USAC - Earnings call transcript Q3 2024 | USA Compression Partners, LP

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Operator

Good morning. Welcome to USA Compression Partners' Third Quarter 2020 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, November 5, 2024.

I now would like to turn the call over to Chris Porter, Vice President, General Counsel and Secretary.

Christopher Porter

Good morning, everyone, and thank you for joining us. our XX, financial XXXX. released quarter for we September ending morning, operational results and the This

call Relations You earnings usacompression.com. as this release find as the can a well a copy recording website of our section of our in at Investor of

this reference non-GAAP management measures. will our call, During certain

You non-GAAP release. to and the in most these definitions will measures earnings of comparable our find reconciliations measures U.S. GAAP

include management's projections matters. forward-looking reminder, expectations statements. will These current our beliefs based are a future and As our include on and forward-looking regarding performance conference statements other call and

results statements. accurate this risk of today, Actual replay. to at may in note review be differ XXXX, release on X, a earnings November information these materially other in only may Please this included the views filings. no speaks longer Please from the that management's factors as and and of public the time morning's provided call

our to I him CEO the and we at within organization, leading CDM and is Clint midstream energy the call through President I compression for USA the space Hanover long to like Before would has history the Compression family. in over period turn time. are a think Green, Clint continually risen Clint Compression, and to working is Compression, energy of I fortunate that transfer stop. FCC next has a and USA rigs of welcome USAC

to Clint. I over that, the call With will turn

Micah Green

past everyone call for and First, Eric morning, hospitality COO everyone, at are Scheller, Chris. Good you thank the over warm joining welcome the want call. Thank thank by to USA I the and I you, month. for our joined on and Chris our

than to join I'm more the ever team. meet and people, some talented opportunity to had this I've excited

to want Second, Long. thank I Eric

he companies the look a what largest forward to compression company As special continuing know, compression that one to the was a single independent started. the from of country. in unit Eric grew leader you all I

the us join Development XX. Strategy have long of Third, E&P brings Chris a of I'm as Vice Paulsen history at Resources. Chris as November Business CFO excited to Senior recently President on Natural most Pioneer and experience

help in I driving space. development experience E&P Chris not USA looking I Compression believe with strategy. continued only experience further to financial given am prior but as financially business the his through and our develop working Chris' the will we long-term continue forward

our Finally, third released to quarter morning. we on this I touch results wanted

cash the allowing Our we ended third records reflect flow average quarter for margin, space, in deploy generating These adjusted a horsepower. revenue compression increased distributable service adjusted an pricing revenue, in environment with supportive gross horsepower. to results as EBITDA, and very continue

We to our for we expect trend from customers. demand services see this compression strong as continue

focus strategically a value. We opportunities will and growth continue evaluate on going to with creating additional unitholder customer forward

discuss quarter to Scheller back-office over Before Eric turning third also I organization the like you call would to on update to an operations. streamline internal to results, initiative

made quarters. the decision in model energy at Compression. transfer have this will shared We There more the on the be USA to come future to implement services

to discuss will to third highlights. I our our over that, the Operating Officer, With Scheller, turn quarter Eric call Chief

Eric Scheller

Thanks, up our improvements continued Clint, third continuing to averaging to horsepower $XX.XX excellent pleased an We high, financial the morning our for per of were drove primarily deliver another the quarter operational and quarter all. results, revenue pricing and to all-time good and unitholders growth.

ago in to the quarters year sequential XX% X% period. Our and revenue increased compared

margins third approximately were XX%. Our quarter

by $XX.X quarter operating average a approximately on borrowings. results, higher activities income $XX.X cash was our outstanding million net third expenses financial million, provided by $XX.X interest $X.X primarily Operating income was Cash the expense net Regarding interest due cash $XX.X sequential and million. XXXX was basis, Net was million. quarter million increased to

notional principal interest cash of interest quarter. by $XXX rate million during mitigated was swap payments under However, fixed expense million rate $X higher our cash the received

monetized for quarter $X.X position million. the in third during We our swap the

to leverage downward reducing trend, its continued ratio also Our X.Xx.

results. operational to Turning

fleet total horsepower of to the was the flat end prior Our million quarter at the quarter. approximately horsepower, essentially X.X

increased primarily horsepower fleet a due on X% conversion by active of current quarter the basis, sequential to to status. revenue-generating idle Our units

average quarter XX.X% prior a Our of essentially the the increase quarter flat third to utilization and XXXX. for the X% quarter to compared was third

maintenance units, expect units consisted $XX.X Third and million capital at existing quarter status. up of of to ongoing the additional Throughout spending ready costs Expansion of conversion of equipment primarily fleet anticipate deployment those idle reconfiguration new active organic expansion expenditures fleet idle to were XXXX and below expenditures capital builds. capital current we growth assets were capital also uncontracted the horsepower and million. $X.X XX,XXX remainder make XXXX, of our of we of

would XXXX. I our like full financial Finally, guidance for to the reaffirm year

$XXX As a net to $XXX is million million. flow is $XXX and $XXX $XXX cash million adjusted our EBITDA $XXX to reminder, range is income range to million, distributable million million,

full Additionally, the are expenditures XXXX to a to idle active the and customer the costs on $XXX to increased expansion by primarily active preparing cost returned redeployment capital million units year we compression $XXX our for that increasing for with million, fleet the are due conversion. between associated and

I with that, call And for Clint back concluding the turn remarks. to will

Micah Green

my meet at and to enjoyed weeks I've earlier seeing Thank career you, Eric. getting some been Compression at in My from many first USA so CDM. folks have few wonderful incredible.

Form XX-Q to afternoon. our with expect the We SEC as early this file as

we that, the to will with And open questions. call

Operator

from with question Jeremy JPMorgan. first Instructions] Your line [Operator of Tonet the comes

Elias Jossen

some pulled to a spend? is should spend we raise, wanted year? next relatively, of This expect for start Jeremy. should about Or CapEx I maybe on lower on the and thinking Eli forward? XXXX we how this this for Is interpret

and Just run kind and rate where the you CapEx right see thinking business takes now? of growth puts about for opportunities growth spend

Micah Green

to normal a is is this out at -- good And Yes, going 'XX we fourth we'll which question. Clint. lay our earnings plan quarter we next year. our stated Yes, are times, capital -- that's

opportunities to its and company investors. become through moving disciplined for more become year, to that look also next capital but the accretive we'll will -- We

Elias Jossen

Fair mentioned remarks, opening just maybe per the then and to pricing, metrics. to I that's market. on translating know dollars the broader continuing compression we're in horsepower enough. which those strong see strong And you

So upside those Or to can terms should be a continue high might just think as of nearing how about levels in well? to go? ceiling metrics we these

Eric Scheller

Eli, this Eric. is

I of through think trend see the the really meaningful for I that structural compression don't pulls gas system. the remains revenue. flows it's we're demand Frankly, changing any robust, to trend the supporting market strong, seeing the

people work for that the it hold want for We really to And continue to see making market us. horsepower, continuing want aggressively to longer.

Operator

Citi. line from comes question Irwin next Your the of with Doug

Douglas Irwin

changes touch costs, the idled to strategy conversion maybe you that quarter. aboard, forward? costs builds capacity active the you if much pointed that persistent just And could are remind just about strategy of the way of this the and you I'm some if back have idle kind online? that moving they some you maybe could us more wanted conversions Welcome on versus still if think these be if And the brought Clint. then new of of curious how increased I fleet to across

Eric Scheller

This is Eric.

of a it So easier into down pieces. couple we break

continues rates utilization run we've had. You highest saw ever at to

stuff. the horsepower almost of large have at available on We our end near the

customers. we get to from capital in are working new, to always customer opportunity optimize either serve buy to out order So to looking our units buy for to

to that. We work through continue

put we the churn with redeployed, the enhance the churn before they're for did higher advance see concerning reasons, and went technology the that operational units second the environmental capital, we those optimized through back have coming amount have prices, When come we've as has that happy to asset system to other think the a we're recognizing I On that they do large or different of do different to requirements. system. coming go at We up regions question them. units have out been to fleet,

Douglas Irwin

realize moving a helpful. Got But it. you into you're just should here job. term. maybe for And That's what can only just and just excites question strategic the near over maybe the you see few business any if I'm if surprised higher-level broader weeks changes most anything could Clint, Maybe talk you if a forward? then about the expect we joint the wondering then you, maybe about

Micah Green

Yes.

is thing ago. Compression, I here I've CDM -- a going which USA so lot think most with huge XXXX, So I with became see back years of that believe see in the to exciting opportunity out and first gotten off, started I started folks I there's I that forward.

we push I administration, demand the that change industry. get if think today's drug that depending electrification, see administration, could for our LNG with different for dual huge permits our we a we administration a technology across stay today, could I export have with lifted, think and bigger have on election and the opportunity drive a for the day, that if way which we huge in we

Operator

Raymond of James. question Jim the comes from next with Your line Rollyson

James Rollyson

Welcome the Clint. back circling CapEx. Maybe aboard also, just to

guys, So basin another. over get from said, from this, units just transitioning to time one through you trying time and time, as you to go to understand obviously, back

just curious of change horsepower in this relatively Just It's case, what a kind impacted. how happened was large much CapEx. in

a kind like somewhat that get what of unexpected this outside But normally units a bit situation and color So of more a happened I and what situation of feel was see? the maybe little you back. got just around this is to you little trying one-off if

Christopher Porter

drivers Eric the field Scheller -- a more you may I ended think was so any off drop driver that the than or in just that answering let out and and Yes. be of that expected brought to the increase. add Eric, the for were equipment or And and CapEx cost think I But in budgeted I'll was was field the being main there to reworked the that was the that start is to I'll one -- that. this CapEx or of the for pass up it here second. was was in yards of main

Eric Scheller

Yes.

were we budgeted drove the to it think was other capital use have there I We're always how that think in deploy that parties. thing that we about from was we opportunistic some units first are third that purchased of and opportunistic to quarter and with units did EBITDA. our the not capital that was a big in estimates. in help revenue growing included pretty gas, These the ability we when customer, move we

And year. other capital the was associated burn so that's the for that the with activity

James Rollyson

maybe so future -- terms just on presumably some active have you revenue yet, been can through there -- and get in And deployed Any the magnitude the this program. know once return step-up this be, nice help XX justifiable as not you this color us in on just money. it's has think we CapEx of you spend presume, is benefits? horsepower any based But capital it. of kind I you'll history, I I capital or -- how assume should Got a profit spend wouldn't profile about your but

Christopher Porter

Yes.

we're assets that our we with us. those would for certainly Otherwise, return the commensurate the spend that established for think that I not general partners hurdles capital.

The come other how impacts quarter, think first it and will we in indicated. think, to part this I out, for rolls the about Clint how as previously had 'XX where that

James Rollyson

bit one seeing just Got quarter, this a just that's it. or one. And something if there's if like there revenue last one-off Related if higher or then that's this there's than usual party -- unusual is sustainable? was little a anything more

Christopher Porter

Porter. Chris it's Jim,

seeing our causing going Energy little some what's as they customers, are customer what there of see to obviously really of ours Transfer bigger acquisition you're they ours. continue forward think I remain and of And bigger WTG that's as a that become is bit they you'll customer and a that. a acquiring

Operator

Moreen comes with question Gabe from of next the Your Mizuho. line

Gabriel Moreen

the I here was that just G&A in the be a services relationship bit bit little on a terms about Transfer the ask commercial line? I little little Clint. bit. shared going the it's last previewed agreement. is Energy of strictly to know to know wanted there. question I But a

thing you I'm the could magnitude of just see see sort bit curious on services a how more proceeding? So if and you timing, expand shared

Micah Green

But become as Gabe, thank on. shared shared arms do it, Yes, and service part but company. guidance. that. energy for We'll see an our we it's of with to the deeper We're bigger first will a service run quarter with what you a -- early it around trying or as get we forward explain still Yes, move little have dig but that. come that a and a we'll more probably we in think support transfer separately

Gabriel Moreen

within M&A of approach, I talk couple about maybe of that can about bit been kind there's And M&A obviously larger But over talking compression, know on then of horsepower. in little purchases couple deals ask if opportunistic your I last have and of been there's thinking bigger quarters. down gone a that the and a

to just to be of that. And we Just might leave it approach what appetite that. I'll or curious something kind your have like at

Micah Green

sir. Yes,

So for -- look we but comment M&A, opportunities will so. don't I we on but say

Operator

Thank and may time. all now question no concludes And disconnect. joining, that at for this you further today's There's call. you

USA Compression Partners (USAC) 5 Nov 242024 Q3 Earnings call transcript