Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | May 04, 2020 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Cypress Environmental Partners, L.P. | |
Entity Central Index Key | 0001587246 | |
Document Type | 10-Q/A | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | true | |
Amendment Description | Cypress Environmental Partners, L.P. (the “Partnership”) is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment”) to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, originally filed with the Securities and Exchange Commission (the “SEC”) on May 11, 2020 (the “Original Report”), to make certain immaterial changes and correct certain omissions in the Original Report, which was erroneously filed by the Partnership’s financial printer. This Amendment amends and restates the Original Report in its entirety. | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36260 | |
Entity Incorporation, State or Country Code | DE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,209,281 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 42,258 | $ 15,700 |
Trade accounts receivable, net | 44,826 | 52,524 |
Prepaid expenses and other | 1,602 | 988 |
Total current assets | 88,686 | 69,212 |
Property and equipment: | ||
Property and equipment, at cost | 26,694 | 26,499 |
Less: Accumulated depreciation | 14,408 | 13,738 |
Total property and equipment, net | 12,286 | 12,761 |
Intangible assets, net | 19,389 | 20,063 |
Goodwill | 50,238 | 50,356 |
Finance lease right-of-use assets, net | 818 | 600 |
Operating lease right-of-use assets | 2,814 | 2,942 |
Debt issuance costs, net | 677 | 803 |
Other assets | 650 | 605 |
Total assets | 175,558 | 157,342 |
Current liabilities: | ||
Accounts payable | 2,276 | 3,529 |
Accounts payable - affiliates | 418 | 1,167 |
Accrued payroll and other | 11,733 | 14,850 |
Income taxes payable | 1,313 | 1,092 |
Finance lease obligations | 249 | 183 |
Operating lease obligations | 522 | 459 |
Total current liabilities | 16,511 | 21,280 |
Long-term debt | 101,929 | 74,929 |
Finance lease obligations | 484 | 359 |
Operating lease obligations | 2,276 | 2,425 |
Other noncurrent liabilities | 163 | 158 |
Total liabilities | 121,363 | 99,151 |
Partners' capital: | ||
Common units (12,202 and 12,068 units outstanding at March 31, 2020 and December 31, 2019, respectively) | 33,104 | 37,334 |
Preferred units (5,769 units outstanding at March 31, 2020 and December 31, 2019) | 44,291 | 44,291 |
General partner | (25,876) | (25,876) |
Accumulated other comprehensive loss | (2,229) | (2,577) |
Total partners' capital | 49,290 | 53,172 |
Noncontrolling interests | 4,905 | 5,019 |
Total owners' equity | 54,195 | 58,191 |
Total liabilities and owners' equity | $ 175,558 | $ 157,342 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common units outstanding (in shares) | 12,202 | 12,068 |
Preferred units outstanding (in shares) | 5,769 | 5,769 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 68,483 | $ 90,376 |
Costs of services | 60,528 | 80,353 |
Gross margin | 7,955 | 10,023 |
Operating costs and expense: | ||
General and administrative | 5,940 | 6,231 |
Depreciation, amortization and accretion | 1,208 | 1,104 |
Gain on asset disposals, net | (12) | (21) |
Operating income | 819 | 2,709 |
Other (expense) income: | ||
Interest expense, net | (1,124) | (1,311) |
Foreign currency (losses) gains | (457) | 101 |
Other, net | 105 | 88 |
Net (loss) income before income tax expense | (657) | 1,587 |
Income tax expense | 220 | 206 |
Net (loss) income | (877) | 1,381 |
Net loss attributable to noncontrolling interests | (88) | (219) |
Net (loss) income attributable to limited partners | (789) | 1,600 |
Net income attributable to preferred unitholder | 1,033 | 1,033 |
Net (loss) income attributable to common unitholders | $ (1,822) | $ 567 |
Net (loss) income per common limited partner unit: | ||
Basic and diluted (in dollars per share) | $ (0.15) | $ 0.05 |
Weighted average common units outstanding: | ||
Basic (in units) | 12,096 | 11,971 |
Diluted (in units) | 12,096 | 12,355 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (877) | $ 1,381 |
Other comprehensive income (loss) - foreign currency translation | 348 | (72) |
Comprehensive (loss) income | (529) | 1,309 |
Comprehensive loss attributable to noncontrolling interests | (88) | (219) |
Comprehensive income attributable to preferred unitholder | 1,033 | 1,033 |
Comprehensive (loss) income attributable to common unitholders | $ (1,474) | $ 495 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Owners' Equity (Unaudited) - USD ($) $ in Thousands | Common Units [Member] | Preferred Units [Member] | Accumulated Other Comprehensive Gain (Loss) [Member] | Noncontrolling Interests [Member] | General Partner [Member] | Total |
Owners' equity, beginning at Dec. 31, 2018 | $ 34,677 | $ 44,291 | $ (2,414) | $ 3,609 | $ (25,876) | $ 54,287 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 567 | 1,033 | (219) | 1,381 | ||
Foreign currency translation adjustment | (72) | (72) | ||||
Distributions | (2,510) | (1,033) | (3,543) | |||
Equity-based compensation | 269 | 269 | ||||
Taxes paid related to net share settlement of equity-based compensation | (158) | (158) | ||||
Owners' equity, ending at Mar. 31, 2019 | 32,845 | 44,291 | (2,486) | 3,390 | (25,876) | 52,164 |
Owners' equity, beginning at Dec. 31, 2019 | 37,334 | 44,291 | (2,577) | 5,019 | (25,876) | 58,191 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (1,822) | 1,033 | (88) | (877) | ||
Foreign currency translation adjustment | 348 | 348 | ||||
Distributions | (2,534) | (1,033) | (26) | (3,593) | ||
Equity-based compensation | 264 | 264 | ||||
Taxes paid related to net share settlement of equity-based compensation | (138) | (138) | ||||
Owners' equity, ending at Mar. 31, 2020 | $ 33,104 | $ 44,291 | $ (2,229) | $ 4,905 | $ (25,876) | $ 54,195 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net (loss) income | $ (877) | $ 1,381 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization and accretion | 1,480 | 1,376 |
Gain on asset disposals, net | (12) | (21) |
Interest expense from debt issuance cost amortization | 144 | 130 |
Equity-based compensation expense | 264 | 269 |
Equity in earnings of investee | (42) | (29) |
Foreign currency losses (gains) | 457 | (101) |
Changes in assets and liabilities: | ||
Trade accounts receivable | 7,698 | (21,935) |
Prepaid expenses and other | (577) | 6 |
Accounts payable and accounts payable - affiliates | (1,197) | 1,905 |
Accrued payroll and other | (3,154) | 4,562 |
Income taxes payable | 221 | 207 |
Net cash provided by (used in) operating activities | 4,405 | (12,250) |
Investing activities: | ||
Proceeds from fixed asset disposals | 26 | 21 |
Purchase of property and equipment, excluding finance leases | (1,055) | (372) |
Net cash used in investing activities | (1,029) | (351) |
Financing activities: | ||
Borrowings on credit facility | 32,000 | 7,000 |
Payments on credit facility | (5,000) | |
Other | (19) | |
Payments on finance lease obligations | (61) | (13) |
Taxes paid related to net share settlement of equity-based compensation | (138) | (158) |
Distributions | (3,593) | (3,543) |
Net cash provided by financing activities | 23,189 | 3,286 |
Effect of exchange rates on cash | (7) | 104 |
Net increase (decrease) in cash and cash equivalents | 26,558 | (9,211) |
Cash and cash equivalents, beginning of period (includes restricted cash equivalents of $551 at December 31, 2019 and December 31, 2018) | 16,251 | 15,931 |
Cash and cash equivalents, end of period (includes restricted cash equivalents of $551 at March 31, 2020 and March 31, 2019) | 42,809 | 6,720 |
Non-cash items: | ||
Accounts payable and accrued payroll and other excluded from capital expenditures | 366 | 388 |
Acquisitions of finance leases included in liabilities | $ 247 | $ 293 |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Cash Flows [Abstract] | ||||
Restricted cash equivalents | $ 551 | $ 551 | $ 551 | $ 551 |
Organization and Operations
Organization and Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | 1. Organization and Operations Cypress Environmental Partners, L.P. (“we”, “us”, “our”, or the “Partnership”) is a Delaware limited partnership formed in 2013. We offer essential services that help protect the environment and ensure sustainability. We provide a wide range of environmental services including independent inspection, integrity, and support services for pipeline and energy infrastructure owners and operators and public utilities. We also provide water pipelines, hydrocarbon recovery, disposal, and water treatment services. Trading of our common units began January 15, 2014 on the New York Stock Exchange under the symbol “CELP”. Our business is organized into the Pipeline Inspection Services (“Pipeline Inspection”), Pipeline & Process Services (“Pipeline & Process Services”), and Water and Environmental Services (“Environmental Services”) segments. The Pipeline Inspection segment generates revenue by providing essential environmental services including inspection and integrity services on a variety of infrastructure assets including midstream pipelines, gathering systems, and distribution systems. Services include nondestructive examination, in-line inspection support, pig tracking, survey, data gathering, and supervision of third-party contractors. Our results in this segment are driven primarily by the number of inspectors that perform services for our customers and the fees that we charge for those services, which depend on the type, skills, technology, equipment, and number of inspectors used on a particular project, the nature of the project, and the duration of the project. The number of inspectors engaged on projects is driven by the type of project, prevailing market rates, the age and condition of customers’ assets including pipelines, gas plants, compression stations, storage facilities, and gathering and distribution systems including the legal and regulatory requirements relating to the inspection and maintenance of those assets. We also bill our customers for per diem charges, mileage, and other reimbursement items. Revenue and costs in this segment may be subject to seasonal variations and interim activity may not be indicative of yearly activity considering that many of our customers develop yearly operating budgets and enter into contracts with us during the winter season for work to be performed during the remainder of the year. Additionally, inspection work throughout the United States during the winter months (especially in the northern states) may be hampered or delayed due to inclement weather. The Pipeline & Process Services segment generates revenue primarily by providing essential environmental services including hydrostatic testing services and chemical cleaning to energy companies and pipeline construction companies of newly-constructed and existing pipelines and related infrastructure. We generally charge our customers in this segment on a fixed-bid basis, depending on the size and length of the pipeline being tested, the complexity of services provided, and the utilization of our work force and equipment. Our results in this segment are driven primarily by the number of field personnel that perform services for our customers and the fees that we charge for those services, which depend on the type and number of field personnel used on a particular project, the type of equipment used and the fees charged for the utilization of that equipment, and the nature and duration of the project. Revenue and costs in this segment may be subject to seasonal variations and interim activity may not be indicative of yearly activity, considering that many of our customers develop yearly operating budgets and enter into contracts with us for work to be performed during the remainder of the year. Additionally, field work during the winter months may be hampered or delayed due to inclement weather. The Environmental Services segment owns and operates nine (9) water treatment facilities with ten (10) EPA Class II injection wells in the Bakken shale region of the Williston Basin in North Dakota. We wholly-own eight of these facilities and own a 25% interest in the remaining facility. These water treatment facilities are connected to twelve (12) pipeline gathering systems, including two (2) that we developed and own. We specialize in the treatment, recovery, separation, and disposal of waste byproducts generated during the lifecycle of an oil and natural gas well to protect the environment and our drinking water. All of the water treatment facilities utilize specialized equipment and remote monitoring to minimize the facilities’ downtime and increase the facilities’ efficiency for peak utilization. Revenue is generated on a fixed-fee per barrel basis for receiving, separating, filtering, recovering, processing, and injecting produced and flowback water. We also sell recovered oil, receive fees for pipeline transportation of water, and receive fees from a partially owned water treatment facility for management and staffing services (see Note 6). The volumes of water processed at our water treatment facilities are driven by water volumes generated from existing oil and natural gas wells during their useful lives and development drilling. Producers’ willingness to engage in new drilling is determined by a number of factors, the most important of which are the current and projected prices of oil, natural gas, and natural gas liquids; the cost to drill and operate a well; the availability and cost of capital; and environmental and governmental regulations. We generally expect the level of drilling to correlate with long-term trends in prices of oil, natural gas, and natural gas liquids. We also generate revenues from the sale of residual oil recovered during the water treatment process. Our ability to recover residual oil is dependent upon the residual oil content in the saltwater we treat, which is, among other things, a function of water type, chemistry, source, and temperature. Generally, where outside temperatures are lower, there is less residual oil content and separation is more difficult. Thus, our residual oil recovery during the winter is usually lower than our recovery during the summer. Additionally, residual oil content can decrease based on the following factors, among others: an increase in pipeline water as operators control the flow of pipeline water and an increase in residual oil recovered in saltwater by producers prior to delivering the saltwater to us for treatment. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The Unaudited Condensed Consolidated Financial Statements as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 include our accounts and those of our controlled subsidiaries. Investments over which we exercise significant influence, but do not control, are accounted for using the equity method of accounting. All intercompany transactions and account balances have been eliminated in consolidation. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2019 is derived from our audited financial statements. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Unaudited Condensed Consolidated Financial Statements include all adjustments considered necessary for a fair presentation of the consolidated financial position and consolidated results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the Unaudited Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for complete consolidated financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim Unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2019 included in our Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year. Use of Estimates in the Preparation of Financial Statements The preparation of our Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. The COVID - Significant Accounting Policies Our significant accounting policies are consistent with those disclosed in Note 2 to our audited financial statements as of and for the year ended December 31, 2019 included in our Form 10-K, except for Accounting Standards Update (“ASU”) 2018-15 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract which we implemented on January 1, 2020. The effects of implementing ASU 2018-15 were immaterial to our Unaudited Condensed Consolidated Financial Statements. Goodwill We have $50.2 million of goodwill on our Unaudited Condensed Consolidated Balance Sheet at March 31, 2020. Of this amount, $40.1 million relates to the Pipeline Inspection segment and $10.1 million relates to the Environmental Services segment. Goodwill is not amortized, but is subject to annual assessments on November 1 (or at other dates if events or changes in circumstances indicate that the carrying value of goodwill may be impaired) for impairment at a reporting unit level. The reporting units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. We have determined that our Pipeline Inspection, Pipeline & Process Services, and Environmental Services operating segments are the appropriate reporting units for testing goodwill impairment. To perform a goodwill impairment assessment, we first evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If this assessment reveals that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, we then determine the estimated fair market value of the reporting unit. If the carrying amount exceeds the reporting unit’s fair value, we record a goodwill impairment charge for the excess (not exceeding the carrying value of the reporting unit’s goodwill). Crude oil prices have decreased significantly in 2020, due in part to decreased demand as a result of the worldwide COVID-19 outbreak, and due in part to the oil price war started by Russia and Saudi Arabia with a focus on slowing down U.S. oil production. This decline in oil prices has led many of our customers to change their budgets and plans, which will decrease their spending on drilling, completions, and exploration. This could have an impact on construction of new pipelines, gathering systems, and related energy infrastructure. Lower exploration and production activity will also impact the midstream industry and have led to delays and cancellations of projects. It is also possible that our customers may elect to defer maintenance activities on their infrastructure. Such developments would reduce our opportunities to generate revenues. It is impossible at this time to determine what may occur, as customer plans will evolve over time. It is possible that the cumulative nature of these events could have a material adverse effect on our results of operations and financial position. For our Pipeline Inspection segment, we performed a qualitative goodwill impairment analysis at March 31, 2020 and concluded that the fair value of the reporting unit was more likely than not greater than its carrying value. Our evaluation included various qualitative factors, including current and projected earnings, current customer relationships and projects, and the impact of commodity prices on our earnings. The qualitative assessment on this reporting unit indicated that there was no need to conduct further quantitative testing for goodwill impairment. The use of different assumptions and estimates from the assumptions and estimates we used in our qualitative analyses could have resulted in the requirement to perform quantitative goodwill impairment analyses. For our Environmental Services segment, we considered the decline in the price of crude oil a potential indicator of impairment and thus performed a quantitative goodwill impairment analysis at March 31, 2020. We estimated the fair value of the reporting unit utilizing the income approach (discounted cash flows) valuation method, which is a Level 3 input as defined in ASC 820, Fair Value Measurement Property, Plant, and Equipment We assess property and equipment for possible impairment whenever events or changes in circumstances indicate, in the judgment of management, that the carrying value of the assets may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, changes in regulatory and political environments, and historical and future cash flow and profitability measurements. If the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, we recognize an impairment charge for the excess of carrying value of the asset over its estimated fair value. Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters such as future commodity prices and the outlook for national or regional market supply and demand for the services we provide. In the Environmental Services segment, assets are grouped for impairment testing purposes at each water treatment facility, as these asset groups represent the lowest level at which cash flows are separately identifiable. For our Environmental Services segment, we used the same forward crude oil price curve for our March 31, 2020 property and equipment impairment analysis that we used for our goodwill impairment analysis. Based on this analysis, we concluded that the property and equipment was not impaired. The use of different assumptions and estimates from the assumptions and estimates used in our analysis could have resulted in the need to record an impairment. While we believe we have made reasonable estimates and assumptions to estimate the future undiscounted cash flows expected from the assets, it is reasonably possible that changes could occur that would require an impairment charge in the future. Accounts Receivable and Allowance for Bad Debts We grant unsecured credit to customers under normal industry standards and terms and have established policies and procedures that allow for an evaluation of the creditworthiness of each of our customers. We typically receive payment from our customers 45 to 90 days after the services have been performed. We determine allowances for bad debts based on management’s assessment of the creditworthiness of our customers. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when cash is received. As of both March 31, 2020 and December 31, 2019, we had an allowance for doubtful accounts of $0.2 million. A former customer of our Pipeline Inspection segment, Sanchez Energy Corporation and certain of its affiliates (collectively, “Sanchez”), filed for bankruptcy protection in August 2019. As of March 31, 2020 and December 31, 2019, our Unaudited Condensed Consolidated Balance Sheets included $0.5 million of pre-petition accounts receivable from Sanchez. We have recorded an allowance of less than $0.1 million at both March 31, 2020 and December 31, 2019 against the accounts receivable from Sanchez. We do not believe it is probable that we will be unable to collect the remaining $0.4 million balance of the pre-petition receivables. However, due to uncertainties associated with the bankruptcy process, we cannot make assurances regarding the ultimate collection of these receivables nor can we make assurances regarding the timing of any such collections. Accrued Payroll and Other Accrued payroll and other March 31, December 31, (in thousands) Accrued payroll $ 7,803 $ 9,670 Customer deposits 1,669 1,682 Litigation settlement 900 1,900 Other 1,361 1,598 $ 11,733 $ 14,850 Foreign Currency Translation Our Unaudited Condensed Consolidated Financial Statements are reported in U.S. dollars. We translate our Canadian-dollar-denominated assets and liabilities into U.S. dollars at the exchange rate in effect at the balance sheet date. We translate our Canadian-dollar-denominated revenues and expenses into U.S. dollars at the average exchange rate in effect during the period in which the applicable revenues and expenses were recorded. Our Unaudited Condensed Consolidated Balance Sheet at March 31, 2020 includes $2.2 million of accumulated other comprehensive loss accumulated other comprehensive loss partners’ capital foreign currency (losses) gains New Accounting Standards In 2020, we adopted the following new accounting standard issued by the Financial Accounting Standards Board (“FASB”): The FASB issued ASU 2018-15 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract in August 2018. This guidance requires a customer in a cloud computing arrangement to follow the internal use software guidance in ASC 350-40 to determine which costs should be capitalized as assets or expensed as incurred. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted this guidance prospectively from the date of adoption (January 1, 2020) and this guidance has not had a material effect on our Unaudited Condensed Consolidated Financial Statements. Other accounting guidance proposed by the FASB that may impact our Unaudited Condensed Consolidated Financial Statements, which we have not yet adopted, include: The FASB issued ASU 2016-13 – Financial Instruments – Credit Losses in June 2016, which replaces the current “incurred loss” methodology for recognizing credit losses with an “expected loss” methodology. This guidance affects trade receivables, financial assets and certain other instruments that are not measured at fair value through net income. In November 2019, the FASB issued final guidance to delay the implementation of this new guidance for smaller reporting companies until fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact this ASU will have on our Unaudited Condensed Consolidated Financial Statements. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 3. Debt On May 29, 2018, we entered into an amended and restated credit agreement (as amended and restated, the “Credit Agreement”) that provides up to $110.0 million of borrowing capacity, subject to certain limitations. The three-year Credit Agreement matures May 28, 2021. The obligations under the Credit Agreement are secured by a first priority lien on substantially all of our assets. Outstanding borrowings at March 31, 2020 and December 31, 2019 were $101.9 million and $74.9 million, respectively, and are reflected as long-term debt debt issuance costs, net All borrowings under the Credit Agreement bear interest, at our option, on a leveraged based grid pricing at (i) a base rate plus a margin of 1.5% to 3.0% per annum (“Base Rate Borrowing”) or (ii) an adjusted LIBOR rate plus a margin of 2.5% to 4.0% per annum (“LIBOR Borrowings”). The applicable margin is determined based on our leverage ratio, as defined in the Credit Agreement. The interest rate on our borrowings ranged between 3.61% and 4.80% for the three months ended March 31, 2020 and 5.98% and 6.02% for the three months ended March 31, 2019. As of March 31, 2020, the interest rate in effect on our outstanding borrowings was 3.87%. Interest on Base Rate Borrowings is payable monthly. Interest on LIBOR Borrowings is paid upon maturity of the underlying LIBOR contract, but no less often than quarterly. Commitment fees are charged at a rate of 0.50% on any unused credit and are payable quarterly. Interest paid, including commitment fees, was $0.9 million and $1.2 million for the three months ended March 31, 2020 and 2019, respectively. The average debt balance outstanding was $77.8 million and $77.3 million during the three months ended March 31, 2020 and 2019, respectively. The Credit Agreement contains various customary covenants and restrictive provisions. The Credit Agreement also requires maintenance of certain financial covenants at each quarter end, including a leverage ratio (as defined in the Credit Agreement) of not more than 4.0 to 1.0 and an interest coverage ratio (as defined in the Credit Agreement) of not less than 3.0 to 1.0. At March 31, 2020, our leverage ratio was 3.5 to 1.0 and our interest coverage ratio was 7.4 to 1.0, pursuant to the Credit Agreement. Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the Credit Agreement, the lenders may declare any outstanding principal, together with any accrued and unpaid interest, to be immediately due and payable and may exercise the other remedies set forth or referred to in the Credit Agreement. We were in compliance with all debt covenants as of March 31, 2020. Borrowings under the Credit Agreement at each quarter-end may not exceed four times the trailing-twelve-month EBITDA. Trailing-twelve-month EBITDA, as calculated under the Credit Agreement, was $29.6 million at March 31, 2020. In addition, the Credit Agreement restricts our ability to make distributions on, or redeem or repurchase, our equity interests, with certain exceptions detailed in the Credit Agreement. However, we may make distributions of available cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under the Credit Agreement, we are in compliance with the financial covenants in the Credit Agreement, and we have at least $5.0 million of unused capacity on the Credit Agreement at the time of the distribution. As of March 31, 2020, we had $7.3 million of unused borrowing capacity under the Credit Agreement. In March 2020, in an abundance of caution, we borrowed $32.0 million on the Credit Agreement to provide substantial liquidity to manage our business in light of the COVID-19 outbreak and a significant decline in the price of crude oil. In April 2020, we borrowed an additional $7.1 million on the Credit Agreement, and in May 2020, we repaid $5.0 million on the Credit Agreement. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 4. Income Taxes As a limited partnership, we are generally not subject to U.S. federal or state income taxes. Our income tax provision relates primarily to (1) our U.S. corporate subsidiaries that provide services to public utility customers, which may not fit within the definition of qualified income as it is defined in the Internal Revenue Code, Regulations, and other guidance, which subjects this income to U.S. federal and state income taxes, (2) our Canadian subsidiary, which is subject to Canadian federal and provincial income taxes, and (3) certain other state income taxes, including the Texas franchise tax. As a publicly-traded partnership, we are subject to a statutory requirement that 90% of our total gross income represents “qualifying income” (as defined by the Internal Revenue Code, related Treasury Regulations, and Internal Revenue Service pronouncements), determined on a calendar-year basis. If our qualifying income does not meet this statutory requirement, we could be taxed as a corporation for federal and state income tax purposes. Our income has met the statutory qualifying income requirement each year since our initial public offering. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity | 5. Equity Series A Preferred Units On May 29, 2018 (the “Closing Date”), we sold 5,769,231 Series A Preferred Units representing limited partner interests in the Partnership (the “Preferred Units”) to an affiliate (“the Purchaser”) for a cash purchase price of $7.54 per Preferred Unit, resulting in gross proceeds of $43.5 million. The Purchaser is entitled to receive quarterly distributions that represent an annual return of 9.5% on the Preferred Units. Of this 9.5% annual return, we are required to pay at least 2.5% in cash and will have the option to pay the remaining 7.0% in kind (in the form of issuing additional preferred units) for the first twelve quarters after the Closing Date. The Preferred Units rank senior to our common units, and we must pay distributions on the Preferred Units (including any arrearages) before paying distributions on our common units. In addition, the Preferred Units rank senior to the common units with respect to rights upon liquidation. After the third anniversary of the Closing Date, the Purchaser will have the option to convert the Preferred Units into common units on a one-for-one basis. If certain conditions are met after the third anniversary of the Closing Date, we will have the option to cause the Preferred Units to convert to common units. After the third anniversary of the Closing Date, we will also have the option to redeem the Preferred Units. We may redeem the Preferred Units (a) at any time after the third anniversary of the Closing Date and on or prior to the fourth anniversary of the Closing Date at a redemption price equal to 105% of the issue price, and (b) at any time after the fourth anniversary of the Closing Date at a redemption price equal to 101% of the issue price. At-the-Market Equity Program In April 2018, we established an at-the-market equity program (“ATM Program”), which will allow us to offer and sell common units from time to time, to or through the sales agent under the ATM Program, up to an aggregate offering amount of $7 million. We are under no obligation to sell any common units under this program. As of the date of this filing, we have not sold any common units under the ATM Program and, as such, have not received any net proceeds or paid any compensation to the sales agent under the ATM Program. Employee Unit Purchase Plan In November 2019, we established an employee unit purchase plan (“EUPP”), which will allow us to offer and sell up to 500,000 common units. Employees can elect to have up to 10 percent of their annual base pay withheld to purchase common units, subject to terms and limitations of the EUPP. The purchase price of the common units is 95% of the volume weighted average of the closing sales prices of our common units on the ten immediately preceding trading days at the end of each offering period. There have been no common unit issuances under the EUPP. Net (Loss) Income per Unit Our net (loss) income Income attributable to our preferred unitholder Net (loss) income attributable to noncontrolling interests Net (loss) income attributable to common unitholders Basic net (loss) income per common limited partner unit net (loss) income attributable to common unitholders Diluted net (loss) income per common limited partner unit The following table summarizes the calculation of the basic net (loss) income per common limited partner unit Three Months Ended March 31, 2020 2019 (in thousands, except per unit data) Net (loss) income attributable to common unitholders $ (1,822 ) $ 567 Weighted average common units outstanding 12,096 11,971 Basic net (loss) income per common limited partner unit $ (0.15 ) $ 0.05 The following table summarizes the calculation of the diluted net (loss) income per common limited partner unit Three Months Ended March 31, 2020 2019 (in thousands, except per unit data) Net (loss) income attributable to common unitholders $ (1,822 ) $ 567 Weighted average common units outstanding 12,096 11,971 Effect of dilutive securities: Weighted average preferred units outstanding — — Long-term incentive plan unvested units — 384 Diluted weighted average common units outstanding 12,096 12,355 Diluted net (loss) income per common limited partner unit $ (0.15 ) $ 0.05 For the three months ended March 31, 2020, the preferred units and long-term incentive plan unvested units would have been antidilutive and, therefore, were not included in the computation of diluted net (loss) income per common limited partner unit diluted net (loss) income per common limited partner unit Cash Distributions The following table summarizes the cash distributions declared and paid to our common unitholders for 2019 and 2020: Total Cash Per Unit Cash Total Cash Distributions Payment Date Distributions Distributions to Affiliates (a) (in thousands) February 14, 2019 $ 0.21 $ 2,510 $ 1,606 May 15, 2019 0.21 2,531 1,622 August 14, 2019 0.21 2,534 1,624 November 14, 2019 0.21 2,534 1,627 Total 2019 Distributions $ 0.84 $ 10,109 $ 6,479 February 14, 2020 $ 0.21 $ 2,534 $ 1,627 May 15, 2020 (b) 0.21 2,562 1,648 Total 2020 Distributions (to date) $ 0.42 $ 5,096 $ 3,275 (a) 64% of the Partnership’s outstanding common units at March 31, 2020 were held by affiliates. (b) First quarter 2020 distribution was declared and will be paid in the second quarter of 2020. The following table summarizes the distributions paid to our preferred unitholder for 2019 and 2020: Cash Paid-in-Kind Total Payment Date Distributions Distributions Distributions (in thousands) February 14, 2019 $ 1,033 $ — $ 1,033 May 15, 2019 1,033 — 1,033 August 14, 2019 1,033 — 1,033 November 14, 2019 1,034 — 1,034 Total 2019 Distributions $ 4,133 $ — $ 4,133 February 14, 2020 $ 1,033 $ — $ 1,033 May 15, 2020 (a) 1,033 — 1,033 Total 2020 Distributions (to date) $ 2,066 $ — $ 2,066 (b) First quarter 2020 distribution was declared and will be paid in the second quarter of 2020. Long-Term Incentive Plan ("LTIP") In May 2020, the Board of Directors approved 400,200 phantom units ("Units") to be awarded to employees and directors. Of these Units, 378,600 Units will vest in three equal tranches in April 2023, April 2024, and April 2025, respectively, and 21,600 Units will vest in three equal tranches in April 2021, April 2022, and April 2023, respectively, contingent only on the continued service of the recipients through the vesting dates. Cypress Brown Integrity, LLC Brown’s company agreement generally requires Brown to make an annual distribution to its members equal to or greater than the amount of Brown’s taxable income multiplied by the maximum federal income tax rate. In April 2020, Brown declared and paid a distribution of $1.3 million, of which $0.7 million was distributed to us and the remainder of which was distributed to noncontrolling interest owners. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 6. Related-Party Transactions Omnibus Agreement We are party to an omnibus agreement with Holdings and other related parties. The omnibus agreement provides for, among other things, our right of first offer on Holdings’ and its subsidiaries’ assets used in, and entities primarily engaged in, providing water treatment and other water and environmental services. So long as Holdings controls our General Partner, the omnibus agreement will remain in full force and effect, unless we and Holdings agree to terminate it sooner. If Holdings ceases to control our General Partner, either party may terminate the omnibus agreement. We and Holdings may agree to further amend the omnibus agreement; however, amendments that the General Partner determines are adverse to our unitholders will also require the approval of the Conflicts Committee of our Board of Directors. Prior to January 1, 2020, the omnibus agreement called for Holdings to provide certain general and administrative services, including executive management services and expenses associated with our being a publicly-traded entity (such as audit, tax, and transfer agent fees, among others) in return for a fixed annual fee (adjusted for inflation) that was payable quarterly. This annual fee was $4.5 million in 2019. In an effort to simplify this arrangement so it would be easier for investors to understand, in November 2019, with the approval of the Conflicts Committee of the Board of Directors, we and Holdings agreed to terminate the management fee provisions of the omnibus agreement effective December 31, 2019. Beginning January 1, 2020, the executive management services and other general and administrative expenses that Holdings previously incurred and charged to us via the annual administrative fee are charged directly to us as they are incurred and are now paid directly by the Partnership. Under our current cost structure, we expect these direct expenses to be lower than the annual administrative fee that we previously paid, although we expect to experience more variability in our quarterly general and administrative expense now that we are incurring the expenses directly than when we paid a consistent administrative fee each quarter. For the three months ended March 31, 2019, Holdings charged us an administrative fee of $1.1 million, recorded within general and administrative All of the employees who conduct our business are employed by affiliates of Holdings, although we sometimes refer to these individuals in this report as our employees. We reimburse Holdings for the compensation costs associated with these employees. Alati Arnegard, LLC The Partnership provides management services to a 25% owned company, Alati Arnegard, LLC (“Arnegard”), which is part of the Environmental Services segment. We recorded earnings from this investment of less than $0.1 million for each of the three months ended March 31, 2020 and 2019, respectively. These earnings are recorded in other, net equity in earnings of investee revenue trade accounts receivable, net other assets CF Inspection Management, LLC We have also entered into a joint venture with CF Inspection, a nationally-qualified woman-owned inspection firm affiliated with one of Holdings’ owners and a Director of our General Partner. CF Inspection allows us to offer various services to clients that require the services of an approved Women’s Business Enterprise (“WBE”), as CF Inspection is certified as a Women’s Business Enterprise by the Supplier Clearinghouse in California and as a National Women’s Business Enterprise by the Women’s Business Enterprise National Council. We own 49% of CF Inspection and Cynthia A. Field, an affiliate of Holdings and a Director of our General Partner, owns the remaining 51% of CF Inspection. For the three months ended March 31, 2020 and 2019, CF Inspection, which is part of the Pipeline Inspection segment, represented approximately 3.8% and 2.6% of our consolidated revenue, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Security Deposits The Partnership has various performance obligations that are secured with short-term security deposits (reflected as restricted cash equivalents in our Unaudited Condensed Consolidated Statements of Cash Flows) totaling $0.6 million at March 31, 2020 and December 31, 2019. These amounts are included in prepaid expenses and other Compliance Audit Contingencies Certain customer master service agreements (“MSAs”) offer our customers the right to perform periodic compliance audits, which include the examination of the accuracy of our invoices. Should our invoices be determined to be inconsistent with the MSA, or inaccurate, the MSAs may provide the customer the right to receive a credit or refund for any overcharges identified. At any given time, we may have multiple audits ongoing. As of March 31, 2020 and December 31, 2019, we established a reserve of $0.2 million as an estimate of potential liabilities related to these compliance audit contingencies. Legal Proceedings Fithian v. TIR LLC On October 5, 2017, a former inspector for TIR LLC and Cypress Environmental Management – TIR, LLC (“CEM TIR”) filed a putative collective action lawsuit alleging that TIR LLC, CEM TIR and Cypress Energy Partners – Texas, LLC failed to pay a class of workers overtime in compliance with the Fair Labor Standards Act (“FLSA”) titled James Fithian, et al v. TIR LLC, et al in the United States District Court for the Western District of Texas, Midland Division. The plaintiff subsequently withdrew his action and filed a similar action in Oklahoma State Court, District of Tulsa County. The plaintiff alleged he was a non-exempt employee of CEM TIR and that he and other potential class members were not paid overtime in compliance with the FLSA. The plaintiff sought to proceed as a collective action and to receive unpaid overtime and other monetary damages, including attorney’s fees. The Partnership, TIR LLC, CEM TIR and Cypress Energy Partners – Texas, LLC denied the claims. On March 28, 2018, the court granted a joint stipulation of dismissal without prejudice in regard to TIR LLC and Cypress Energy Partners – Texas, LLC, as neither of those parties were employers of the plaintiff or the putative class members during the time period that is the subject of the lawsuit. On July 26, 2018, the plaintiff filed a motion for conditional class certification. CEM TIR subsequently filed pleadings opposing the motion. On January 25, 2019, the court denied the plaintiff’s motion for conditional class certification. On June 10, 2019, the court entered a scheduling order that proscribed, among other things, August 1, 2019 as the deadline for additional parties to join the lawsuit, and that the parties participate in a settlement conference or mediation no later than September 1, 2019. After the deadline, plaintiff’s counsel submitted consents for five additional inspectors to join the lawsuit, to which CEM TIR objected. On August 28, 2019, the parties participated in a settlement conference in which no settlement was reached. Subsequent to the settlement conference, CEM TIR submitted offers of judgment in immaterial amounts to the named plaintiff and the two opt-in plaintiffs. The Court entered the agreed judgment on February 25, 2020. Diaz v. CEM TIR On December 12, 2019, three of the former inspectors who unsuccessfully attempted to join the Fithian lawsuit after the deadline set by the court filed a putative collective action lawsuit alleging that TIR LLC and CEM TIR failed to pay a class of workers overtime in compliance with the FLSA titled Francisco Diaz, et al v. CEM TIR, et al in the United States District Court for the Northern District of Oklahoma. TIR LLC and CEM TIR deny the claims. CEM TIR and TIR LLC filed a motion to dismiss one of the plaintiffs for bringing the lawsuit in a venue that was inconsistent with the forum selection clause in his employment agreement mandating suit exclusively in the District Court of Tulsa County, Oklahoma. CEM TIR and TIR LLC also filed a motion to compel arbitration for the other two plaintiffs to enforce the binding arbitration clauses in their employment agreements. The Court has not yet ruled on either motion. The two plaintiffs with the binding arbitration clauses in their employment agreements subsequently initiated arbitration proceedings. Other We have been and may in the future be subject to litigation involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, including claims regarding the Fair Labor Standards Act and state wage and hour laws, and, in some instances, we may be allocated risk through our contract terms for actions by our customers or other third parties. Claims related to the Fair Labor Standards Act are generally not covered by insurance. From time to time, we are subject to various claims, lawsuits and other legal proceedings brought or threatened against us in the ordinary course of our business. These actions and proceedings may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination and other employment-related damages, breach of contract, property damage, environmental liabilities, multiemployer pension plan withdrawal liabilities, punitive damages and civil penalties or other losses, liquidated damages, consequential damages, or injunctive or declaratory relief. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 8. Leases Subsequent to March 31, 2020, we notified the landlord of our office headquarters of our intent to terminate a portion of our office lease effective November 2020. The termination of this lease will save us approximately $0.5 million, net of termination fees, over the life of the lease. |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Reportable Segments | 9. Reportable Segments Our operations consist of three reportable segments: (i) Pipeline Inspection Services (“Pipeline Inspection”), (ii) Pipeline & Process Services and (iii) Water and Environmental Services (“Environmental Services”). The amounts within “Other” represent corporate and overhead items not specifically allocable to the other reportable segments. Pipeline Pipeline and Environmental Inspection Process Services Services Other Total (in thousands) Three months ended March 31, 2020 Revenue $ 63,895 $ 2,922 $ 1,666 $ — $ 68,483 Costs of services 57,523 2,361 644 — 60,528 Gross margin 6,372 561 1,022 — 7,955 General and administrative 4,518 640 557 225 5,940 Depreciation, amortization and accretion 556 145 411 96 1,208 (Losses) Gains on asset disposals, net — (26 ) 14 — (12 ) Operating income (loss) $ 1,298 $ (198 ) $ 40 $ (321 ) 819 Interest expense, net (1,124 ) Losses on foreign currency (457 ) Other, net 105 Net loss before income tax expense $ (657 ) Three months ended March 31, 2019 Revenue $ 86,229 $ 1,974 $ 2,173 $ — $ 90,376 Costs of services 77,858 1,719 776 — 80,353 Gross margin 8,371 255 1,397 — 10,023 General and administrative 4,606 596 766 263 6,231 Depreciation, amortization and accretion 555 143 402 4 1,104 Gains on asset disposals, net — (21 ) — — (21 ) Operating income (loss) $ 3,210 $ (463 ) $ 229 $ (267 ) 2,709 Interest expense, net (1,311 ) Gains on foreign currency 101 Other, net 88 Net income before income tax expense $ 1,587 Total Assets March 31, 2020 $ 105,401 $ 12,717 $ 20,236 $ 37,204 $ 175,558 December 31, 2019 $ 114,858 $ 14,318 $ 21,911 $ 6,255 $ 157,342 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Unaudited Condensed Consolidated Financial Statements as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 include our accounts and those of our controlled subsidiaries. Investments over which we exercise significant influence, but do not control, are accounted for using the equity method of accounting. All intercompany transactions and account balances have been eliminated in consolidation. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2019 is derived from our audited financial statements. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Unaudited Condensed Consolidated Financial Statements include all adjustments considered necessary for a fair presentation of the consolidated financial position and consolidated results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the Unaudited Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for complete consolidated financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim Unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2019 included in our Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of our Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. The COVID-19 pandemic and the significant decline in the price of crude oil have created and may continue to create significant uncertainty in macroeconomic conditions, which may continue to cause decreased demand for our services and adversely impact our results of operations. We consider these changing economic conditions as we develop accounting estimates, such as our annual effective tax rate, allowance for bad debts, and long-lived asset impairment assessments. We expect our accounting estimates to continue to evolve depending on the duration and degree of the impact of the COVID-19 pandemic and the significant decline in the price of crude oil. Our accounting estimates may change as new events and circumstances arise. |
Goodwill | Goodwill We have $50.2 million of goodwill on our Unaudited Condensed Consolidated Balance Sheet at March 31, 2020. Of this amount, $40.1 million relates to the Pipeline Inspection segment and $10.1 million relates to the Environmental Services segment. Goodwill is not amortized, but is subject to annual assessments on November 1 (or at other dates if events or changes in circumstances indicate that the carrying value of goodwill may be impaired) for impairment at a reporting unit level. The reporting units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. We have determined that our Pipeline Inspection, Pipeline & Process Services, and Environmental Services operating segments are the appropriate reporting units for testing goodwill impairment. To perform a goodwill impairment assessment, we first evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If this assessment reveals that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, we then determine the estimated fair market value of the reporting unit. If the carrying amount exceeds the reporting unit’s fair value, we record a goodwill impairment charge for the excess (not exceeding the carrying value of the reporting unit’s goodwill). Crude oil prices have decreased significantly in 2020, due in part to decreased demand as a result of the worldwide COVID-19 outbreak, and due in part to the oil price war started by Russia and Saudi Arabia with a focus on slowing down U.S. oil production. This decline in oil prices has led many of our customers to change their budgets and plans, which will decrease their spending on drilling, completions, and exploration. This could have an impact on construction of new pipelines, gathering systems, and related energy infrastructure. Lower exploration and production activity will also impact the midstream industry and have led to delays and cancellations of projects. It is also possible that our customers may elect to defer maintenance activities on their infrastructure. Such developments would reduce our opportunities to generate revenues. It is impossible at this time to determine what may occur, as customer plans will evolve over time. It is possible that the cumulative nature of these events could have a material adverse effect on our results of operations and financial position. For our Pipeline Inspection segment, we performed a qualitative goodwill impairment analysis at March 31, 2020 and concluded that the fair value of the reporting unit was more likely than not greater than its carrying value. Our evaluation included various qualitative factors, including current and projected earnings, current customer relationships and projects, and the impact of commodity prices on our earnings. The qualitative assessment on this reporting unit indicated that there was no need to conduct further quantitative testing for goodwill impairment. The use of different assumptions and estimates from the assumptions and estimates we used in our qualitative analyses could have resulted in the requirement to perform quantitative goodwill impairment analyses. For our Environmental Services segment, we considered the decline in the price of crude oil a potential indicator of impairment and thus performed a quantitative goodwill impairment analysis at March 31, 2020. We estimated the fair value of the reporting unit utilizing the income approach (discounted cash flows) valuation method, which is a Level 3 input as defined in ASC 820, Fair Value Measurement |
Property, Plant, and Equipment | Property, Plant, and Equipment We assess property and equipment for possible impairment whenever events or changes in circumstances indicate, in the judgment of management, that the carrying value of the assets may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, changes in regulatory and political environments, and historical and future cash flow and profitability measurements. If the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, we recognize an impairment charge for the excess of carrying value of the asset over its estimated fair value. Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters such as future commodity prices and the outlook for national or regional market supply and demand for the services we provide. In the Environmental Services segment, assets are grouped for impairment testing purposes at each water treatment facility, as these asset groups represent the lowest level at which cash flows are separately identifiable. For our Environmental Services segment, we used the same forward crude oil price curve for our March 31, 2020 property and equipment impairment analysis that we used for our goodwill impairment analysis. Based on this analysis, we concluded that the property and equipment was not impaired. The use of different assumptions and estimates from the assumptions and estimates used in our analysis could have resulted in the need to record an impairment. While we believe we have made reasonable estimates and assumptions to estimate the future undiscounted cash flows expected from the assets, it is reasonably possible that changes could occur that would require an impairment charge in the future. |
Accounts Receivable and Allowance for Bad Debts | Accounts Receivable and Allowance for Bad Debts We grant unsecured credit to customers under normal industry standards and terms and have established policies and procedures that allow for an evaluation of the creditworthiness of each of our customers. We typically receive payment from our customers 45 to 90 days after the services have been performed. We determine allowances for bad debts based on management’s assessment of the creditworthiness of our customers. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when cash is received. As of both March 31, 2020 and December 31, 2019, we had an allowance for doubtful accounts of $0.2 million. A former customer of our Pipeline Inspection segment, Sanchez Energy Corporation and certain of its affiliates (collectively, “Sanchez”), filed for bankruptcy protection in August 2019. As of March 31, 2020 and December 31, 2019, our Unaudited Condensed Consolidated Balance Sheets included $0.5 million of pre-petition accounts receivable from Sanchez. We have recorded an allowance of less than $0.1 million at both March 31, 2020 and December 31, 2019 against the accounts receivable from Sanchez. We do not believe it is probable that we will be unable to collect the remaining $0.4 million balance of the pre-petition receivables. However, due to uncertainties associated with the bankruptcy process, we cannot make assurances regarding the ultimate collection of these receivables nor can we make assurances regarding the timing of any such collections. |
Accrued Payroll and Other | Accrued Payroll and Other Accrued payroll and other March 31, December 31, (in thousands) Accrued payroll $ 7,803 $ 9,670 Customer deposits 1,669 1,682 Litigation settlement 900 1,900 Other 1,361 1,598 $ 11,733 $ 14,850 |
Foreign Currency Translation | Foreign Currency Translation Our Unaudited Condensed Consolidated Financial Statements are reported in U.S. dollars. We translate our Canadian-dollar-denominated assets and liabilities into U.S. dollars at the exchange rate in effect at the balance sheet date. We translate our Canadian-dollar-denominated revenues and expenses into U.S. dollars at the average exchange rate in effect during the period in which the applicable revenues and expenses were recorded. Our Unaudited Condensed Consolidated Balance Sheet at March 31, 2020 includes $2.2 million of accumulated other comprehensive loss accumulated other comprehensive loss partners’ capital foreign currency (losses) gains |
New Accounting Standards | New Accounting Standards In 2020, we adopted the following new accounting standard issued by the Financial Accounting Standards Board (“FASB”): The FASB issued ASU 2018-15 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract in August 2018. This guidance requires a customer in a cloud computing arrangement to follow the internal use software guidance in ASC 350-40 to determine which costs should be capitalized as assets or expensed as incurred. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted this guidance prospectively from the date of adoption (January 1, 2020) and do not believe this guidance has not had a material effect on our Unaudited Condensed Consolidated Financial Statements. Other accounting guidance proposed by the FASB that may impact our Unaudited Condensed Consolidated Financial Statements, which we have not yet adopted, include: The FASB issued ASU 2016-13 – Financial Instruments – Credit Losses in June 2016, which replaces the current “incurred loss” methodology for recognizing credit losses with an “expected loss” methodology. This guidance affects trade receivables, financial assets and certain other instruments that are not measured at fair value through net income. In November 2019, the FASB issued final guidance to delay the implementation of this new guidance for smaller reporting companies until fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact this ASU will have on our Unaudited Condensed Consolidated Financial Statements. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of accrued payroll and other | Accrued payroll and other March 31, December 31, (in thousands) Accrued payroll $ 7,803 $ 9,670 Customer deposits 1,669 1,682 Litigation settlement 900 1,900 Other 1,361 1,598 $ 11,733 $ 14,850 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of the calculation of the basic net (loss) income per common limited partner unit | The following table summarizes the calculation of the basic net (loss) income per common limited partner unit Three Months Ended March 31, 2020 2019 (in thousands, except per unit data) Net (loss) income attributable to common unitholders $ (1,822 ) $ 567 Weighted average common units outstanding 12,096 11,971 Basic net (loss) income per common limited partner unit $ (0.15 ) $ 0.05 |
Schedule of the calculation of the diluted net income (loss) per common limited partner unit | The following table summarizes the calculation of the diluted net income (loss) per common limited partner unit Three Months Ended March 31, 2020 2019 (in thousands, except per unit data) Net (loss) income attributable to common unitholders $ (1,822 ) $ 567 Net income attributable to preferred unitholder — 1,033 Net (loss) income attributable to limited partners $ (1,822 ) $ 1,600 Weighted average common units outstanding $ 12,096 $ 11,971 Effect of dilutive securities Weighted average preferred units outstanding — 5,769 Long-term incentive plan unvested units — 384 Diluted weighted average common units outstanding 12,096 18,124 Diluted net (loss) income per common limited partner unit $ (0.15 ) $ 0.09 |
Schedule of cash distributions declared and paid to our common partners | The following table summarizes the cash distributions declared and paid to our common unitholders for 2019 and 2020: Total Cash Per Unit Cash Total Cash Distributions Payment Date Distributions Distributions to Affiliates (a) (in thousands) February 14, 2019 $ 0.21 $ 2,510 $ 1,606 May 15, 2019 0.21 2,531 1,622 August 14, 2019 0.21 2,534 1,624 November 14, 2019 0.21 2,534 1,627 Total 2019 Distributions $ 0.84 $ 10,109 $ 6,479 February 14, 2020 $ 0.21 $ 2,534 $ 1,627 May 15, 2020 (b) 0.21 2,562 1,648 Total 2020 Distributions (to date) $ 0.42 $ 5,096 $ 3,275 (a) 64% of the Partnership’s outstanding common units at March 31, 2020 were held by affiliates. (b) First quarter 2020 distribution was declared and will be paid in the second quarter of 2020. |
Schedule of distributions paid to our preferred unitholder | The following table summarizes the distributions paid to our preferred unitholder for 2019 and 2020: Cash Paid-in-Kind Total Payment Date Distributions Distributions Distributions (in thousands) February 14, 2019 $ 1,033 $ — $ 1,033 May 15, 2019 1,033 — 1,033 August 14, 2019 1,033 — 1,033 November 14, 2019 1,034 — 1,034 Total 2019 Distributions $ 4,133 $ — $ 4,133 February 14, 2020 $ 1,033 $ — $ 1,033 May 15, 2020 (a) 1,033 — 1,033 Total 2020 Distributions (to date) $ 2,066 $ — $ 2,066 (b) First quarter 2020 distribution was declared and will be paid in the second quarter of 2020. |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of operating income (loss) by reportable segment and a reconciliation of segment operating income to net income | Our operations consist of three reportable segments: (i) Pipeline Inspection Services (“Pipeline Inspection”), (ii) Pipeline & Process Services and (iii) Water and Environmental Services (“Environmental Services”). The amounts within “Other” represent corporate and overhead items not specifically allocable to the other reportable segments. Pipeline Pipeline and Environmental Inspection Process Services Services Other Total (in thousands) Three months ended March 31, 2020 Revenue $ 63,895 $ 2,922 $ 1,666 $ — $ 68,483 Costs of services 57,523 2,361 644 — 60,528 Gross margin 6,372 561 1,022 — 7,955 General and administrative 4,518 640 557 225 5,940 Depreciation, amortization and accretion 556 145 411 96 1,208 (Losses) Gains on asset disposals, net — (26 ) 14 — (12 ) Operating income (loss) $ 1,298 $ (198 ) $ 40 $ (321 ) 819 Interest expense, net (1,124 ) Losses on foreign currency (457 ) Other, net 105 Net loss before income tax expense $ (657 ) Three months ended March 31, 2019 Revenue $ 86,229 $ 1,974 $ 2,173 $ — $ 90,376 Costs of services 77,858 1,719 776 — 80,353 Gross margin 8,371 255 1,397 — 10,023 General and administrative 4,606 596 766 263 6,231 Depreciation, amortization and accretion 555 143 402 4 1,104 Gains on asset disposals, net — (21 ) — — (21 ) Operating income (loss) $ 3,210 $ (463 ) $ 229 $ (267 ) 2,709 Interest expense, net (1,311 ) Gains on foreign currency 101 Other, net 88 Net income before income tax expense $ 1,587 Total Assets March 31, 2020 $ 105,401 $ 12,717 $ 20,236 $ 37,204 $ 175,558 December 31, 2019 $ 114,858 $ 14,318 $ 21,911 $ 6,255 $ 157,342 |
Organization and Operations (De
Organization and Operations (Details Narrative) | Mar. 31, 2020Number |
Equity interest salt water disposal facility | 25.00% |
Environmental Services [Member] | |
Number of water treatment facilities | 9 |
Number of EPA Class II injection wells | 10 |
Number of water treatment facilities connected to pipeline gathering systems | 12 |
Number of water treatment facilities connected to pipeline gathering systems developed and own | 2 |
Number of water treatment facilities wholly-own | 8 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Accrued payroll | $ 7,803 | $ 9,670 |
Customer deposits | 1,669 | 1,682 |
Litigation settlement | 900 | 1,900 |
Other | 1,361 | 1,598 |
Total | $ 11,733 | $ 14,850 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | Jun. 30, 2028$ / bbl | Dec. 31, 2023$ / bbl | Jan. 31, 2021$ / bbl | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Allowance for doubtful accounts receivable | $ 200 | $ 200 | |||
Accumulated other comprehensive loss | (2,229) | (2,577) | |||
Goodwill | $ 50,238 | 50,356 | |||
Discount Rate [Member] | |||||
Goodwill measurement input | 0.12 | ||||
Measurement Input Commodity Forward Price [Member] | Scenario Forecast [Member] | Crude Oil [Member] | |||||
Goodwill measurement input | $ / bbl | 50 | 40 | 30 | ||
Pipeline Inspection [Member] | |||||
Goodwill | $ 40,100 | ||||
Environmental Services [Member] | |||||
Goodwill | 10,100 | ||||
Sanchez Energy Corporation [Member] | |||||
Allowance for doubtful accounts receivable | 100 | 100 | |||
Accounts receivable | 400 | 400 | |||
Accounts receivable before allowance | $ 500 | $ 500 |
Debt (Details Narrative)
Debt (Details Narrative) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
May 31, 2020USD ($) | Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | May 29, 2018USD ($) | |
Credit facility, Average amount outstanding | $ 77,800 | $ 77,300 | ||||
Long-term debt | 101,929 | $ 74,929 | ||||
Debt issuance costs, net | 677 | 803 | ||||
Borrowings on credit facility | 32,000 | 7,000 | ||||
Payments on credit facility | $ 5,000 | |||||
Base Rate [Member] | Minimum [Member] | ||||||
Spread on variable rate borrowings | 1.50% | |||||
Base Rate [Member] | Maximum [Member] | ||||||
Spread on variable rate borrowings | 3.00% | |||||
LIBOR [Member] | Minimum [Member] | ||||||
Spread on variable rate borrowings | 2.50% | |||||
LIBOR [Member] | Maximum [Member] | ||||||
Spread on variable rate borrowings | 4.00% | |||||
Amended and Restated Credit Agreement [Member] | ||||||
Line of credit facility, maximum borrowing capacity | $ 110,000 | |||||
Line of credit facility maturity date | May 28, 2021 | |||||
Debt issuance costs | $ 700 | $ 800 | ||||
Debt instrument, interest rate, effective percentage | 3.87% | |||||
Debt covenant total adjusted leverage ratio maximum | 4 | |||||
Debt covenant interest coverage ratio minimum | 3 | |||||
Total adjusted leverage ratio | 3.5 | |||||
Interest coverage ratio | 7.5 | |||||
Credit agreement minimum unused capacity at time of distributions | $ 5,000 | |||||
Credit agreement available borrowings | 7,300 | |||||
Finance lease liabilities | 700 | |||||
Borrowings on credit facility | $ 29,600 | |||||
Amended and Restated Credit Agreement [Member] | Subsequent Event [Member] | ||||||
Borrowings on credit facility | $ 7,100 | |||||
Payments on credit facility | $ 5,000 | |||||
Line of Credit [Member] | ||||||
Commitment fee rate, percentage | 0.50% | |||||
Interest expense including commitment fee | $ 900 | $ 1,200 | ||||
Line of Credit [Member] | Minimum [Member] | ||||||
Debt instrument, interest rate, effective percentage during period | 3.61% | 5.98% | ||||
Line of Credit [Member] | Maximum [Member] | ||||||
Debt instrument, interest rate, effective percentage during period | 4.80% | 6.02% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Threshold for nontaxation | 90.00% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Net (loss) income attributable to common unitholders | $ (1,822) | $ 567 |
Weighted average common units outstanding | 12,096 | 11,971 |
Basic net (loss) income per common limited partner unit | $ (0.15) | $ 0.05 |
Equity (Details 1)
Equity (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Net (loss) income attributable to common unitholders | $ (1,822) | $ 567 |
Weighted average common units outstanding | 12,096 | 11,971 |
Effect of dilutive securities | ||
Long-term incentive plan unvested units | 384 | |
Diluted weighted average common units outstanding | 12,096 | 12,355 |
Diluted net (loss) income per common limited partner unit | $ (0.15) | $ 0.05 |
Equity (Details 2)
Equity (Details 2) - USD ($) $ / shares in Units, $ in Thousands | May 15, 2020 | Feb. 14, 2020 | Nov. 14, 2019 | Aug. 14, 2019 | May 15, 2019 | Feb. 14, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Per Unit Cash Distribution (in dollars per share) | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.42 | $ 0.84 | ||
Total Cash Distribution | $ 2,534 | $ 2,534 | $ 2,534 | $ 2,531 | $ 2,510 | $ 5,096 | $ 10,109 | ||
Subsequent Event [Member] | |||||||||
Per Unit Cash Distribution (in dollars per share) | [1] | $ 0.21 | |||||||
Total Cash Distribution | [1] | $ 2,562 | |||||||
Affiliated Entity [Member] | |||||||||
Total Cash Distribution | [2] | $ 1,627 | $ 1,627 | $ 1,624 | $ 1,622 | $ 1,606 | $ 3,275 | $ 6,479 | |
Affiliated Entity [Member] | Subsequent Event [Member] | |||||||||
Total Cash Distribution | [1],[2] | $ 1,648 | |||||||
[1] | First quarter 2020 distribution was declared and will be paid in the second quarter of 2020. | ||||||||
[2] | 64% of the Partnership's outstanding common units at March 31, 2020 were held by affiliates. |
Equity (Details 3)
Equity (Details 3) - USD ($) $ in Thousands | May 15, 2020 | Feb. 14, 2020 | Nov. 14, 2019 | Aug. 14, 2019 | May 15, 2019 | Feb. 14, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Total Distributions | $ 2,534 | $ 2,534 | $ 2,534 | $ 2,531 | $ 2,510 | $ 5,096 | $ 10,109 | ||
Subsequent Event [Member] | |||||||||
Total Distributions | [1] | $ 2,562 | |||||||
Preferred Units [Member] | |||||||||
Total Distributions | 1,033 | 1,034 | 1,033 | 1,033 | 1,033 | 2,066 | 4,133 | ||
Preferred Units [Member] | Subsequent Event [Member] | |||||||||
Total Distributions | 1,033 | ||||||||
Preferred Units [Member] | Total Cash Distribution [Member] | |||||||||
Total Distributions | $ 1,033 | $ 1,034 | $ 1,033 | $ 1,033 | $ 1,033 | $ 2,066 | $ 4,133 | ||
Preferred Units [Member] | Total Cash Distribution [Member] | Subsequent Event [Member] | |||||||||
Total Distributions | $ 1,033 | ||||||||
[1] | First quarter 2020 distribution was declared and will be paid in the second quarter of 2020. |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2018 | Apr. 30, 2018 | Mar. 31, 2020 | Nov. 30, 2019 |
Percentage of partnership units held by affiliates | 64.00% | |||
Brown Integrity, LLC [Member] | ||||
Percentage of income attributable to noncontrolling interests | 49.00% | |||
CF Inspection Management, LLC [Member] | ||||
Percentage of income attributable to noncontrolling interests | 51.00% | |||
Preferred Units [Member] | ||||
Annual rate of return of Preferred Units (percent) | 9.50% | |||
Dividend distribution to be paid in cash (percent) | 2.50% | |||
Dividend distribution to be paid in kind (percent) | 7.00% | |||
Percentage of income attributable to noncontrolling interests | 9.50% | |||
Common Units [Member] | ||||
Aggregate amount of common units authorized to issue under at-the-market program | $ 7,000 | |||
Common Units [Member] | Employee Unit Purchase Plan [Member] | ||||
Number of common units authorized under program | 500,000 | |||
Percentage of annual base pay employees may elect to withhold to purchase common units | 10.00% | |||
Purchase price percentage of common units under program | 95.00% | |||
Private Placement [Member] | Preferred Units [Member] | ||||
Number of units issued and sold in a private placement | 5,769,231 | |||
Price per unit (in dollars per unit) | $ 7.54 | |||
Proceeds of units sold in a private placement | $ 43,500 | |||
Private Placement [Member] | Preferred Units [Member] | Redemption Period Two [Member] | ||||
Redemption price as percent of issue price | 105.00% | |||
Private Placement [Member] | Preferred Units [Member] | Redemption Period Third [Member] | ||||
Redemption price as percent of issue price | 101.00% |
Related-Party Transactions (Det
Related-Party Transactions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Equity in earnings of investee | $ 42 | $ 29 | |
General Partner [Member] | |||
Holdings administrative fees charged | 1,100 | ||
General Partner [Member] | Omnibus Agreement [Member] | |||
Annual fee per agreement | $ 4,500 | ||
Alati Arnegard LLC [Member] | |||
Ownership interest | 25.00% | ||
Management fee revenue from related parties | $ 200 | $ 200 | |
Accounts receivable from related parties | 100 | 100 | |
Investment in Arnegard | $ 400 | $ 400 |
Related-Party Transactions (D_2
Related-Party Transactions (Details Narrative 1) - CF Inspection Management, LLC [Member] | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Ownership interest | 49.00% | ||
Revenues [Member] | |||
Concentration percentage | 2.60% | ||
Pipeline Inspection Segment [Member] | |||
Concentration percentage | 3.80% | ||
Cynthia A. Fields [Member] | |||
Ownership interest | 51.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Name of Defendant | CEM TIR and TIR LLC also filed a motion to compel arbitration for the other two plaintiffs to enforce the binding arbitration clauses in their employment agreements. The Court has not yet ruled on either motion. The two plaintiffs with the binding arbitration provisions subsequently initiated arbitration proceedings. | |
Sun Mountain LLC v. TIR-PUC [Member] | ||
Lawsuit filing date | December 12, 2019 | |
Name of Plaintiff | Diaz v. CEM TIR | |
Name of Defendant | TIR-PUC | |
Settlement date | February 25, 2020 | |
Master Service Agreement Compliance Audits [Member] | ||
Compliance audit contigencies reserve | $ 200 | $ 200 |
Performance Obligation [Member] | ||
Short-term security deposits | $ 600 | $ 600 |
Leases (Details Narrative)
Leases (Details Narrative) $ in Thousands | 1 Months Ended |
Apr. 30, 2020USD ($) | |
Subsequent Event [Member] | Office Space Headquarters [Member] | |
Costs savings from operating lease termination | $ 500 |
Reportable Segments (Details)
Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues | $ 68,483 | $ 90,376 | |
Costs of services | 60,528 | 80,353 | |
Gross margin | 7,955 | 10,023 | |
General and administrative | 5,940 | 6,231 | |
Depreciation, amortization and accretion | 1,208 | 1,104 | |
(Losses) Gains on asset disposals, net | (12) | (21) | |
Operating income (loss) | 819 | 2,709 | |
Interest expense, net | (1,124) | (1,311) | |
Gains (losses) on foreign currency | (457) | 101 | |
Other, net | 105 | 88 | |
Net income (loss) before income tax expense | (657) | 1,587 | |
Total assets | 175,558 | $ 157,342 | |
Pipeline Inspection [Member] | |||
Revenues | 63,895 | 86,229 | |
Costs of services | 57,523 | 77,858 | |
Gross margin | 6,372 | 8,371 | |
General and administrative | 4,518 | 4,606 | |
Depreciation, amortization and accretion | 556 | 555 | |
Operating income (loss) | 1,298 | 3,210 | |
Total assets | 105,401 | 114,858 | |
Pipeline & Process Services [Member] | |||
Revenues | 2,922 | 1,974 | |
Costs of services | 2,361 | 1,719 | |
Gross margin | 561 | 255 | |
General and administrative | 640 | 596 | |
Depreciation, amortization and accretion | 145 | 143 | |
(Losses) Gains on asset disposals, net | (26) | (21) | |
Operating income (loss) | (198) | (463) | |
Total assets | 12,717 | 14,318 | |
Environmental Services [Member] | |||
Revenues | 1,666 | 2,173 | |
Costs of services | 644 | 776 | |
Gross margin | 1,022 | 1,397 | |
General and administrative | 557 | 766 | |
Depreciation, amortization and accretion | 411 | 402 | |
(Losses) Gains on asset disposals, net | 14 | ||
Operating income (loss) | 40 | 229 | |
Total assets | 20,236 | 21,911 | |
Other [Member] | |||
General and administrative | 225 | 263 | |
Depreciation, amortization and accretion | 96 | 4 | |
Operating income (loss) | (321) | $ (267) | |
Total assets | $ 37,204 | $ 6,255 |
Reportable Segments (Details Na
Reportable Segments (Details Narrative) | 3 Months Ended |
Mar. 31, 2020Number | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |