Q1 2024 USA Compression Partners LP Earnings Call Transcript
Key Points
- USA Compression Partners LP reported another quarter of record results, including record revenues, adjusted gross margin, adjusted EBITDA, distributable cash flow, average revenue generating horsepower, and average revenue per revenue generating horsepower.
- The company successfully issued $1 billion of 7.125% senior notes due 2029, which was substantially oversubscribed, indicating strong market confidence.
- USA Compression Partners LP managed to opportunistically refinance debt, redeeming $725 million of senior notes due 2026, which is expected to simplify the capital structure and reduce future financial risk.
- The conversion of Series A preferred units to common units is anticipated to enhance the public float and potentially improve the stock's liquidity and marketability.
- Operational efficiency remains a focus, with the company deploying new large horsepower units under long-term contracts, which should support stable future cash flows.
- The distributable cash flow coverage ratio slightly decreased to 1.41 times from the previous quarter's 1.48 times, primarily due to one-time events.
- The leverage ratio increased to 4.27 times, up from the previous quarter's 4.1 times, due to the front-loaded purchase of new units, although it is expected to trend back towards 4.0 times.
- USA Compression Partners LP faces ongoing economic and geopolitical uncertainties, including inflation concerns and international conflicts, which could impact the business environment.
- The company has adopted a cautious approach for 2024, focusing on internal improvements and reduced growth, which may limit its ability to capitalize on external opportunities in the short term.
- Despite the refinancing achievements, there remains a significant amount of debt on the balance sheet, with $2.49 billion of indebtedness as of the end of the quarter.
Good morning. Welcome to the USA Compression Partners' first quarter 2024 earnings conference call. During today's call, all parties will be in a listen-only mode. At the conclusion of management's prepared remarks, the call will be opened for Q&A. (Operator Instructions) This conference is being recorded today, May 7, 2024.
I now would like to turn the call over to Chris Porter, Vice President, General Counsel and Secretary. Please go ahead.
Good morning, everyone, and thank you for joining us. This morning we released our operational and financial results for the quarter ending March 31, 2024. You can find a copy of our earnings release as well as a recording of this call in the Investor Relations' section of our website at usacompression.com.
During this call, our management will reference certain non-GAAP measures. You will find definition and reconciliation of these non-GAAP measures to the most comparable US GAAP measures in our earnings
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
