Cypress Energy Partners, L.P. 8-K

Exhibit 99.1

Cypress Energy Partners, L.P. Announces Second Quarter 2017 Results

TULSA, Oklahoma -- (BUSINESS WIRE)—August 14^th, 2017

Cypress Energy Partners, L.P. (NYSE:CELP) today reported:

Peter C. Boylan III, CELP’s Chairman and Chief Executive Officer stated, “We are encouraged by the improved second quarter results compared to prior year and sequentially compared to the seasonally low first quarter of 2017. We have continued to focus on growing and diversifying our customer base and during the quarter we added 20 new customers across our three business segments. Average domestic inspector headcounts continue to improve sequentially and compared to the prior year. Our hydrostatic testing utilization rate has materially improved and our backlog rose over 33.5% in the second quarter. Our water volumes improved sequentially, although they continued to lag below prior year volumes. 80% of our SWDs are in the Bakken region, the recovery of which has materially lagged that of the Permian basin, but a significant number of DUCs exist in both basins that, when completed, should benefit us. Additionally, in July one of our North Dakota SWD facilities was struck by lightning, leading to a fire and additional insured damage at that location. On a positive note, our inspection clients are once again starting new projects and increasing their spending on maintenance and integrity work that was deferred when possible during the two-year industry downturn in 2015 and 2016. We remain fortunate that we have a business model that requires a very modest amount of maintenance capital expenditures. During the quarter, we reached an agreement with an existing customer to develop a new pipeline connecting over a half dozen new oil wells in North Dakota to one of our existing SWDs. Assuming we are able to timely secure the necessary entitlements, this should benefit us later this year.”

Mr. Boylan continued, “Our sponsor, Cypress Energy Holdings, LLC (“CEH”), and its affiliates who control our general partner remain aligned with our common unitholders, with an approximate 64% ownership interest in CELP. Because of this alignment, CEH has again provided financial support to CELP with temporary relief of the administrative fee owed to CEH pursuant to the Omnibus Agreement, which would have charged $1.0 million to CELP this quarter absent the relief. As with the Omnibus Agreement relief provided in prior quarters, CEH did not require any consideration from CELP for this additional support.

In the second quarter, we continued to evaluate several interesting acquisition opportunities, including one which is an exclusive opportunity under a letter of intent, subject to completion of due diligence, definitive agreements and other conditions. We continue to look at new opportunities across all our business segments as well as traditional midstream opportunities, while maintaining our disciplined approach to both due diligence and valuation. Although our yield is still elevated, our common units provide additional flexibility in the consideration we can offer in bidding on accretive opportunities and providing sellers a tax efficient alternative to cash. CEH remains willing to deploy capital to assist CELP in acquiring attractive assets that may be larger than what CELP can currently acquire independently, with plans to offer those assets to CELP as drop-down opportunities.

As we announced in July, today’s cash distribution will be $0.21 per limited partner unit. If this distribution level is maintained throughout 2017, it will provide approximately $9.9 million in total distributions. We continue to see encouraging signs with some new customer additions in our inspection division, and we are focused on organic growth, and improved SWD asset utilization to improve cash flow that will in turn contribute to the improvement of our financial ratios. We continue to believe the fundamental increased demand for inspection and water disposal remains strong over the long-term, but the recovery has been slower than previously anticipated. The hydrotesting integrity division continues to underperform our expectations.”

Second Quarter:

Year-To-Date:

Highlights include:

Looking forward:

CELP will file its quarterly report on Form 10-Q for the period ended June 30, 2017 with the Securities and Exchange Commission later today. CELP will also post a copy of the Form 10-Q on its website at www.cypressenergy.com.

CELP will host an earnings call on Monday, August 14^th, 2017, at 11:00am EDT (10:00am CDT) to discuss its second quarter 2017 financial results. Analysts, investors, and other interested parties may access the conference call by dialing Toll-Free (US & Canada): (888) 390-3983 or International Dial-In (Toll): (862) 255-5354. An archived audio replay of the call will be available on the investor section of our website at www.cypressenergy.com beginning at 11:00am EDT (10:00am CDT) on August 16^th, 2017.

Non-GAAP Measures:

CELP defines Adjusted EBITDA as net income (loss), plus interest expense, depreciation, amortization and accretion expenses, income tax expenses, impairments, non-cash allocated expenses, and equity based compensation, less other extraordinary or non-recurring items. CELP defines Adjusted EBITDA attributable to limited partners as net income (loss) attributable to limited partners, plus interest expense attributable to limited partners, depreciation, amortization and accretion attributable to limited partners, impairments attributable to limited partners, income tax expense attributable to limited partners, and equity based compensation attributable to limited partners, less other extraordinary or non-recurring items attributable to limited partners. CELP defines Distributable Cash Flow as Adjusted EBITDA attributable to limited partners excluding, cash interest paid, cash income taxes paid, maintenance capital expenditures and other extraordinary or non-recurring items. These are supplemental, non-GAAP financial measures used by management and by external users of our financial statements, such as investors and commercial banks, to assess our operating performance as compared to those of other companies in the mid-stream sector, without regard to financing methods, historical cost basis or capital structure; the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; our ability to incur and service debt and fund capital expenditures; the viability of acquisitions and other capital expenditure projects; and the returns on investment of various investment opportunities. The GAAP measures most directly comparable to Adjusted EBITDA, Adjusted EBITDA attributable to limited partners, and Distributable Cash Flow are net income (loss) and cash flow from operating activities, respectively.  These non-GAAP measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures exclude some, but not all, items that affect the most directly comparable GAAP financial measure. Adjusted EBITDA, Adjusted EBITDA attributable to limited partners and Distributable Cash Flow should not be considered an alternative to net income, income before income taxes, net income attributable to limited partners, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP as those items are used to measure operating performance, liquidity, or the ability to service debt obligations. CELP believes that the presentation of Adjusted EBITDA, Adjusted EBITDA attributable to limited partners and Distributable Cash Flow will provide useful information to investors in assessing our financial condition and results of operations. CELP uses Adjusted EBITDA, Adjusted EBITDA attributable to limited partners and Distributable Cash Flow as a supplemental financial measure to both manage our business and assess the cash flows generated by our assets (prior to the establishment of any retained cash reserves by the general partner) to fund the cash distributions we expect to pay to unitholders, to evaluate our success in providing a cash return on investment, and whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates and to determine the yield of our units, which is a quantitative standard used throughout the investment community with respect to publicly-traded partnerships, as the value of a unit is generally determined by a unit’s yield (which in turn is based on the amount of cash distributions the entity pays to a unitholder). Because adjusted EBITDA, adjusted EBITDA attributable to limited partners and Distributable Cash Flow may be defined differently by other companies in our industry, our definitions of Adjusted EBITDA, Adjusted EBITDA attributable to limited partners and Distributable Cash Flow may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. Reconciliations of (i) Adjusted EBITDA to net income, (ii) Adjusted EBITDA attributable to limited partners and Distributable Cash Flow to net income attributable to limited partners and (iii) Adjusted EBITDA to net cash provided by operating activities are provided below.

This press release includes “forward-looking statements.” All statements, other than statements of historical facts included or incorporated herein, may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements, and are subject to a number of risks and uncertainties. While CELP believes its expectations, as reflected in the forward-looking statements, are reasonable, CELP can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in CELP’s Annual Report filed on Form 10-K and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” CELP undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

About Cypress Energy Partners, L.P.

Cypress Energy Partners, L.P. is a master limited partnership that provides essential mid-stream services, including pipeline inspection, integrity, and hydrostatic testing services to various energy companies and their vendors throughout the U.S. and Canada. Cypress also provides saltwater disposal environmental services to upstream energy companies, and their vendors in North Dakota in the Bakken region of the Williston Basin, and West Texas in the Permian Basin. In all of these business segments, Cypress works closely with its customers to help them comply with increasingly complex and strict environmental and safety rules and regulations, and reduce their operating costs. Cypress is headquartered in Tulsa, Oklahoma.

CYPRESS ENERGY PARTNERS, L.P.

Unaudited Condensed Consolidated Balance Sheets

As of June 30, 2017 and December 31, 2016

(in thousands, except unit data)

CYPRESS ENERGY PARTNERS, L.P.

Unaudited Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2017 and 2016

(in thousands, except unit and per unit data)

Reconciliation of Net Income (Loss) to Adjusted EBITDA

Reconciliation of Net Income (Loss) Attributable to Limited Partners to Adjusted EBITDA Attributable to Limited
Partners and Distributable Cash Flow

Reconciliation of Cash Flows Provided by Operating Activities to Adjusted EBITDA

Operating Data