090 | $ | 155,745 | $ | 136,167 | ||||||
| Adjusted gross margin percentage: | ||||||||||||
| Contract operations | 65 | % | 65 | % | 62 | % | ||||||
| Aftermarket services | 22 | % | 23 | % | 24 | % | ||||||
| Total adjusted gross margin percentage (1) | 58 | % | 58 | % | 55 | % | ||||||
| Selling, general and administrative | $ | 31,163 | $ | 31,665 | $ | 28,649 | ||||||
| % of revenue | 12 | % | 12 | % | 12 | % | ||||||
| Adjusted EBITDA (1) | $ | 129,712 | $ | 131,024 | $ | 112,775 | ||||||
| % of revenue | 48 | % | 49 | % | 46 | % | ||||||
| Capital expenditures | $ | 91,271 | $ | 99,755 | $ | 103,084 | ||||||
| Proceeds from sale of property, plant and equipment and other assets | (3,706 | ) | (13,844 | ) | (9,367 | ) | ||||||
| Net capital expenditures | $ | 87,565 | $ | 85,911 | $ | 93,717 | ||||||
| Total available horsepower (at period end) (2) | 3,806 | 3,780 | 3,770 | |||||||||
| Total operating horsepower (at period end) (3) | 3,601 | 3,593 | 3,578 | |||||||||
| Average operating horsepower | 3,607 | 3,606 | 3,549 | |||||||||
| Horsepower utilization: | ||||||||||||
| Spot (at period end) | 95 | % | 95 | % | 95 | % | ||||||
| Average | 95 | % | 96 | % | 95 | % | ||||||
| Dividend declared for the period per share | $ | 0.165 | $ | 0.165 | $ | 0.155 | ||||||
| Dividend declared for the period to all stockholders | $ | 27,977 | $ | 25,978 | $ | 24,353 | ||||||
| Cash available for dividend coverage (4) | 2.6 | x | 3.2 | x | 2.1 | x | ||||||
| Adjusted free cash flow (1) | $ | (16,914 | ) | $ | 51,779 | $ | (62,738 | ) | ||||
| Adjusted free cash flow after dividend (1) | $ | (42,733 | ) | $ | 25,779 | $ | (86,242 | ) | ||||
| (1) | Management believes adjusted gross margin, Adjusted EBITDA, adjusted free cash flow and adjusted free cash flow after dividend provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period-to-period comparisons. | |
| (2) | Defined as idle and operating horsepower and includes new compressor units completed by a third party manufacturer that have been delivered to us. | |
| (3) | Defined as horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue. | |
| (4) | Defined as cash available for dividend divided by dividends declared for the period. | |
| June 30, | March 31, | June 30, | |||||||
| 2024 | 2024 | 2023 | |||||||
| Balance Sheet | |||||||||
| Long-term debt (1) | $ | 1,608,956 | $ | 1,566,566 | $ | 1,639,239 | |||
| Total equity | 894,496 | 882,080 | 855,533 | ||||||
| (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 Adjusted Gross Margin
(in thousands)
| Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Net income | $ | 34,425 | $ | 40,532 | $ | 24,653 | ||||||
| Depreciation and amortization | 43,853 | 42,835 | 41,210 | |||||||||
| Long-lived and other asset impairment | 4,401 | 2,568 | 2,892 | |||||||||
| Unrealized change in fair value of investment in unconsolidated affiliate | — | — | 1,742 | |||||||||
| Restructuring charges | — | — | (85 | ) | ||||||||
| Interest expense | 27,859 | 27,334 | 28,630 | |||||||||
| Transaction-related costs | 1,782 | — | — | |||||||||
| Stock-based compensation expense | 3,513 | 3,964 | 3,197 | |||||||||
| Amortization of capitalized implementation costs | 824 | 738 | 605 | |||||||||
| Provision for income taxes | 13,055 | 13,053 | 9,931 | |||||||||
| Adjusted EBITDA (1) | 129,712 | 131,024 | 112,775 | |||||||||
| Selling, general and administrative | 31,163 | 31,665 | 28,649 | |||||||||
| Stock-based compensation expense | (3,513 | ) | (3,964 | ) | (3,197 | ) | ||||||
| Amortization of capitalized implementation costs | (824 | ) | (738 | ) | (605 | ) | ||||||
| Unrealized change in fair value of investment in unconsolidated affiliate | — | — | (1,742 | ) | ||||||||
| Gain on sale of assets, net | (576 | ) | (2,381 | ) | (1,176 | ) | ||||||
| Other income, net | 128 | 139 | 1,463 | |||||||||
| Adjusted gross margin (1) | $ | 156,090 | $ | 155,745 | $ | 136,167 | ||||||
| (1) | Management believes Adjusted EBITDA and adjusted 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 Total Revenue to Adjusted Gross Margin
(in thousands)
| Three Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | ||||||||||||||||
| Total revenues | $ | 270,526 | $ | 268,488 | $ | 247,543 | ||||||||||||
| Cost of sales, exclusive of depreciation and amortization | (114,436 | ) | (112,743 | ) | (111,376 | ) | ||||||||||||
| Depreciation and amortization | (43,853 | ) | (42,835 | ) | (41,210 | ) | ||||||||||||
| Gross margin | 112,237 | 112,910 | 94,957 | |||||||||||||||
| Depreciation and amortization | 43,853 | 42,835 | 41,210 | |||||||||||||||
| Adjusted gross margin (1) | $ | 156,090 | $ | 155,745 | $ | 136,167 | ||||||||||||
| (1) | Management believes adjusted gross margin 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 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 | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Net income | $ | 34,425 | $ | 40,532 | $ | 24,653 | ||||||
| Depreciation and amortization | 43,853 | 42,835 | 41,210 | |||||||||
| Long-lived and other asset impairment | 4,401 | 2,568 | 2,892 | |||||||||
| Unrealized change in fair value of investment in unconsolidated affiliate | — | — | 1,742 | |||||||||
| Restructuring charges | — | — | (85 | ) | ||||||||
| Interest expense | 27,859 | 27,334 | 28,630 | |||||||||
| Transaction-related costs | 1,782 | — | — | |||||||||
| Stock-based compensation expense | 3,513 | 3,964 | 3,197 | |||||||||
| Amortization of capitalized implementation costs | 824 | 738 | 605 | |||||||||
| Provision for income taxes | 13,055 | 13,053 | 9,931 | |||||||||
| Adjusted EBITDA (1) | 129,712 | 131,024 | 112,775 | |||||||||
| Less: Maintenance capital expenditures | (25,415 | ) | (19,525 | ) | (27,347 | ) | ||||||
| Less: Other capital expenditures | (3,445 | ) | (2,920 | ) | (5,129 | ) | ||||||
| Less: Cash tax (payment) refund | (2,028 | ) | 89 | (1,120 | ) | |||||||
| Less: Cash interest expense | (27,231 | ) | (26,642 | ) | (26,952 | ) | ||||||
| Cash available for dividend (2) | $ | 71,593 | $ | 82,026 | $ | 52,227 | ||||||
| (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 | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Net cash provided by operating activities | $ | 70,651 | $ | 137,702 | $ | 30,542 | ||||||
| Inventory write-downs | (318 | ) | (199 | ) | (143 | ) | ||||||
| Provision for (benefit from) credit losses | (80 | ) | 75 | (200 | ) | |||||||
| Gain on sale of assets, net | 576 | 2,381 | 1,176 | |||||||||
| Current income tax provision | 615 | 593 | 395 | |||||||||
| Cash tax (payment) refund | (2,028 | ) | 89 | (1,120 | ) | |||||||
| Amortization of operating lease ROU assets | (880 | ) | (947 | ) | (826 | ) | ||||||
| Amortization of contract costs | (5,957 | ) | (5,768 | ) | (5,160 | ) | ||||||
| Deferred revenue recognized in earnings | 2,747 | 2,859 | 4,278 | |||||||||
| Cash restructuring charges | — | — | 842 | |||||||||
| Transaction-related costs | 1,782 | — | — | |||||||||
| Changes in assets and liabilities | 33,345 | (32,314 | ) | 54,919 | ||||||||
| Maintenance capital expenditures | (25,415 | ) | (19,525 | ) | (27,347 | ) | ||||||
| Other capital expenditures | (3,445 | ) | (2,920 | ) | (5,129 | ) | ||||||
| Cash available for dividend (1) | $ | 71,593 | $ | 82,026 | $ | 52,227 | ||||||
| (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 Adjusted Free Cash Flow and Adjusted Free Cash Flow After Dividend
(in thousands)
| Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Net cash provided by operating activities | $ | 70,651 | $ | 137,702 | $ | 30,542 | ||||||
| Net cash used in investing activities | (87,565 | ) | (85,923 | ) | (93,280 | ) | ||||||
| Adjusted free cash flow (1) | (16,914 | ) | 51,779 | (62,738 | ) | |||||||
| Dividends paid to stockholders | (25,819 | ) | (26,000 | ) | (23,504 | ) | ||||||
| Adjusted free cash flow after dividend (1) | $ | (42,733 | ) | $ | 25,779 | $ | (86,242 | ) | ||||
| (1) | Management believes adjusted free cash flow and adjusted 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 Guidance
(in thousands)
| Annual Guidance Range | ||||||||
| 2024 | ||||||||
| Low | High | |||||||
| Net income (1) | $ | 138,700 | $ | 166,500 | ||||
| Interest expense | 111,000 | 111,000 | ||||||
| Provision for income taxes | 57,500 | 57,500 | ||||||
| Depreciation and amortization | 176,000 | 176,000 | ||||||
| Stock-based compensation expense | 14,000 | 14,000 | ||||||
| Long-lived and other asset impairment | 7,000 | 7,000 | ||||||
| Transaction-related costs (2) | 1,800 | 4,000 | ||||||
| Amortization of capitalized implementation costs | 4,000 | 4,000 | ||||||
| Adjusted EBITDA (3) | 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 (4)(5) | $ | 300,000 | $ | 320,000 | ||||
| (1) | 2024 annual guidance for net income includes | |
| (2) | Reflects estimate of expenses incurred to date related to the Transaction and excludes additional costs to be incurred after close. | |
| (3) | 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. | |
| (4) | Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends. | |
| (5) | 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
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