CCLP - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to CSI Compressco LP's Third Quarter 2019 Earnings Conference Call. The speakers for today's call are Brady Murphy, President for CSI Compressco LP and Elijio Serrano, Chief Financial Officer for CSI Compressco LP and also for TETRA Technologies, Inc., which is the general partner of CSI Compressco LP; and [Yasik Muha], Vice President of Finance and Treasurer for TETRA Technologies, Inc. and CSI Compressco LP. Also in attendance today is Michael Moscoso, Vice President of CSI Compressco LP.

[Operator Instructions] Please note, this event is being recorded. now conference to to like would turn over the Mr. I opening remarks. for Muha Please go ahead.

Unidentified Company Representative

Good thank Thanks, CSI everyone, morning, Elisa. and Quarter Results Compressco's you XXXX Conference Call. Third joining for

call of factors. remind CSI on that number or to to Compressco and be be on based are to These a many subject of These deemed statements a analysis certain like I'd assumptions may this conference and statements that uncertainties, may are you risks are of are statements based of the beyond forward-looking. number the contain made by partnership. which control

You may not guarantees differ are the of results those statements from actual in projected and cautioned that materially forward-looking such future are statement. performance

measures. refer flow, adjusted distributable or measures. the of reconciliations in press addition, GAAP for cash flow, to website considered financial and results coverage information free distribution Please to of complete for morning's should substitute public within accordance financial EBITDA, other GAAP non-GAAP are In course refer we the in period. the prepared non-GAAP with cash our EBITDA, be measures release to our backlog of not a context for ratio, or the this financial the nearest to may These call, financial reconciliations

or release In to X, planned November is earlier this the addition be on went before that our filed press to XX-Q on Form morning SEC our our out announcement XXXX. and website, is with posted

With that, turn I to will over now it Brady.

Brady Murphy

then and performance will details and start and turn an to our third provide conference will quarter morning projections. results with call who Good financial our on Serrano, over everyone our call. of Yasik. thank results more you the you, joining updated for Elijio Thank overview I and

had another of delivered Compressco achievements. set outstanding CSI record another and quarter

And services from million as of XX quarter in which increased sequentially. a $XX XX.X%. record Compression X% second sequentially, compression for which services compression in margins profits quarter highs revenue increased reached points gross at second fleet, $XX ended million the achieved we the $XX.X expanded in while utilization basis gross row, XX.X%. margins our the For services million to quarter

Our equipment deploy core continued our generate have our as customers continue fleet core margins return new services to at we deploy to to geographies on in – XX% compression gross capital. least that improve

deploying We utilize the for effectively continue and of to where realize into benefit customers leverage new clusters from get the employees. we well-capitalized equipment can financial we core more our

our technician the beginning horsepower flat, effectively increased year, improving Since approximately headcount have the horsepower-to-technician our keeping by while we ratio. our of XX,XXX

tools reduce continues are management fully our In uncertainty increasing all the to count Our activity drive areas system of utilizing focus U.S. costs. improved efficiencies the business industry, gas to and oil team ERP our U.S. rapidly production. of underpinned and deliver declining in rig period and outlook to in results the a long-term data gas and from on by

consistent to up year. $XXX year. period decrease drop second XXXX EBITDA equipment a $XXX adjusted improved this was EBITDA decline, This in this the compares the to third same revenue despite of on timing from over XXXX. the million of and quarter shipments quarter $XXX The sequential result, $XX sales X% in increased from from of million was of million sequentially Despite revenue quarter Third last our for expectations. quarter the sequential a with year, XXXX is and last of adjusted XX% second million revenue

increased X.X sequentially million. Aftermarket million XX.X Services revenue by to

the the services year strong end we're for and We given services customer expect parts demands backlog. seeing aftermarket services and to aftermarket strong

market a capital for good investment aftermarket generates fourth business the And services. our revenue after reminder very and returns. expect quarter minimal We in service sequentially as and requires profitability increase

X approximately equipment totaled new cancellations the of up from Bookings second million. quarter bookings quarter Third XXXX. million for of million, of were XXXX in XX XX net

the of was from XX million Our backlog of of the end and X million XX after up quarter XX third second million. September as quarter shipments

to in we that expect or of the fourth XXXX orders more the We our expect first for part one larger of two to have backlog deliveries. to XXXX fulfill XXXX

pipeline unit of sales in opportunities. The identified we as opportunities XXX excess continue global our leads remains to replenish new million on

to delivery, to equipment this orders have business. a While some key nine recently healthy see months to outlook order not months customers to coming components on to delayed need we due partially continue lead and down XX for times prior

compression Basin lift in to where our continues the in gas And horsepower strongest continue stages Permian we particularly services share oil higher the an fleet new Centralized be we to additions our of in have early position. our deploy market fleet. for for customers high-demand application important production, core

in of the Additionally, number lift on our services liquids methods with we focus of have application our aging as or artificial assisted working beginning plunger combined this out conventional lift a increased in increase or gas fourfold GasJack resulted such the oil year. for the on GAPL our backside injection wells, has sets, auto since BAIS

for lift. horizontal rod new producing of day, where per barrels wells system not life developed the to oil achieve horsepower failed large specifically conventional lift efficiency wells XXX application later on below support This was that desired compression in typically that will are

be with installed well In the expense major with the wireline, associated reducing CapEx, can to addition workover. it avoiding

times of success in much enhances was have multiple orders GAPL new October on utilization in only pleased that as month our increased I'm studies to customers fleet and Permian say X Further, to largest the ever SCOOP/STACK XX these and for return our liquids increasing require and orders. applications capital. to by as case GasJack oil Recent minimal the production and resulting capital liquids multiples our in basins. deploy times highlighted by

capital customers are As investment or production. while our looking increasing to minimize maintaining

Overall highs second from in end higher equipment at the from for end, of was systems XX.X% XXXX. lift horsepower gas fleet points and quarter or from and X,XXX for fourth which quarter we quarter our end the on of Out second in of of of utilization accomplished and the for in focused utilization was end horsepower of XXXX. entire quarter the quarter XXXX. second at XX XX.X% total the a of overall fleet at is XX.X% the This up third Our gathering operations, in X,XXX basis since record up up at consecutive horsepower our the XX.X% utilization centralized fleet quarter more XX.X% the was the size.

large slowdown. some our discussions mentioned, equipment that I horsepower – demand in customers XXXX centralized for already addressing We're to lift. gathering currently lift units requirements gas Though their centralized gas for their – address and on with modest is experiencing lift

where of deploy have equipment, orders new not a will to of commit or higher. approach prices disciplined commitment to any on and customer we that our new XX% returns capital full whom at generate Given unless we

on growth Elijio TETRA fleet and elaborate will our XXXX. our on further capital into well in expenditures expect total With thoughts expenditures we to support, capital deploy plans equipment early as as XXXX. new year XXX,XXX approximately of projected for horsepower some

had for further for will The the drives services. overall, decline and to In quarter outlook gas long-term our businesses strongest with compression in strong completion gas sequentially segments coming demand the very X%. a energy X.X equipment quarters, the business likely with be overall EBITDA in sequentially increase projected compression across increasing increased spend revenue overall or one and XXXX continues by production services underpinned million increasing production, which gas of summary we oil adjusted and in to sector while drilling and is aftermarket

customers satisfy We business, will continue to to while gross with working utilization work our their compression and core our services improving on margins in requirements.

strong Our aftermarket to a expected to the we to Year. into business stay finish strong and is New as continue have head XXXX

Finally, large the deliveries. months over I'll orders our now turn to in call to to we backlog out for necessary several expect come over Elijio. next additional the XXXX build

Elijio Serrano

Brady of flow, results. spend the to touched touch key areas Brady. balance the you, allocation our expenditures, capital our cash related on capital minutes updated Thank sheet, and couple focusing on a guidance I'll strategy. operating on

flow $XX.X equipment. capital, for were in receipt were expenditures second $XX Capital cash from million Cash sale from operating from $X.X quarter. million the used million of up of net growth activities

approximately operating quarter, horsepower our third we added the In to XX,XXX fleet.

in Distributable of maintenance All million quarter third additions the X,XXX and horsepower size. was for flow are XX% XXXX $X.X over $XX.X quarter, million, the improved expenditures. invested for of per up sequentially. Also the in it from of capital cash unit equipment we

decision Our on Units Preferred distributable reflects December of cash distribution our year flow XXXX. in last Series completed which to to reduce the coverage final ratio XX with redemption August X, to times, redeemed with cash a

net mature At end and year the the of mature in September, of total $XXX August unsecured XXXX. outstanding million that were of million notes are Distributions which was the XXXX the in the $XXX in that secured $XXX debt notes are $XXX,XXX. million paid quarter

don't a comply of September as million. ABL approximately covenants on any have revolver was to maintenance as and was million we $XX And hand $XX Our XX, cash reminder, with.

of times. September X.X Our leverage ratio was the at end

And quarter when New the net However, at way we of X.X end ratios announced a at reiterated, of York in we to X on investor our conference third times, goal reduction our last times that annualizing towards of city. when times leverage a distribution to may EBITDA, we well has of in leverage to year ratio net XXXX, X.X committed the would our our achieve be adjusted high our QX that compared year, last times. in in X.X December improved

million at $XX to $XX million, million million of expenditures. total maintenance of XXXX remain We $XX expect inclusive $XX expenditures capital to to

that expect expenditures Our sell to from to fund are growth with cash operations. estimated hand to flow cash $XX million $XX we capital or be million on

our equipment is CSI general having to horsepower XX,XXX customer $XX years to the our equipment to being sole mentioned, And to TETRA Compressco, meet horsepower be has discretion. anytime million, purchase will Compressco's Technologies, XX,XXX five fleet as right CSI agreed TETRA over demands. at from of the our up buy to leased with previously the This next that's compression partner deployed that

of already for Some key field this is working customers. in the equipment

million and satisfy we TETRA’s the mentioned. our we current time will and customers’ to of September, and under expenditures, within inclusive the flows. $XX Year-to-date just expenditures excluding I that demands we of capital lease support capital $XX.X through approximately plans, our funded capital TETRA grow the us at Between same commitment million own maintenance invested believe cash

horsepower fall-through Total is margins. an of with fleet. very in been almost increase X,XXX horsepower horsepower, of now all initiatives All XX.X% more capital equipment each. approximately over from units expected composed as on high returns fleet the the mentioned additions Brady or to this X% X,XXX added All size and XX% targeting the earlier, horsepower XXX,XXX of new is to of in have be year our this

increased XX,XXX. Compressco average CSI active by operating quarter, horsepower the more During than

growth year-over-year and to compares achieved $XX between This XX% prior to million XX%. XXXX year $XXX year respect guidance. adjusted and represents million, last guidance, consistent a that $XXX million remains total adjusted of total between we With guidance with the EBITDA to year

We expect last of million $XXX XXXX the to ago. months revenues an $XX million $XX is from This to gave three year. million, and unchanged million which $XXX we between also increase from be guidance is between

We compression a getting are very encouraged with count. rig business North a challenge America are in decline land in market with our that

the America quarters any and oil and So in gas the several our in to on far uncertainty. in broader the fundamentals North the business, continued not impact have has last had with business all decline market improve the fact

$XX During expenditures for of year, guidance maintenance approximately interest adjusted taxes. capital million expense, of million accounting $X our and $XX the million midpoint of million and $XXX.X full of EBITDA cash after of

of to expect approximately generate cash distributable flow. $XX We million

units our in the of of million XX% CapEx respect unit generate return occurred plans distributions. approximately million on margins Series of preferred year. were we to a to year growth last that the towards flow directed This cash capital. redeemed And direct cash on million Xth market Series this the redemption achieving, previously continues August growth A the support towards future approximately that reminder, with the $XX capital was towards assumption $X preferred as and $XX A are that capital, to communicated allocation, With the distributable high XX% we rest

than XX% timing distribution equipment towards distributable we growth two As in capital the now we be fleet mixed that from on customers we of security reduce outlined December XXXX, we next signals are additional year's XXXX, of some flow. When objectives. less cash to to XX, respond expecting

holders equity the The to the common protect by conversion A diluted first of A cash units to avoiding units. into was redeemed Series units preferred Series Preferred value

completed that have objective. We

hosted of objective leverage the the lower. at ratio commitment York and X.X city communicate or Investor in This is XXXX. May, an communicated the goal also we we same Conference New times to We reducing in

value. the the goals to We to consistent have unitholder objectives Our with and capital respect allocation remained remain past over of year. creation focused intend on

creating quarters, by leverage and in the likely our drilling spend overall completion important decline sheet that market focus uncertainty, even the that ratio. coming balance we continuing to some believe on is While it improve will we more

available customers’ than any transfer flow. our material the to As years believe be sheet, focused a distributable result, cash holders delevering our the which holders. amounts less distributable key debt our after meeting balance we cash requirements, improving of to on debt We’ll to for be equity values flow next XX% from retirement of and

our leverage to by potentially of a targeted market the achieve end EBITDA XXXX in adjusted expect through of of open times continued We X.X sooner, combination bonds. purchases ratio of improvements and the unsecured or

new of dependent available to generating market our at. in see is capital. what immediate vast monitoring the XX% super balance on distributable or bonds majors the sheets to The cash timing returns generating programs. large retirement will cash going majority independents be are their flow the capital trading will The and drilling that customers of the orders, are go unsecured fulfilling quarters with targeted towards on and well-defined solid customer top our The

year, Beginning for on expect X.XX%. XX%, the are next with $X.XX with unsecure around of yield than dollar more above of flow to reduction. the early next a we year's cash debt to XX% maturity bonds distributable to toward the Currently, debt targeted of reduction trading coupon compares which slightly focus

ratio to create August, levels of successfully for outstanding that in We leverage debt bonds mature the us expect unsecured an will XXXX. lower and a refinance that improved total path

is the the not those bonds Once refinanced, unsecured maturity XXXX. are year next until

make improving to redirect ratio as XXXX unit covenants to debt conditions comply maintenance and to allocation back to business and maturity our will flow to bonds cash Compressco create into to flexibility this opportunity a creates with capital towards But being investments focus no then beyond Directors buybacks the If we more first, a towards unsecure market significant or to capital with, on CSI significantly this drive of evolve, our distributions, pushed of Board company we reduction, to combination and direct our out earnings. reassess the for holders. continuing begin the equity work distributable for improved leverage With priorities. will earnings up

questions. the to we'll Operator, open that, with now call

Operator

you. Thank

The We ahead. first now comes Please will the question-and-answer begin James. Praveen Instructions] today session. go question Raymond of [Operator Narra from

Praveen Narra

the Hey, larger good guys. items. morning start I horsepower could guess, we on if

of month-to-month the of about getting And you're the large terms contracts. can the is you you're maybe out return, length putting this on Obviously maybe an point? but length give So, could the if of you of talk on there? update good at rates us portion what horsepower

Elijio Serrano

demand rollover. year Praveen, The two years, the us which And more did increase equipment that are at we contract a big units units that will a X,XXX or are X,XXX a consciously horsepower is to [indiscernible] because and above opportunity each. believe that going we the the for going an as prices at provide

margin that locked So an commit rather period. of type and over into than in four three, get then time those to years in extended

a are year three than ago to I the rolling right that had price increases, we market contract. getting that four better units deployed we over or are tried because year called think in lock the at we if

Praveen Narra

Right. of horsepower And update on the month-to-month any the what is? on large kind

Elijio Serrano

Right.

So over high price from single-digit large on the that contracts. we're year units seeing one increases rolling are horsepower all

high getting they be we're year ago, deployed a equipment we to this still market. single-digit good pricing, very in rollover as increases that believe So price

Praveen Narra

Okay.

how of set that's are last talk smaller to next talked seeing about roll take same that operators a the XXXX some over Are of or in adopted year? you the cases equipment operators out in better used I horsepower horsepower for the smaller have them. On it guess, to that Can we certainly kind expanding ability you different seeing should you wider how a for that changes the XXXX, think of approach? lot on of that XXXX? you've about year, the gotten about, some

Brad Murphy

getting the that adoption with well on that our smaller production, acceptance some new applications them believe GAPL application, of have as think, system we the improved with have to very that as Praveen, to that is we Yes, we Brady. backside. fantastic of independence think investment for them used application. support get end access And into the we're to you pleased expansion injecting and our of we'll the And very BAIS the when We're in are application results our some continue deploy the perfect we difficulty drove customers. getting, for new this the as you for we having capital – techniques we're about that with away seeing production returns results a capital little can of

solution So within introduced the we we're head XXXX. continuing this year. traction solution this very into as And about only we've to gain past optimistic really

Praveen Narra

guess, maybe one I ask and off. I'll hop I'll more

give those Just the applications idea on small of you what percentage us kind an horsepower being point, newer is fleet that of fleet? of for utilized can used just the of

Elijio Serrano

as Praveen, of applications know now the phases. the And our Brady total you right early represents mentioned X% the that about fleet. fleet GasJack So are

So I the that of it's would application we that small there. suggest that growing probably X%, section it's but have fastest out a

Brad Murphy

Yes. that application far new fastest growing we're It's Praveen. by sets of the deploying

Praveen Narra

guys. Thanks Perfect.

Operator

Please McCammon next ahead. go The Flow of from comes Cash Darren question Kingdom.

Darren McCammon

guys. Hi

impressive. Before flow increase XX% last congratulate in you cash questions, wanted we on over just the distributed year. get I to the That's to very

Elijio Serrano

Darren. you, Thank

Brad Murphy

Thank you.

Darren McCammon

figures are is so, DCF at show My correct? you trading approximately that now or XX% yield

Elijio Serrano

math. your trust I

Darren McCammon

fair Okay, enough.

Do or When that's So about you on you rate? you've use quarter is, X.X transparent have allocation, I run positive, times mentioned EBITDA question free also call saw ratio debt this so great. measure, One turned to when current your very that flow you target. cash you on that. I EBITDA congratulations been trailing capital your

Elijio Serrano

months end at the EBITDA. XX So the will next that of is be year, trailing X.X times

Darren McCammon

to banks that what also tend use? the And is Okay.

Elijio Serrano

all computation. as what use That's a Yes. creditors standard

Darren McCammon

Okay.

So but Chesapeake maybe understandable. them. wondering your that's does I – gave what this, exposure know or more Williams, warning concern I yesterday. you Chesapeake know for gave don't to work a was some On was going a them if to you

Elijio Serrano

that about avoid that a we independents. coming both plans or the bankruptcy are to account majority bit our year mention last is have defined of are able customers. we'll about to CapEx vast of taking is little large the Two-thirds customers of create a I the year our creditworthiness talking or our any super gas to five the customers, about the well majors very call of especially be from the going top well-capitalized I'll allocated to with drilling customers, that concerns don't revenue So services this fleet we've customer. And three creditworthiness compression for compression that programs. our stream and specific into cash moving

allows And very our on services seen declared funded from cash. get compression vendor critical where cases have services XX we remain place and pretty the we in limited in filings much to some that Chapter We've been to the site. a

I'm creditworthiness not about concerned the So compression any services on on exposure fleet.

Darren McCammon

question you. competitors, your for ROI. me. committed competitive I'm on you buying XX% I you about at only customers of are wondering That's of pressure? increased helpful. Last commend for Thank any units signs seeing

Elijio Serrano

Darren. So good question,

same provider from customers a field of be service displace basins a service have a provider a accountable. past so don't price a get to I the don't think, service our equipment able tend try our that. competitor hold bit equipment you they cluster that other. Therefore, go wars to in one align trying around you one with unique match that out in don't of into competitor. next to and cluster to is in to next if equipment the a to the customer, mix terms provider there, either mentioned to Once in we've industry customers this to we They

lead earlier price and single-digit excess weeks equipment. seeing Therefore, XX that in fact, to key there, out still one increases. there seeing still the getting we're mentioned We're or pricing of we're not questions times not are with I in and for the earlier flooded more out fact pressure market the equipment high

we're So for equipment pricing seeing any not the pressure indications there. of out

Darren McCammon

on thanks good Okay, again congratulations a quarter. and

Brad Murphy

Thanks.

Operator

of Ruggiero Steven from ahead. Please go Pressprich. comes R.W. question next The

Steven Ruggiero

questions that And bad – the to follow-up regards your after question. bankruptcy your of Good quarter? if million number? numbers important. at about well know vendor. expense to guys. debt that, you was future any you out $X.X pointed Should let me as debt light I receivable was past process you're you that a balance But just deemed for with expense I'm ask to wanted in quarter? Thanks quarter it What glad taking on your a my couple this end And experience incurred I for reserved of have that's critical just receivables. customers of second bad are that, you how potential so

Elijio Serrano

questions. Good

that company. debt. now company, That at last that midstream an receivables So was was million were exposure than that consider a you’ll a million a subcontractor Chapter company well-capitalized at someone Right company that off. see satisfy year have to other of $XX obligation a that we one earnings the the September I able and is right we tables make, $X.X to engineering the a the in very unit so got a a in our into with we dispute announcement end that That took we to in a filing. sale the we us. sold little midstream company a to rare midstream make and engineering on their for reconciliation back, XX That not bad for was write-off

and emphasizing So comment that the first other also that the than not us that made moving statement stream and that to really we the being going cash in exposed keeping critical you one supplier has bad historically. and expense is a gas debt made recognizing

Steven Ruggiero

Okay. Thanks, Elijio.

Operator

question comes ahead. Please Eric of The Seeve GoldenTree. go next from

Eric Seeve

few call. the questions. for A Hi guys. Thank you

First item adding items to the the about which that line on understand be to just expense, we So earnings? what back recurring should P&L does debt it bad trying think line through? with respect to flow

Elijio Serrano

question, Good Eric.

booked G&A. it expense sale And the So on were as that's book P&L an then reflected of equipment we the as equipment revenue. in on G&A occurred sales and was sales under originally line the out

Eric Seeve

you out they large you. thank – us for you units. little horsepower tell medium were can laid utilization and units release press about your the topic, talk bit the what for units? the the Different in capacity a you small Okay, Can

Elijio Serrano

Give the is while up anything and me on sites second, And we're that down or I essentially than that recurring large either less maintenance. pull let XXX equipment being me moved utilized a pull between out. unit information, a for fully job being

So the is at small the fleet, the The horsepower the you GasJack equipment equipment And XX%. is around as midsized Eric, right recall, XX%. midsized prior peak was XX%.

almost from September. back historical the up equipment. we’re XX% is And end So to the horsepower utilization large the then midsized at of

Eric Seeve

seemed That going can from in or continue increases. I mix the Is was services in run to compression with on that lastly declined on if terms you slightly, the guys missing? shift what’s am to it at inconsistent contract get function and math which price when end, great. guess, – what I of QX the like side marketplace if pricing a the average looks I QX, I it look from the

Elijio Serrano

around about a $XX, we’ve month think little The the right this I past. the revenue are per size horsepower is bit The averaging Eric of horsepower units, units the unit. Yes. X,XXX big fleet $XX averaging done per unit. per small per math month per $XX units, GasJack in

represent the a is per So revenue month. keeps as increasing and the going fleet down – total big to smaller horse to mix horsepower average relative fleet per

change the mix reflect the lead fleet. – though reinstate So in reflect pricing into

Eric Seeve

fleet versus you small still proportion of is large? disclose Do guys Okay. what the

Elijio Serrano

Yes.

today, the we XX-Q that we in expect So have morning. either will not it tomorrow to if only not later file

when to on have three goes groupings. also investor the you’ll our presentation We that see those we’ll XX-Q be update, in, it able but only

Eric Seeve

Great. Thanks guys.

Elijio Serrano

Eric. it, Appreciate

Operator

Tonet comes next go ahead. [Operator JPMorgan. Instructions] Jeremy question The of from Please

Charlie Barber

is This morning. good for Jeremy. Hey, on Charlie

the touch on the wanted cost side of services. Just to compression

Just thinking come of relative quarter efficiencies, year. kind to and seem beginning a of have bit last especially the this of to lower, where be kind costs quarter about out this

kind what and kind can like of a out next be of good a Just this some go that stripped thinking you of kind more think forward or is. kind efficiencies about run there’s feels rate rate run quarter of

Brad Murphy

horsepower Yes, which One deployed headcount so this ways. we the that done mentioned think technician have different by base couple a allows assets I our flat. kept core and deploying XX,XXX our on we’ve call, much existing with And asset is clients, using But about of costs where be we revenue. part our we have team contributing to to of improved all our efficient. a ERP system, big labor manpower And improved percentage that really that’s as also scheduling led more us margins. our a executing our year planning to

clients their also efficiency margins. gains And to that to some locations, we have we these XXXX We our is benefiting team of CapEx the to do – remaining opportunity deploy as from. continue other increase continue the the key have in core we to expect those

Charlie Barber

helpful. for me. That’s Thanks. one Then more

been a of have peers your of out how getting pushed bit. Some routine more talking kind about some of maintenance, maintenance has been

can deferred you units. seen maintenance these what you’ve on push that how on and really Just much curious

Elijio Serrano

That’s have maintenance, going to obviously practical, the not and then you’ll quality. impact more you Because service units customer defer if downtime really you’re the Charlie. on

the are each runtime unit process rounds rigid and technicians necessary. replacing mechanics very as scheduled of a making to components and hours, on of the we’re fleet So the constantly monitoring and the

defer So practice not capital. to it’s maintenance our

downturn, aftermarket tried into the aftermarket why that services. on Now own operators the push spike capital a out services to lot going and maintenance equipment, side own you of their in they a conserve did saw last that’s cash,

equipment to As the out customers. you of tried services, our lot helped a to if downturn, catch we saw And we try of customers came aftermarket also, up maintenance. that from rebuild our as

it do quality. our we’ve to So not customers cash. service impact conserve seen it We the do do will because it

Charlie Barber

Thanks. Great.

Operator

Wells go Sharon Please Fargo. from next of The ahead. Lui comes question

Sharon Lui

Good Hi. morning.

conversations could Or peak your I good level? just going of a on based level Your increase I year out the think, guess, fairly actually second it you forward, half represent utilization QX continued a like XXXX? to represents sequentially. to customers, with looking do this guess,

Brady Murphy

Yes.

our high high I for that utilization. we and sustain that of we horsepower. the think we're horsepower pretty out We're horsepower, – mentioned, running feel that maxed we our for level as confident well can high utilization at XX% pretty

we As horsepower, we're the applications of the seeing we're some interest and that the developing GasJack, increased for mentioned significant demand. on lower in new

about So needle horsepower end we pretty good the as of the the feel well. utilization being to on move able lower

feel maintaining about or pretty utilization we So good going increasing our forward.

Sharon Lui

from helpful. you on of maybe the producer sentiment on could compression Okay, materially have based touch regions guess core needs and their region, the your second And I each whether quarter? changed any in of if like

Brady Murphy

Yes.

said, by continue activity their basin. major And into linked we And terms the So the as independence. largest position see we're XXXX. And their far core for as them super or to increasing we work closely compression with levels their share them we go our are, to market is our process. in Elijio very Permian customers and planning of needs major, majors

for core two deployed we other the South and horsepower between us, where over the our Permian, Mid-Con. Texas of have The XX% regions

that on know them. Eagle from seen we and the again, years Texas Again, the depends it and from really consistent we've prior customers Ford, link we South linked their super major you're will And what with to to. a In pretty demands.

for horsepower been activity, that's deploying applications recent an not helps? a Midland I we've is – opportunity GasJack the basin independence. SCOOP/STACK our probably our in some Is of really the some of in of year. sorry probably the more lowest It's been of of from an that the SCOOP/STACK of think terms area But lot high where for the lower three.

Sharon Lui

you. Great. Thank

Operator

GoldenTree. question Seeve Eric next from follow-up is The a of

Eric Seeve

like the in a quarters million SG&A was around last two running the on $XX it front, looks quarter. it Just right the

out more it was $XX.X sounds This the if like it million. be bad quarter, like, it debt million. net we $X.X would expense, But

is based implemented? lower savings sustainable about guys have that How SG&A? Just moving cost step that you sort SG&A change trying in Is think that should we understand, forward? to on of

Elijio Serrano

Yes.

model low. you're million think, quarter system and a other you that I and your that's right technologies streamline keep ERP of our building if to that guess I in model structure combination cost the trying $XX above a to use us

Eric Seeve

Great. Eli. Thanks,

Elijio Serrano

Thank you, Eric.

Operator

conference our for the session. remarks. to back like closing concludes over Murphy This I question-and-answer turn any Brady would to

Brady Murphy

your in Okay. appreciate this CSI us for for call. interest call. We joining We concludes again Compressco thank you our and the

Operator

attending concluded. for now today's is The you conference presentation. Thank

disconnect. You may now

CSI Compressco (CCLP) 6 Nov 192019 Q3 Earnings call transcript