CELP - Earnings call transcript Q1 2019 | Cypress Environmental Partners, L.P.

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Operator

Good day, ladies and gentlemen, and welcome to the Cypress Energy Partners First Quarter Investor Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host for today, Mr. Richard Carson. Sir, the floor is yours.

Richard Carson

you. Thank to Partners welcome investor quarter Cypress call. conference the and first Energy XXXX Hello, Carson, Vice the Counsel. Richard am I Senior President General and With President Boylan, Jeff Pete us and today and CEO; our Herbers, Chief and Chairman Vice Financial Officer. our are financial quarter release Web earlier our cypressenergy.com posted our and XXXX released the results We site, today. first press on the release, you regarding statements. press will disclaimer In forward-looking find an important it is essential component is and important an remarks, it. that disclaimer This our review you of non-GAAP in measures Accepted we Principles. the to press measures included various financial are Also reconciled that release have under Accounting Generally reconciliations the Those appear release. toward of the press end With that, turn over call to Pete. I will the

Pete Boylan

you, Thank had good team. quarter, for good you your you appreciate valuable proud and time I a all very am in I of We joining Richard, and our today company. thank and us and interest morning. our

of first to due at energy [of slower the quarter world and the seasonality start year. a is [ph] how The our business companies each quarter work] historically of the

Our quarter part, pipeline In a award history, is compared in year. XX% prior largest revenue, inspection wining of to to the the this and fourth gross which in a increase through our our in XX% the year. contract segment a margin of result experienced as 'XX in and over expected began increase continue

especially adverse generally winter wet not the the by delayed Dakota. segments conditions weather expectations Southwest numerous with driven performed the have primarily that projects, other start in North Our up to weather QX, our in and the in of

through a the the results these and remain to strong the year. have expect quarter, of second segments We solid remainder should

flow. an XX% and EBITDA to quarter XX% in of results, increase cash increase strength our partners, segment's increase the pipeline in we still XXX% limited distributable first had impressive in With adjusted a attributable revenue, inspection

enjoy offer. a the there and long-term and continue believe level customer We base, high for services our strength is we firmly in diversity of to that demand

in acquisitions 'XX. completed our Energy disclosed, Cypress sponsor, the As second-half Holdings two previously of

that in prices have that services for is will and In a believe of dynamics supply we obviously once completed the both is the lives. technology, oil Despite intend make We serve, entering market developmental new partnership, businesses industry. offering have on customers from are end we water us better increase process also and required ILI organic year. pipeline into These decrease of could strategy winning drive solid, continue oil we to and improved services in crude inspection, We QX converted centered segments, this remain goals. the by these capable helping talent, compared everyday The part generation continue to business customers. we including providing in their inline several the acquisitions with of and different move our solid excited pipeline with service and equipment progress services. returns to which capital. is all certain energy global be owners industry before and Cypress 'XX last about and rental, has confident high-definition on into We 'XX, the municipal the margin the mission-critical higher our invest essential deliver offshore will of next of expand manage entirely the attractive that to partnership of demand remain that equipment outlook and a water to remain in growth, [indiscernible] treatment, municipal an crude regulated the prices of both operators our number assets margins, and integrity the industry technology water acquisitions

We depth attractive leverage and breadth grow our leader trailing these two some that America and strong opportunities growth in organic modest EBITDA, to remain balance with a at growth. XX-month solid industry, dropdown our the integrity sheet in have and the of acquisitions, inspection X.X times offerings. We continue service to a North and and enhance with

aging eventually represent already truly be of future unitholders of ownership the given revenue. with resume will to minority their municipal share fully-aligned highlights. income, over partnership We increasing with in continue infrastructure be will I inspection of to time, are on industry. inline to the old. insiders and the call America strategically At services position over distributions. pay our continue long-term activities. to eligible the industry of Management focus the North additional infrastructure XX% also also opportunity ownership to so our taxes The over will common whereby is pipeline I to industry MLP water [ph] rare inspection can our and qualifying should have our inspection on partnership, and believe that half now the future the for excited the approximately future our growth, turn poised is required integrity he we for common which financial XX% [addition] industry services. XX% our services municipal The of energy These our the and to XX is attractive years preferred to that aforementioned of water large some over Jeff remain those us Herbers, upon not units, this serve The VP conversion given and acquisitions continue the services. our CFO, in

Jeff Herbers

in per XX% of of yielded first XXXX for $XX.X of in The We inspectors to in the in filed our of XX% the results pipeline that release our first later Pete. XXXX and compared would are in segment, quarter X,XXX note that the inspection also average of of deployed an than prior earnings will the operations X,XXX the first XXXX, of inspectors week first $XX.X quarter you, outlined our increase was which be XX-Q higher million quarter an over XXXX. quarterly quarter the or year. million, of I the headcount today. revenues U.S. Thank

several quarter to $X.X revenues which pipeline million the scheduled the process large segment million to Our quarter that were first delayed begin XXXX, first primarily compared the during projects was decrease of The generated of services first XXXX. and in adverse during quarter XXXX. of of $X to weather, due

the a margin other that virtually capital MLPs. that remains a second on for have differentiator model first the requirements. expenditures a of began the with consolidated We of water of quarter business This have were million, capital EBITDA attractive generated the On The have for $X.X capital XXXX, in expenditure percentage maintenance we reflecting our a gross backlog we key services XX% in businesses segment portfolio of basis, maintenance expenditures. quarter maintenance working in limited XX% healthy of all projects of XXXX. and us versus margin an first quarter nominal

primarily year XXXX different of examination units. Our cash for expenditures of with growing business. capital business solid operating expect remainder non-destructive related first our supporting the our the to growth the results I quarter were for

make XXXX. to their past from progress continue result a We collecting PG&E of in January as amounts due of bankruptcy filing

and to strong continue call with Pete. And turn serve We relationship. will the that, a working back them I have to over

Pete Boylan

results. Thanks, Jeff. We're these pleased to report

opportunities to our will great customer have segment, remain our especially as results look We growth future in be at the and in a year expand organic the Q filing We base. our we optimistic exciting later XXXX. following Pipeline we Inspection today, the

We your significant making call, MLPs the in CapEx. our investments us and currently have our partnership. hire The like United appreciate now business. We the customers serve of time, remains one ability that continue XX% or taking we valuable States in of than this to and most talent your interest without that exciting improve Canada the did that Operator, services. Most available and less substantial and not new grow may to begin and require organically we investment can fact of the more grow utilize to questions. joining our

Operator

[Operator go Dearnley, Thank first to We Instructions] Longport Richard you. will Partners.

Richard Dearnley

into asset? do the How equipment business MLP-able rental turn morning. Good an you

Pete Boylan

Sure. Good morning.

a a compressor rental provide some combination meets income, say, MLP service equipment, or that labor a pump a qualifying, speaking, equipment So, or a not generally qualifying would dryer of when just on standalone qualifying. that certain renting basis a be as iron of definitions be can and or or you

So of we rental which, service, And some reposition it marry we this equipment it lines particular primary other and of four an question. that answer the business, in believe how one with to there is but that's equipment of acquisition, lines geographies country in that's different of to business, opportunity ultimately and was your them, effectively happens. have of the to

Richard Dearnley

or that a the couldn't in couldn't provide… new technology And as get that see. have don't you I or ILI currently add, could would get you acquisition so, partnership, the something is

Pete Boylan

sorry. ahead. I'm Go

Richard Dearnley

[enough] Oh, [ph]. yes. That's

Pete Boylan

Okay.

our inline pigging desired long have people base. smart we call, So, to customer inspection, also which to some bring

to of continues And people more generation or pigging amount six about And moving talking combination about All imagine, of inspection. as think resolution. consumption, processing about entering of into think power of efficient of technology microprocessors and our might we're is smart fifth it it and the faster, communications. spend money getting -- smaller XG, its customers probably as and substantial technology a inline ILI industry you about ILI and consumption, doing getting think as evolve; XG with power wireless this or

a of So, see think when it that to the that a see have XXXP, And you you a in ultra see can going you see can you people your couple is can as for pit, possible, at or the an ADI, occurring. the that's can leapfrog def where XK if the maybe that see day, back smart of be but end pipeline, pipeline, corrosion. tool there's to industry highest crack, run you ILI like a resolution probably you you in the TV that dent, XX own want high television, pig

the think number that better the it have a the looked so, instead principally Leakage than majority cost at moved ILI the that will be will pioneers of attractive a were the very to of we higher, And kind some we best-in-class industry a opportunity there. of we Flux business bringing that leapfrog really at with we the clients, years, substantial tool over well-received from we Magnetic found a opportunities called ILI out next scratch, talented market it's technology, of by resolution to in had acquisition be the the where of detection MFL, of in team competitors building people looked because early will and our

Richard Dearnley

Would something do that I issue another see. for acquisition? involve preferred the pay or plan then else? And how Thank you. to you

Pete Boylan

to of in be this determined. investors plan we a at of kind any but It's basically to that Directors Committee when simple, transaction, that it Obviously, we the to made cost. dropdown we Conflicts of Board acquired it be we we offer said would involved have company

product company, sense and hope to speak into our the make and come doing doesn't we generating available until in or we tools have the to and flow, it bring taking at now begins is incremental flow, development position and So, as or privately to and cash we're cash Obviously to other that our capacity the we to forth. the business ATM to units with time clients. holding debt obviously work start building generating be flow, it this the market are offering Cypress. tools back with obviously associated the have pipe so us will we'll cash a At

industry. speculate entire early relative and provided the So, margin many in world, pipeline services nice this currency might the ILI, kind the highest the inspection to of it's service are of of to -- what the economics that integrity it's and is in the other it but technology be, world really of really the composition got too

Richard Dearnley

I see. Thank very much. you

Pete Boylan

Thank you.

Operator

[Operator Instructions]

Pete Boylan

don't Well, questions. other it we any like Operator, looks have

great So, thank day. have a and everybody, you

Operator

Ladies you. will thank teleconference. conclude participation. for today's and you this Thank We gentlemen, your

day. your great a this You may and time lines have disconnect at

Cypress Environmental Partners (CELPQ) 13 May 192019 Q1 Earnings call transcript