Kodiak Gas Services Announces Third Quarter 2024 Financial Results Including Record Quarterly Adjusted EBITDA and Free Cash Flow
Kodiak Gas Services (NYSE: KGS) reported record Q3 2024 financial results, with Contract Services revenue of $284.3 million and record quarterly Adjusted EBITDA of $168.4 million. Despite posting a net loss of $6.2 million due to asset impairments and hedging losses, the company achieved record quarterly Free Cash Flow of $52.5 million. Fleet utilization improved to 96.4%. The company raised its full-year 2024 Adjusted EBITDA guidance to $600-610 million and provided a 2025 outlook of $675-725 million. During the quarter, Kodiak deployed 50,000 horsepower of new compression units while divesting 95,000 horsepower of small units.
Kodiak Gas Services (NYSE: KGS) ha riportato risultati finanziari record per il terzo trimestre del 2024, con un fatturato da Servizi Contrattuali di $284,3 milioni e un Adjusted EBITDA trimestrale record di $168,4 milioni. Nonostante una perdita netta di $6,2 milioni a causa di svalutazioni degli asset e perdite da coperture, l'azienda ha raggiunto un flusso di cassa libero trimestrale record di $52,5 milioni. Il tasso di utilizzo della flotta è migliorato al 96,4%. L'azienda ha alzato le previsioni di Adjusted EBITDA per l'intero anno 2024 a $600-610 milioni e ha fornito un'outlook per il 2025 di $675-725 milioni. Durante il trimestre, Kodiak ha dispiegato 50.000 cavalli vapore di nuove unità di compressione, mentre ha dismesso 95.000 cavalli vapore di unità più piccole.
Kodiak Gas Services (NYSE: KGS) informó resultados financieros récord para el tercer trimestre de 2024, con ingresos por Servicios de Contrato de $284,3 millones y un Adjusted EBITDA trimestral récord de $168,4 millones. A pesar de registrar una pérdida neta de $6,2 millones debido a deterioros de activos y pérdidas por cobertura, la empresa logró un flujo de caja libre trimestral récord de $52,5 millones. La utilización de la flota mejoró al 96,4%. La empresa elevó su guía de Adjusted EBITDA para todo el año 2024 a $600-610 millones y proporcionó una perspectiva para 2025 de $675-725 millones. Durante el trimestre, Kodiak desplegó 50,000 caballos de fuerza de nuevas unidades de compresión mientras desinvirtió 95,000 caballos de fuerza de unidades pequeñas.
코디악 가스 서비스 (NYSE: KGS)는 2024년 3분기 금융 실적이 기록적이라고 보고하며, 계약 서비스 수익이 2억 8430만 달러, 조정 EBITDA가 분기 기준으로 1억 6840만 달러에 달했습니다. 자산 손상과 헤징 손실로 인해 620만 달러의 순손실을 기록했음에도 불구하고, 회사는 분기 기준으로 기록적인 자유 현금 흐름 5250만 달러를 달성했습니다. 함대 활용도는 96.4%로 개선되었습니다. 회사는 2024년 전체 연도 조정 EBITDA 목표를 6억~6억 1000만 달러로 상향 조정했으며, 2025년 전망을 6억 7500만~7억 2500만 달러로 제시했습니다. 분기 동안 코디악은 5만 마력의 새로운 압축 유닛을 배치했으며, 9만 5000 마력의 소형 유닛을 매각했습니다.
Kodiak Gas Services (NYSE: KGS) a annoncé des résultats financiers records pour le troisième trimestre 2024, avec des revenus de Services Contractuels de 284,3 millions de dollars et un Adjusted EBITDA trimestriel record de 168,4 millions de dollars. Malgré une perte nette de 6,2 millions de dollars due à des dépréciations d'actifs et des pertes de couverture, l'entreprise a réalisé un flux de trésorerie disponible trimestriel record de 52,5 millions de dollars. Le taux de utilisation de la flotte a augmenté à 96,4 %. L'entreprise a relevé ses prévisions d'Adjusted EBITDA pour l'année 2024 à 600-610 millions de dollars et a fourni une perspective pour 2025 de 675-725 millions de dollars. Au cours du trimestre, Kodiak a déployé 50 000 chevaux-vapeur de nouvelles unités de compression tout en se séparant de 95 000 chevaux-vapeur d'unités plus petites.
Kodiak Gas Services (NYSE: KGS) meldete Rekordfinanzergebnisse für das dritte Quartal 2024 mit Umsätzen aus Vertragsdiensten von 284,3 Millionen USD und einem bereinigten EBITDA von 168,4 Millionen USD. Trotz eines Nettoverlusts von 6,2 Millionen USD aufgrund von Vermögensminderungen und Absicherungsschäden erzielte das Unternehmen einen rekordverdächtigen freien Cashflow von 52,5 Millionen USD im Quartal. Die Flottenauslastung verbesserte sich auf 96,4 %. Das Unternehmen hob die Prognose für das bereinigte EBITDA für das gesamte Jahr 2024 auf 600-610 Millionen USD an und gab einen Ausblick für 2025 von 675-725 Millionen USD. Im Laufe des Quartals setzte Kodiak neue Kompressionseinheiten mit einer Gesamtleistung von 50.000 PS ein und verkaufte 95.000 PS kleinerer Einheiten ab.
- Record quarterly Adjusted EBITDA of $168.4 million, up from $110.1 million in Q3 2023
- Record quarterly Free Cash Flow of $52.5 million
- Contract Services revenue increased 52% year-over-year to $284.3 million
- Fleet utilization improved to 96.4%, up 2.1% sequentially
- Raised 2024 Adjusted EBITDA guidance to $600-610 million
- Net loss of $6.2 million in Q3 2024 compared to net income of $21.8 million in Q3 2023
- $9.9 million long-lived asset impairment charge
- $10.4 million loss on asset sales
- $20.3 million non-cash mark-to-market loss on interest rate hedges
- Total debt outstanding of $2.6 billion as of September 30, 2024
Insights
Kodiak Gas Services delivered a strong Q3 2024 with notable financial achievements. The company posted record quarterly Adjusted EBITDA of
Key operational metrics show robust performance with Contract Services revenue up
The compression services market outlook appears highly favorable, evidenced by Kodiak's fully contracted new unit deliveries through 2025. The company's strategic shift toward large horsepower units and exit from Canada reflects industry trends favoring efficiency and concentrated operations. The
The debt position of
Third Quarter 2024 and Recent Highlights
-
Contract Services segment revenue and Adjusted Gross Margin Percentage(1) were
and$284.3 million 66.0% , respectively -
Net loss of
included a$6.2 million long-lived asset impairment, a$9.9 million loss on asset sales and a$10.4 million non-cash, mark-to-market loss on interest rate hedges$20.3 million -
Record quarterly Adjusted EBITDA of
$168.4 million -
Record quarterly Free Cash Flow(1) of
$52.5 million - Deployed 50,000 horsepower of new large horsepower compression units
-
Divested approximately 95,000 horsepower of small horsepower compression units both in the
U.S and internationally -
Fleet utilization ended the third quarter at
96.4% , a sequential increase of2.1% -
Repurchased one million shares for
$25 million -
Raised full-year 2024 Adjusted EBITDA guidance to a range of
to$600 , a$610 million increase to the low end of the range$10 million
2025 Early Outlook
-
Providing full-year 2025 Adjusted EBITDA early outlook range of
to$675 $725 million
"We delivered an outstanding third quarter with new quarterly records in revenue, adjusted EBITDA and free cash flow," stated Mickey McKee, Kodiak’s President and Chief Executive Officer. "I could not be more proud of the progress we have made improving margins through the realization of cost synergies, increased fleet utilization and favorable contract compression market pricing.
"During the quarter, we successfully completed the sale of over 2,000 small horsepower units and exited
(1) Adjusted EBITDA, Adjusted Gross Margin Percentage and Free Cash Flow are Non-GAAP Financial Measures. Definitions and reconciliations to the most comparable GAAP financial measure are included herein.
Third Quarter 2024 Financial Results
Net loss for the third quarter of 2024 was
Segment Information
Contract Services segment revenue was
Other Services segment revenue was
Long-Term Debt and Liquidity
Total debt outstanding was
Summary Financial Data (in thousands, except percentages) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Total revenues |
|
$ |
324,647 |
|
|
$ |
309,653 |
|
|
$ |
230,983 |
|
Net income (loss) |
|
$ |
(6,211 |
) |
|
$ |
6,713 |
|
|
$ |
21,766 |
|
Adjusted EBITDA (1) |
|
$ |
168,374 |
|
|
$ |
154,342 |
|
|
$ |
110,067 |
|
Adjusted EBITDA percentage (1) |
|
|
51.9 |
% |
|
|
49.8 |
% |
|
|
47.7 |
% |
|
|
|
|
|
|
|
||||||
Contract Services revenue |
|
$ |
284,313 |
|
|
$ |
276,250 |
|
|
$ |
186,673 |
|
Contract Services Adjusted Gross Margin (1) |
|
$ |
187,696 |
|
|
$ |
176,917 |
|
|
$ |
121,203 |
|
Contract Services Adjusted Gross Margin Percentage (1) |
|
|
66.0 |
% |
|
|
64.0 |
% |
|
|
64.9 |
% |
|
|
|
|
|
|
|
||||||
Other Services revenue |
|
$ |
40,334 |
|
|
$ |
33,403 |
|
|
$ |
44,310 |
|
Other Services Adjusted Gross Margin (1) |
|
$ |
7,660 |
|
|
$ |
5,467 |
|
|
$ |
5,490 |
|
Other Services Adjusted Gross Margin Percentage (1) |
|
|
19.0 |
% |
|
|
16.4 |
% |
|
|
12.4 |
% |
|
|
|
|
|
|
|
||||||
Maintenance capital expenditures |
|
$ |
21,553 |
|
|
$ |
19,147 |
|
|
$ |
12,312 |
|
Growth capital expenditures (2) |
|
$ |
65,115 |
|
|
$ |
90,390 |
|
|
$ |
55,671 |
|
|
|
|
|
|
|
|
||||||
Discretionary Cash Flow (1) |
|
$ |
103,049 |
|
|
$ |
90,617 |
|
|
$ |
63,044 |
|
Free Cash Flow (1) |
|
$ |
52,500 |
|
|
$ |
638 |
|
|
$ |
7,373 |
|
(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. |
(2) |
For the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, growth capital expenditures include a non-cash increase in the sales tax accrual on compression equipment purchases of |
Summary Operating Data (as of the dates indicated) |
|||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
|||
Fleet horsepower (1) |
|
4,417,687 |
|
|
4,481,900 |
|
|
3,213,096 |
|
Revenue-generating horsepower (2) |
|
4,259,843 |
|
|
4,224,839 |
|
|
3,210,076 |
|
Fleet compression units |
|
5,297 |
|
|
7,317 |
|
|
3,051 |
|
Revenue-generating compression units |
|
4,757 |
|
|
5,753 |
|
|
3,034 |
|
Revenue-generating horsepower per revenue-generating compression unit (3) |
|
895 |
|
|
734 |
|
|
1,058 |
|
Fleet utilization (4) |
|
96.4 |
% |
|
94.3 |
% |
|
99.9 |
% |
(1) |
Fleet horsepower includes owned horsepower excluding 46,313, 27,663 and 31,520 of non-marketable or obsolete horsepower as of September 30, 2024, June 30, 2024, and September 30, 2023, respectively. |
(2) |
Revenue-generating horsepower includes fleet horsepower that is (x) under contract, operating and generating revenue or (y) under contract or subject to a firm commitment with a customer and available to be deployed. |
(3) |
Calculated as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units at period end. |
(4) |
Fleet 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 that closed on April 1, 2024. Amounts below are in thousands except percentages.
|
|
Full-Year 2024 Guidance |
||||||
|
|
Low |
|
High |
||||
Adjusted EBITDA (1) |
|
$ |
600,000 |
|
|
$ |
610,000 |
|
Discretionary Cash Flow (1)(2) |
|
$ |
365,000 |
|
|
$ |
385,000 |
|
|
|
|
|
|
||||
Segment Information |
|
|
|
|
||||
Contract Services revenues |
|
$ |
1,020,000 |
|
|
$ |
1,040,000 |
|
Contract Services Adjusted Gross Margin Percentage (1) |
|
|
64 |
% |
|
|
66 |
% |
Other Services revenues |
|
$ |
125,000 |
|
|
$ |
135,000 |
|
Other Services Adjusted Gross Margin Percentage (1) |
|
|
14 |
% |
|
|
17 |
% |
|
|
|
|
|
||||
Capital Expenditures |
|
|
|
|
||||
Growth capital expenditures (3) |
|
$ |
210,000 |
|
|
$ |
230,000 |
|
Maintenance capital expenditures |
|
$ |
60,000 |
|
|
$ |
70,000 |
|
(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 guidance assumes no change to Secured Overnight Financing Rate futures. |
(3) |
Growth capital expenditures guidance excludes (i) approximately |
Conference Call
Kodiak will conduct a conference call on Thursday, November 7, 2024, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss financial and operating results for the quarter ended September 30, 2024. To listen to the call by phone, dial 877-407-4012 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
Kodiak is the largest contract compression services provider in
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 (gain) on derivatives; (ii) equity compensation expense; (iii) severance expenses; (iv) transaction expenses; and (v) loss (gain) on sale of assets. 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 (loss) 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) transaction expenses; and (y) 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 (loss) 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
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 Contract Services 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
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.
KODIAK GAS SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except share and per share data) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Revenues: |
|
|
|
|
|
|
||||||
Contract Services |
|
$ |
284,313 |
|
|
$ |
276,250 |
|
|
$ |
186,673 |
|
Other Services |
|
|
40,334 |
|
|
|
33,403 |
|
|
|
44,310 |
|
Total revenues |
|
|
324,647 |
|
|
|
309,653 |
|
|
|
230,983 |
|
Operating expenses: |
|
|
|
|
|
|
||||||
Cost of operations (exclusive of depreciation and amortization shown below) |
|
|
|
|
|
|
||||||
Contract Services |
|
|
96,617 |
|
|
|
99,333 |
|
|
|
65,470 |
|
Other Services |
|
|
32,674 |
|
|
|
27,936 |
|
|
|
38,820 |
|
Depreciation and amortization |
|
|
73,452 |
|
|
|
69,463 |
|
|
|
46,087 |
|
Long-lived asset impairment |
|
|
9,921 |
|
|
|
— |
|
|
|
— |
|
Selling, general and administrative |
|
|
35,528 |
|
|
|
59,927 |
|
|
|
19,648 |
|
(Gain) loss on sale of property, plant and equipment |
|
|
10,376 |
|
|
|
(1,173 |
) |
|
|
— |
|
Total operating expenses |
|
|
258,568 |
|
|
|
255,486 |
|
|
|
170,025 |
|
Income from operations |
|
|
66,079 |
|
|
|
54,167 |
|
|
|
60,958 |
|
Other income (expenses): |
|
|
|
|
|
|
||||||
Interest expense, net |
|
|
(53,991 |
) |
|
|
(52,133 |
) |
|
|
(39,710 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(6,757 |
) |
Gain (loss) on derivatives |
|
|
(20,327 |
) |
|
|
6,797 |
|
|
|
15,141 |
|
Other income (expense), net |
|
|
(156 |
) |
|
|
218 |
|
|
|
38 |
|
Total other expenses, net |
|
|
(74,474 |
) |
|
|
(45,118 |
) |
|
|
(31,288 |
) |
Income (loss) before income taxes |
|
|
(8,395 |
) |
|
|
9,049 |
|
|
|
29,670 |
|
Income tax expense (benefit) |
|
|
(2,184 |
) |
|
|
2,336 |
|
|
|
7,904 |
|
Net income (loss) |
|
|
(6,211 |
) |
|
|
6,713 |
|
|
|
21,766 |
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
(563 |
) |
|
|
485 |
|
|
|
— |
|
Net income (loss) attributable to common shareholders |
|
$ |
(5,648 |
) |
|
$ |
6,228 |
|
|
$ |
21,766 |
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per share attributable to common shareholders: |
|
|
|
|
|
|
||||||
Basic net earnings (loss) per share |
|
$ |
(0.07 |
) |
|
$ |
0.07 |
|
|
$ |
0.28 |
|
Diluted net earnings (loss) per share |
|
$ |
(0.07 |
) |
|
$ |
0.06 |
|
|
$ |
0.28 |
|
Basic weighted average shares of common stock outstanding |
|
|
84,292,083 |
|
|
|
84,202,352 |
|
|
|
76,731,868 |
|
Diluted weighted average shares of common stock outstanding |
|
|
84,292,083 |
|
|
|
90,669,239 |
|
|
|
76,899,483 |
|
KODIAK GAS SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data) |
|||||||
|
|
As of September 30, 2024 |
|
As of December 31, 2023 |
|||
Assets |
|
|
|
|
|||
Current assets: |
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
7,434 |
|
|
$ |
5,562 |
Accounts receivable, net |
|
|
280,436 |
|
|
|
113,192 |
Inventories, net |
|
|
118,085 |
|
|
|
76,238 |
Fair value of derivative instruments |
|
|
4,110 |
|
|
|
8,194 |
Contract assets |
|
|
13,491 |
|
|
|
17,424 |
Prepaid expenses and other current assets |
|
|
19,801 |
|
|
|
10,353 |
Total current assets |
|
|
443,357 |
|
|
|
230,963 |
Property, plant and equipment, net |
|
|
3,406,325 |
|
|
|
2,536,091 |
Operating lease right-of-use assets, net |
|
|
54,489 |
|
|
|
33,716 |
Finance lease right-of-use assets, net |
|
|
4,702 |
|
|
|
— |
Goodwill |
|
|
413,532 |
|
|
|
305,553 |
Identifiable intangible assets, net |
|
|
161,263 |
|
|
|
122,888 |
Fair value of derivative instruments |
|
|
5,121 |
|
|
|
14,256 |
Deferred tax assets |
|
|
17 |
|
|
|
— |
Other assets |
|
|
3,202 |
|
|
|
639 |
Total assets |
|
$ |
4,492,008 |
|
|
$ |
3,244,106 |
Liabilities and Stockholders’ Equity |
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|||
Accounts payable |
|
$ |
85,848 |
|
|
$ |
49,842 |
Accrued liabilities |
|
|
192,762 |
|
|
|
97,078 |
Contract liabilities |
|
|
70,178 |
|
|
|
63,709 |
Total current liabilities |
|
|
348,788 |
|
|
|
210,629 |
Long-term debt, net of unamortized debt issuance cost |
|
|
2,595,398 |
|
|
|
1,791,460 |
Operating lease liabilities |
|
|
50,491 |
|
|
|
34,468 |
Finance lease liabilities |
|
|
2,737 |
|
|
|
— |
Deferred tax liabilities |
|
|
94,231 |
|
|
|
62,748 |
Other liabilities |
|
|
3,971 |
|
|
|
2,148 |
Total liabilities |
|
$ |
3,095,616 |
|
|
$ |
2,101,453 |
Commitments and contingencies (Note 14) |
|
|
|
|
|||
Stockholders’ equity: |
|
|
|
|
|||
Preferred stock, par value |
|
|
56 |
|
|
|
— |
Common stock, par value |
|
|
845 |
|
|
|
774 |
Additional paid-in capital |
|
|
1,159,431 |
|
|
|
963,760 |
Treasury stock, at cost; 1,000,000 and zero shares as of September 30, 2024, and December 31, 2023, respectively |
|
|
(25,000 |
) |
|
|
— |
Noncontrolling interest |
|
|
149,846 |
|
|
|
— |
Retained earnings |
|
|
111,214 |
|
|
|
178,119 |
Total stockholders’ equity |
|
|
1,396,392 |
|
|
|
1,142,653 |
Total liabilities and stockholders’ equity |
|
$ |
4,492,008 |
|
|
$ |
3,244,106 |
KODIAK GAS SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
30,734 |
|
|
$ |
26,940 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
||||
Depreciation and amortization |
|
189,859 |
|
|
|
136,414 |
|
Long-lived asset impairment |
|
9,921 |
|
|
|
— |
|
Equity compensation expense |
|
12,064 |
|
|
|
3,452 |
|
Amortization of debt issuance costs |
|
8,079 |
|
|
|
11,260 |
|
Non-cash lease expense |
|
3,164 |
|
|
|
3,132 |
|
Provision for credit losses |
|
4,625 |
|
|
|
2,047 |
|
Inventory reserve |
|
476 |
|
|
|
375 |
|
(Gain) loss on sale of property, plant and equipment |
|
9,203 |
|
|
|
(721 |
) |
Change in fair value of derivatives |
|
13,219 |
|
|
|
13,551 |
|
Deferred tax provision |
|
4,821 |
|
|
|
6,312 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
4,359 |
|
Changes in operating assets and liabilities, exclusive of effects of business acquisition: |
|
|
|
||||
Accounts receivable |
|
(126,941 |
) |
|
|
(21,371 |
) |
Inventories |
|
(7,895 |
) |
|
|
1,174 |
|
Contract assets |
|
3,934 |
|
|
|
(6,053 |
) |
Prepaid expenses and other current assets |
|
(747 |
) |
|
|
(3,733 |
) |
Accounts payable |
|
40,204 |
|
|
|
3,257 |
|
Accrued and other liabilities |
|
9,593 |
|
|
|
8,497 |
|
Contract liabilities |
|
5,068 |
|
|
|
14,807 |
|
Other assets |
|
121 |
|
|
|
— |
|
Net cash provided by operating activities |
|
209,502 |
|
|
|
203,699 |
|
Cash flows from investing activities: |
|
|
|
||||
Net cash acquired in acquisition of CSI Compressco LP |
|
9,458 |
|
|
|
— |
|
Purchase of property, plant and equipment |
|
(263,719 |
) |
|
|
(145,573 |
) |
Proceeds from sale of property, plant and equipment |
|
14,977 |
|
|
|
1,055 |
|
Other |
|
(35 |
) |
|
|
(45 |
) |
Net cash used in investing activities |
|
(239,319 |
) |
|
|
(144,563 |
) |
Cash flows from financing activities: |
|
|
|
||||
Borrowings on debt instruments |
|
2,297,435 |
|
|
|
756,418 |
|
Payments on debt instruments |
|
(2,114,013 |
) |
|
|
(1,021,556 |
) |
Principal payments on other borrowings |
|
(3,721 |
) |
|
|
— |
|
Payment of debt issuance cost |
|
(16,346 |
) |
|
|
(32,759 |
) |
Principal payments on finance leases |
|
(870 |
) |
|
|
— |
|
Proceeds from initial public offering, net of underwriter discounts |
|
— |
|
|
|
277,840 |
|
Offering costs |
|
(1,162 |
) |
|
|
(9,247 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
(1,835 |
) |
Dividends paid to stockholders |
|
(97,506 |
) |
|
|
— |
|
Repurchase of common shares |
|
(25,000 |
) |
|
|
— |
|
Cash paid for shares withheld to cover taxes |
|
(2,665 |
) |
|
|
— |
|
Net effect on deferred taxes and taxes payable related to the vesting of restricted stock |
|
418 |
|
|
|
— |
|
Distribution to parent |
|
— |
|
|
|
(42,300 |
) |
Distributions to noncontrolling interest |
|
(4,881 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
31,689 |
|
|
|
(73,439 |
) |
Net increase (decrease) in cash and cash equivalents |
|
1,872 |
|
|
|
(14,303 |
) |
Cash and cash equivalents - beginning of period |
|
5,562 |
|
|
|
20,431 |
|
Cash and cash equivalents - end of period |
$ |
7,434 |
|
|
$ |
6,128 |
|
Supplemental cash disclosures: |
|
|
|
||||
Cash paid for interest |
$ |
106,463 |
|
|
$ |
173,006 |
|
Cash paid for taxes |
$ |
10,333 |
|
|
$ |
5,946 |
|
Supplemental disclosure of non-cash investing activities: |
|
|
|
||||
(Increase) decrease in accrued capital expenditures |
$ |
2,961 |
|
|
$ |
(6,498 |
) |
Supplemental disclosure of non-cash financing activities: |
|
|
|
||||
Dividends equivalent |
$ |
687 |
|
$ |
— |
|
|
Issuance of common shares in acquisition of CSI Compressco LP |
$ |
188,167 |
|
|
$ |
— |
|
Issuance of preferred shares and noncontrolling interest in acquisition of CSI Compressco LP |
$ |
154,118 |
|
|
$ |
— |
|
Non-cash debt novation |
$ |
— |
|
|
$ |
(689,829 |
) |
Non-cash loss on extinguishment of debt |
$ |
— |
|
|
$ |
(563 |
) |
Non-cash offering costs |
$ |
— |
|
|
$ |
(792 |
) |
KODIAK GAS SERVICES, INC. RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (in thousands, excluding percentages; unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Net income (loss) |
|
$ |
(6,211 |
) |
|
$ |
6,713 |
|
|
$ |
21,766 |
|
Interest expense, net |
|
|
53,991 |
|
|
|
52,133 |
|
|
|
39,710 |
|
Income tax (benefit) expense |
|
|
(2,184 |
) |
|
|
2,336 |
|
|
|
7,904 |
|
Depreciation and amortization |
|
|
73,452 |
|
|
|
69,463 |
|
|
|
46,087 |
|
Long-lived asset impairment |
|
|
9,921 |
|
|
|
— |
|
|
|
— |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
6,757 |
|
(Gain) loss on derivatives |
|
|
20,327 |
|
|
|
(6,797 |
) |
|
|
(15,141 |
) |
Equity compensation expense (1) |
|
|
3,905 |
|
|
|
5,311 |
|
|
|
2,544 |
|
Severance expense (2) |
|
|
2,243 |
|
|
|
8,969 |
|
|
|
— |
|
Transaction expenses (3) |
|
|
2,554 |
|
|
|
17,387 |
|
|
|
440 |
|
(Gain) loss on sale of property, plant and equipment |
|
|
10,376 |
|
|
|
(1,173 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
168,374 |
|
|
$ |
154,342 |
|
|
$ |
110,067 |
|
Adjusted EBITDA Percentage |
|
|
51.9 |
% |
|
|
49.8 |
% |
|
|
47.7 |
% |
(1) |
For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, there were |
(2) |
For the three months ended September 30, 2024 and June 30, 2024 there were |
(3) |
Represents certain costs associated with non-recurring professional services, primarily related to the CSI Acquisition for the three months ended September 30, 2024 and June 30, 2024. |
KODIAK GAS SERVICES, INC. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED EBITDA (in thousands; unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Net cash provided by operating activities |
|
$ |
36,878 |
|
|
$ |
121,082 |
|
|
$ |
85,731 |
|
Interest expense, net |
|
|
53,991 |
|
|
|
52,133 |
|
|
|
39,710 |
|
Income tax (benefit) expense |
|
|
(2,184 |
) |
|
|
2,336 |
|
|
|
7,904 |
|
Deferred tax provision |
|
|
2,283 |
|
|
|
(843 |
) |
|
|
(5,551 |
) |
Cash received on derivatives |
|
|
(7,185 |
) |
|
|
(6,745 |
) |
|
|
(7,163 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
2,398 |
|
Severance expense (1) |
|
|
2,243 |
|
|
|
8,969 |
|
|
|
— |
|
Transaction expenses (2) |
|
|
2,554 |
|
|
|
17,387 |
|
|
|
440 |
|
Other (3) |
|
|
(4,685 |
) |
|
|
(7,605 |
) |
|
|
(3,705 |
) |
Change in operating assets and liabilities |
|
|
84,479 |
|
|
|
(32,372 |
) |
|
|
(9,697 |
) |
Adjusted EBITDA |
|
$ |
168,374 |
|
|
$ |
154,342 |
|
|
$ |
110,067 |
|
(1) |
For the three months ended September 30, 2024 and June 30, 2024 there were |
(2) |
Represents certain costs associated with non-recurring professional services, primarily related to the CSI Acquisition for the three months ended September 30, 2024 and June 30, 2024. |
(3) |
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 CONTRACT SERVICES (in thousands, excluding percentages; unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Total revenues |
|
$ |
284,313 |
|
|
$ |
276,250 |
|
|
$ |
186,673 |
|
Cost of sales (excluding depreciation and amortization) |
|
|
(96,617 |
) |
|
|
(99,333 |
) |
|
|
(65,470 |
) |
Depreciation and amortization |
|
|
(73,452 |
) |
|
|
(69,463 |
) |
|
|
(46,087 |
) |
Gross margin |
|
$ |
114,244 |
|
|
$ |
107,454 |
|
|
$ |
75,116 |
|
Gross margin percentage |
|
|
40.2 |
% |
|
|
38.9 |
% |
|
|
40.2 |
% |
Depreciation and amortization |
|
|
73,452 |
|
|
|
69,463 |
|
|
|
46,087 |
|
Adjusted Gross Margin |
|
$ |
187,696 |
|
|
$ |
176,917 |
|
|
$ |
121,203 |
|
Adjusted Gross Margin Percentage (1) |
|
|
66.0 |
% |
|
|
64.0 |
% |
|
|
64.9 |
% |
(1) |
Calculated using Adjusted Gross Margin for Contract Services as a percentage of total Contract Services revenues. |
KODIAK GAS SERVICES, INC. RECONCILIATION OF ADJUSTED GROSS MARGIN TO GROSS MARGIN FOR OTHER SERVICES (in thousands, excluding percentages; unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Total revenues |
|
$ |
40,334 |
|
|
$ |
33,403 |
|
|
$ |
44,310 |
|
Cost of sales (excluding depreciation and amortization) |
|
|
(32,674 |
) |
|
|
(27,936 |
) |
|
|
(38,820 |
) |
Depreciation and amortization |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gross margin |
|
$ |
7,660 |
|
|
$ |
5,467 |
|
|
$ |
5,490 |
|
Gross margin percentage |
|
|
19.0 |
% |
|
|
16.4 |
% |
|
|
12.4 |
% |
Depreciation and amortization |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted Gross Margin |
|
$ |
7,660 |
|
|
$ |
5,467 |
|
|
$ |
5,490 |
|
Adjusted Gross Margin Percentage (1) |
|
|
19.0 |
% |
|
|
16.4 |
% |
|
|
12.4 |
% |
(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 (LOSS) TO DISCRETIONARY CASH FLOW AND FREE CASH FLOW (in thousands; unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Net income (loss) |
|
$ |
(6,211 |
) |
|
$ |
6,713 |
|
|
$ |
21,766 |
|
Depreciation and amortization |
|
|
73,452 |
|
|
|
69,463 |
|
|
|
46,087 |
|
Long-lived asset impairment |
|
|
9,921 |
|
|
|
— |
|
|
|
— |
|
Change in fair value of derivatives |
|
|
27,512 |
|
|
|
(52 |
) |
|
|
(7,978 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
6,757 |
|
Deferred tax provision |
|
|
(2,283 |
) |
|
|
843 |
|
|
|
5,551 |
|
Amortization of debt issuance costs |
|
|
3,133 |
|
|
|
2,303 |
|
|
|
189 |
|
Equity compensation expense (1) |
|
|
3,905 |
|
|
|
5,311 |
|
|
|
2,544 |
|
Severance expense (2) |
|
|
2,243 |
|
|
|
8,969 |
|
|
|
— |
|
Transaction expenses (3) |
|
|
2,554 |
|
|
|
17,387 |
|
|
|
440 |
|
(Gain) loss on sale of property, plant and equipment |
|
|
10,376 |
|
|
|
(1,173 |
) |
|
|
— |
|
Maintenance capital expenditures |
|
|
(21,553 |
) |
|
|
(19,147 |
) |
|
|
(12,312 |
) |
Discretionary Cash Flow |
|
$ |
103,049 |
|
|
$ |
90,617 |
|
|
$ |
63,044 |
|
Growth capital expenditures (4)(5)(6) |
|
|
(65,115 |
) |
|
|
(90,390 |
) |
|
|
(55,671 |
) |
Proceeds from sale of property, plant and equipment |
|
|
14,566 |
|
|
|
411 |
|
|
|
— |
|
Free Cash Flow |
|
$ |
52,500 |
|
|
$ |
638 |
|
|
$ |
7,373 |
|
(1) |
For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, there were |
(2) |
For the three months ended September 30, 2024 and June 30, 2024 there were |
(3) |
Represents certain costs associated with non-recurring professional services, primarily related to the CSI Acquisition for the three months ended September 30, 2024 and June 30, 2024, and other costs. |
(4) |
For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, growth capital expenditures include a |
(5) |
For the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, there were |
(6) |
For the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, growth capital expenditures include a non-cash increase in the sales tax accrual on compression equipment purchases of |
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 |
||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||||
Net cash provided by operating activities |
|
$ |
36,878 |
|
|
$ |
121,082 |
|
|
$ |
85,731 |
|
Maintenance capital expenditures |
|
|
(21,553 |
) |
|
|
(19,147 |
) |
|
|
(12,312 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
2,398 |
|
Severance expense (1) |
|
|
2,243 |
|
|
|
8,969 |
|
|
|
— |
|
Transaction expenses (2) |
|
|
2,554 |
|
|
|
17,387 |
|
|
|
440 |
|
(Gain) loss on sale of property, plant and equipment |
|
|
10,376 |
|
|
|
(1,173 |
) |
|
|
— |
|
Change in operating assets and liabilities |
|
|
84,479 |
|
|
|
(32,372 |
) |
|
|
(9,697 |
) |
Other (3) |
|
|
(11,928 |
) |
|
|
(4,129 |
) |
|
|
(3,516 |
) |
Discretionary Cash Flow |
|
$ |
103,049 |
|
|
$ |
90,617 |
|
|
$ |
63,044 |
|
Growth capital expenditures (4)(5)(6) |
|
|
(65,115 |
) |
|
|
(90,390 |
) |
|
|
(55,671 |
) |
Proceeds from sale of property, plant and equipment |
|
|
14,566 |
|
|
|
411 |
|
|
|
— |
|
Free Cash Flow |
|
$ |
52,500 |
|
|
$ |
638 |
|
|
$ |
7,373 |
|
(1) |
For the three months ended September 30, 2024 and June 30, 2024 there were |
(2) |
Represents certain costs associated with non-recurring professional services, primarily related to the CSI Acquisition for the three months ended September 30, 2024 and June 30, 2024, and other costs. |
(3) |
Includes non-cash lease expense, provision for credit losses and inventory reserve. |
(4) |
For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, growth capital expenditures include a |
(5) |
For the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, there were |
(6) |
For the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, growth capital expenditures include a non-cash increase in the sales tax accrual on compression equipment purchases of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106306941/en/
Investor Contact
Graham Sones, VP – Investor Relations
ir@kodiakgas.com
(936) 755-3529
Source: Kodiak Gas Services, Inc.
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