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8-K - FORM 8-K - American Midstream Partners, LP | h84551e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE:
American Midstream Partners, LP Reports Financial Results for the
2011 Second Quarter
2011 Second Quarter
Revenue increased 37% compared to the prior-year quarter
Adjusted EBITDA increased 26% compared to the prior-year quarter
Throughput increased 24% compared to the prior-year quarter
Completed IPO of 3,750,000 units on August 1, 2011
Adjusted EBITDA increased 26% compared to the prior-year quarter
Throughput increased 24% compared to the prior-year quarter
Completed IPO of 3,750,000 units on August 1, 2011
DENVER, CO September 9, 2011American Midstream Partners LP. (NYSE: AMID) today
reported financial results for the second quarter period ending June 30, 2011.
Total revenue for the second quarter of 2011 was $65.6 million, an increase of $17.8 million
or 37% compared to $47.8 million for the prior-year period. The increase was largely
attributable to higher realized NGL prices and higher throughput volumes in the
Partnerships Gathering and Processing segment and a new fixed-margin contract in its
Transmission segment.
Gross margin for the second quarter of 2011 was $10.6 million, an increase of $1.7 million
or 19% compared to $8.9 million for the prior-year period. This increase was primarily due
to higher realized NGL prices, increased throughput volumes and increased plant inlet
volumes in the Gathering and Processing segment.
Adjusted EBITDA for the second quarter of 2011 was $4.9 million, an increase of $1.0 million
or 26% compared to $3.9 million for the prior-year period.
Net loss for the second quarter of 2011 was $4.2 million compared to a net loss of $2.9
million for the prior-year period. Net loss per common unit for the second quarter of 2011
was $0.74 per unit compared to pro forma net loss of $0.56 per common unit for the
prior-year period. The increase in net loss was primarily due to a $1.1 million increase in
SG&A expenses and $1.7 million of non-recurring equity compensation expenses, partially
offset by the $1.7 million increase in gross margin.
Commenting on the quarter, Brian Bierbach, President and Chief Executive Officer said, We
are very happy to be reporting a solid second quarter, particularly in light of the fact
that
this is our first financial report as a public company. Our financial results reflect our
focus over the last year to add volumes to our systems, execute on commercial opportunities,
and improve operating efficiencies.
American Midstream benefits from a diversified asset base which produces a stable source of
cash flow and growth opportunities, Bierbach continued. Our recent IPO has provided us
with significant liquidity to enhance our existing assets and pursue attractive growth
opportunities. We believe that American Midstream is well positioned in the midstream
sector to provide our investors with many years of meaningful distribution growth.
REVIEW OF SEGMENT PERFORMANCE
Segment gross margin for Gathering & Processing and Transmission increased to $10.6 million
in the second quarter of 2011 from $8.9 million in the prior-year period.
Gathering and Processing The Gathering and Processing segment includes natural gas
transportation and gathering, natural gas processing and treating, and selling or delivering
natural gas and NGLs to various markets and pipeline systems.
Segment gross margin for Gathering & Processing was $7.9 million for the second quarter of
2011, compared to $5.6 million for the prior-year period.
Total throughput volumes for the Gathering & Processing segment averaged 231.3 MMcf per day
of natural gas, and processed NGLs averaged 47.9 thousand gallons per day for the second
quarter of 2011, compared to averages of 166.9 MMcf per day of natural gas and 22.7 thousand
gallons of processed NGLs for the prior-year period.
The increase in segment gross margin was primarily due to the increase in throughput volumes
and higher realized NGL prices.
Transmission The Transmission segment transports and delivers natural gas from producing
wells, receipt points or pipeline interconnects for shippers and other customers.
Segment gross margin for Transportation was $2.7 million for the second quarter of 2011,
compared to $3.3 million for the prior-year period. Total transportation throughput volumes
for the Transportation segment averaged 314.1 MMcf per day of natural gas for the second
quarter of 2011, compared to an average of 274.1 MMcf per day of natural gas for the
prior-year period.
The decrease in segment gross margin was primarily due to additional transportation fees
recognized in the second quarter of 2010.
Conference Call
American Midstream will conduct a conference call and webcast to discuss its financial
results on Monday, September 12, 2011, at 11:00 a.m. Eastern Time. The call may be accessed
live at the investor relations section of the American Midstream website at
www.americanmidstream.com. The live call may also be accessed by dialing 866-770-7125 for
domestic users or 617-213-8066 for international users. The passcode for both phone numbers
is 17114748.
A replay of the audio webcast will be available shortly after the call on American
Midstreams website. A telephonic replay will be available through October 15, 2011 by
dialing 888-286-8010 for domestic users or 617-801-6888 for international users. The
passcode for both phone numbers is 77227686.
Non-GAAP Financial Measures
This press release, and the accompanying tables, include both financial measures in
accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP
financial measures, including Adjusted EBITDA and gross margin. The tables attached to
this press release include reconciliations of these non-GAAP financial measures to the
nearest GAAP financial measures. In addition an Explanation of Non-GAAP Financial Measures
is set forth in Appendix A attached to this press release.
About American Midstream Partners, LP
Denver-based American Midstream Partners, LP is a growth-oriented limited partnership formed
to own, operate, develop and acquire a diversified portfolio of natural gas midstream energy
assets. The company provides midstream services in the Gulf Coast and Southeast regions of
the United States. For more information about American Midstream, visit
www.americanmidstream.com.
Forward Looking Statements
This press includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements relate to, among other things, projections of operational volumetrics and
improvements, growth projects, cash flows and capital expenditures. We have used the words
anticipate, believe, could, estimate, expect, intend, may, plan, predict,
project, should, will, potential and similar terms and phrases to identify
forward-looking statements in this press release. Although we believe the assumptions upon
which these forward-looking statements are based are reasonable, any of these assumptions
could prove to be inaccurate and the forward-looking statements based on these assumptions
could be incorrect. Our operations involve risks and uncertainties, many of which are
outside our control, and any one of which, or a combination of which, could materially
affect our results of operations and whether the forward-looking statements ultimately prove
to be correct. Actual results and trends in the future may differ materially from those
suggested or implied
by the forward-looking statements depending on a variety of factors which are described in
greater detail in our filings with the SEC. Please see our Risk Factor disclosures included
in our prospectus dated July 26, 2011 that was filed with the SEC on July 27, 2011. All
future written and oral forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by the previous statements. We
undertake no obligation to update any information contained herein or to publicly release
the results of any revisions to any forward-looking statements that may be made to reflect
events or circumstances that occur, or that we become aware of, after the date of this press
release.
American Midstream Partners, LP and Subsidiaries
Unaudited Consolidated Balance Sheets
(In thousands except unit amounts)
(In thousands except unit amounts)
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 62 | $ | 63 | ||||
Accounts receivable |
1,416 | 656 | ||||||
Unbilled revenue |
21,347 | 22,194 | ||||||
Risk management assets |
234 | | ||||||
Other current assets |
1,941 | 1,523 | ||||||
Total current assets |
25,000 | 24,436 | ||||||
Property, plant and equipment, net |
140,136 | 146,808 | ||||||
Risk management assets long term |
158 | | ||||||
Other assets |
1,577 | 1,985 | ||||||
Total assets |
$ | 166,871 | $ | 173,229 | ||||
Liabilities and Partners Capital |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 1,187 | $ | 980 | ||||
Accrued gas purchases |
19,468 | 18,706 | ||||||
Current portion of long-term debt |
8,000 | 6,000 | ||||||
Other loans |
233 | 615 | ||||||
Risk management liabilities |
678 | | ||||||
Accrued expenses and other current liabilities |
4,290 | 2,676 | ||||||
Total current liabilities |
33,856 | 28,977 | ||||||
Risk management liabilities long term |
16 | | ||||||
Other liabilities |
8,620 | 8,078 | ||||||
Long-term debt |
52,700 | 50,370 | ||||||
Total liabilities |
95,192 | 87,425 | ||||||
Commitments and contingencies |
||||||||
Partners capital |
||||||||
General partner interest (0.1 million units outstanding as of June 30, 2011 and December 31, 2010) |
2,193 | 2,124 | ||||||
Limited partner interest (5.4 million common units outstanding as of June 30, 2011
and December 31, 2010) |
69,430 | 83,624 | ||||||
Accumulated other comprehensive income |
56 | 56 | ||||||
Total partners capital |
71,679 | 85,804 | ||||||
Total liabilities and partners capital |
$ | 166,871 | $ | 173,229 | ||||
American Midstream Partners, LP and Subsidiaries
Unaudited Consolidated Statements of Operations
(In thousands, except per unit amounts)
(In thousands, except per unit amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue |
$ | 66,030 | $ | 47,790 | $ | 133,369 | $ | 102,502 | ||||||||
Realized gain (loss) on early termination of commodity derivatives |
(2,998 | ) | | (2,998 | ) | | ||||||||||
Unrealized gain (loss) on commodity derivatives |
2,602 | | (972 | ) | | |||||||||||
Total revenue |
65,634 | 47,790 | 129,399 | 102,502 | ||||||||||||
Operating expenses: |
||||||||||||||||
Purchases of natural gas, NGLs and condensate |
55,413 | 38,843 | 110,366 | 83,807 | ||||||||||||
Direct operating expenses |
3,105 | 3,346 | 6,163 | 6,273 | ||||||||||||
Selling, general and administrative expenses |
2,663 | 1,560 | 5,152 | 3,258 | ||||||||||||
Equity compensation expense |
2,184 | 537 | 2,658 | 791 | ||||||||||||
Depreciation expense |
5,170 | 4,982 | 10,207 | 9,948 | ||||||||||||
Total operating expenses |
68,535 | 49,268 | 134,546 | 104,077 | ||||||||||||
Operating income (loss) |
(2,901 | ) | (1,478 | ) | (5,147 | ) | (1,575 | ) | ||||||||
Other expenses (income): |
||||||||||||||||
Interest expense |
1,281 | 1,375 | 2,545 | 2,732 | ||||||||||||
Net income (loss) |
$ | (4,182 | ) | $ | (2,853 | ) | $ | (7,692 | ) | $ | (4,307 | ) | ||||
General partners interest in net income (loss) |
(84 | ) | (57 | ) | (154 | ) | (86 | ) | ||||||||
Limited partners interest in net income (loss) |
$ | (4,098 | ) | $ | (2,796 | ) | $ | (7,538 | ) | $ | (4,221 | ) | ||||
Limited partners net income (loss) per common unit |
$ | (0.74 | ) | $ | (0.56 | ) | $ | (1.36 | ) | $ | (0.85 | ) | ||||
Weighted average number of common units used in computation of limited partners
net income (loss) per common unit |
5,525 | 4,993 | 5,546 | 4,973 | ||||||||||||
American Midstream Partners, LP and Subsidiaries
Reconciliation of Adjusted EBITDA to Net Income
(In thousands)
(In thousands)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | ||||||||||||||||
Reconciliation of Adjusted EBITDA to Net Income (Loss) |
||||||||||||||||
Net income |
(4,182 | ) | (2,853 | ) | (7,692 | ) | (4,307 | ) | ||||||||
Add: |
||||||||||||||||
Depreciation expense |
5,170 | 4,982 | 10,207 | 9,948 | ||||||||||||
Interest expense |
1,281 | 1,375 | 2,545 | 2,732 | ||||||||||||
Realized gain (loss) on early termination of commodity derivatives |
2,998 | | 2,998 | | ||||||||||||
Unrealized gain (loss) on commodity derivatives |
(2,602 | ) | | 972 | | |||||||||||
Non-cash equity compensation expense |
570 | 305 | 905 | 557 | ||||||||||||
Special distribution to holders of LTIP phantom units |
1,624 | | 1,624 | | ||||||||||||
One-time transaction costs |
(7 | ) | 133 | 281 | 207 | |||||||||||
Adjusted EBITDA |
4,852 | 3,942 | 11,840 | 9,137 | ||||||||||||
Reconciliation of Gross Margin to Net Income
(In thousands)
(In thousands)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | ||||||||||||||||
Reconciliation of Gross Margin to Net Income (Loss) |
||||||||||||||||
Gross margin |
10,617 | 8,947 | 23,003 | 18,695 | ||||||||||||
Adjust for: |
||||||||||||||||
Realized gains (losses) included in revenue |
(2,998 | ) | | (2,998 | ) | | ||||||||||
Unrealized gains (losses) included in revenue |
2,602 | | (972 | ) | | |||||||||||
Direct operating expenses |
3,105 | 3,346 | 6,163 | 6,273 | ||||||||||||
Selling, general and administrative expenses |
2,663 | 1,560 | 5,152 | 3,258 | ||||||||||||
Equity compensation expense |
2,184 | 537 | 2,658 | 791 | ||||||||||||
Depreciation expense |
5,170 | 4,982 | 10,207 | 9,948 | ||||||||||||
Interest expense |
1,281 | 1,375 | 2,545 | 2,732 | ||||||||||||
Net income (loss) |
(4,182 | ) | (2,853 | ) | (7,692 | ) | (4,307 | ) |
Appendix A
Note About Non-GAAP Financial Measures
Adjusted EBITDA and gross margin are not financial measures presented in accordance with
GAAP. We believe that the presentation of these non-GAAP financial measures will provide
useful information to investors in assessing our financial condition and results of
operations. Net income is the GAAP measure most directly comparable to each of Adjusted
EBITDA and gross margin. Our non-GAAP financial measures should not be considered as
alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP
financial measures has important limitations as an analytical tool because it excludes some
but not all items that affect the most directly comparable GAAP financial measure. You
should not consider Adjusted EBITDA or gross margin in isolation or as substitutes for
analysis of our results as reported under GAAP. Because Adjusted EBITDA and gross margin may
be defined differently by other companies in our industry, our definitions of these non-GAAP
financial measures may not be comparable to similarly titled measures of other companies,
thereby diminishing their utility.
We define Adjusted EBITDA as net income, plus interest expense, income tax expense,
depreciation expense, certain non-cash charges such as non-cash equity compensation,
unrealized losses on commodity derivative contracts and selected charges that are unusual or
non-recurring, less interest income, income tax benefit, unrealized gains on commodity
derivative contracts and selected gains that are unusual or non-recurring, less
interest income, income tax benefit, unrealized gains on commodity derivative contracts and
selected gains that are unusual or non-recurring. Adjusted EBITDA is used as a supplemental
measure by our management and by external users of our financial statements such as
investors, commercial banks, research analysts and others, to assess:
| the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; | ||
| the ability of our assets to generate cash sufficient to support our indebtedness and make cash distributions to our unitholders and general partner; | ||
| our operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing or capital structure; and | ||
| the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities. |
We define gross margin as the sum of segment gross margin in our Gathering and Processing
segment and segment gross margin in our Transmission segment. We define segment gross margin
in our Gathering and Processing segment as revenue generated from gathering and processing
operations less the cost of natural gas, NGLs and condensate purchased. We define segment
gross margin in our Transmission segment as revenue generated from firm and interruptible
transportation agreements and fixed-margin arrangements, plus other related
fees, less the cost of natural gas purchased in connection with fixed-margin arrangements.
Gross margin is included as a supplemental disclosure because it is a primary performance
measure used by our management, as it represents the results of service fee revenue and cost
of sales, which are key components of our operations. As an indicator of our operating
performance, gross margin should not be considered an alternative to, or more meaningful
than, net income as determined in accordance with GAAP. Our gross margin may not be
comparable to a similarly titled measure of another company because other entities may not
calculate gross margin in the same manner. Effective January 1, 2011, we changed our segment
gross margin measure to exclude unrealized non cash mark-to-market adjustments related to
our commodity derivatives. For the three and six months ended June 30, 2011, $2.6 million
and ($1.0) million, respectively, in unrealized gains (losses) were excluded from our
Gathering and Processing segment gross margin. Effective April 1, 2011 we changed our
segment gross margin measure to exclude realized commodity derivative early termination
costs. For the three and six months ended June 30, 2011, ($3.0) million in unrealized gains
(losses) were excluded from our Gathering and Processing segment gross margin.