Kodiak Gas Services, Inc. (NYSE: KGS) (“Kodiak” or the “Company”), a leading provider of critical energy infrastructure and contract compression services, today reported financial and operating results for the quarter ended March 31, 2025 and updated full-year 2025 guidance.
Net income attributable to common shareholders for the quarter ended March 31, 2025 was $30.4 million, compared to $19.1 million and $30.2 million for the quarters ended December 31, 2024 and March 31, 2024, respectively.
First Quarter 2025 and Recent Highlights
- Record quarterly adjusted EBITDA(1) of $177.7 million
- Contract Services adjusted gross margin percentage(1) increased sequentially to 67.7%
- Deployed 48,900 horsepower of new, large horsepower compression units
- Fleet utilization increased sequentially to 96.9%
- Repurchased approximately $10 million of common stock at an average price of $36.87
- Increased quarterly dividend by 10% to $0.45 per share, or $1.80 per share annualized
Revised 2025 Outlook Highlights
- Raised full-year 2025 adjusted EBITDA guidance to a range of $695 to $725 million, a $10 million increase to the low end of the range
"Kodiak had another outstanding quarter, with strong recontracting results and increased operational efficiency driving new quarterly records in total revenues, adjusted EBITDA and discretionary cash flow," said Mickey McKee, Kodiak’s President and Chief Executive Officer. “We continued to high grade our compression fleet, adding new, large horsepower units and divesting underutilized non-core horsepower assets. Execution of this strategy drove a third consecutive quarterly increase in fleet utilization and Contract Services adjusted gross margin percentage.
"Despite recent volatility in energy prices, the long-term growth outlook for U.S. natural gas supply and associated need for large horsepower compression infrastructure is unchanged, and Kodiak is committed to delivering the high level of service our customers expect with one of the safest and most sustainable contract compression fleets in the industry.
"The production focus of our compression services—supported by fixed-revenue contracts with premier customers operating in the most economic basins—drives the strength and resilience of our business model. Given the sustainability of our cash flow and the positive outlook for the remainder of the year, we increased our full year 2025 guidance and enhanced our return of capital to shareholders through share repurchases and the recently announced increase to our quarterly dividend, while continuing to drive to our leverage target."
(1) Adjusted EBITDA and adjusted gross margin percentage are non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measure are included herein. |
Segment Information
Contract Services segment revenue was $289.0 million in the first quarter of 2025, a 3.1% increase sequentially. Contract Services segment gross margin was $125.2 million and adjusted gross margin was $195.7 million in the first quarter of 2025, the latter representing a 4.6% increase sequentially.
Other Services segment revenue was $40.7 million in the first quarter of 2025, a 38.8% increase sequentially. Other Services segment gross margin and adjusted gross margin were each $5.5 million in the first quarter of 2025, compared to $4.2 million in the previous quarter.
Long-Term Debt and Liquidity
Total debt outstanding was $2.6 billion as of March 31, 2025, comprised primarily of borrowings on the ABL Facility and senior notes due 2029. At March 31, 2025, the Company had $319.3 million available on its ABL Facility, and Kodiak's credit agreement leverage ratio was 3.7x.
Summary Financial Data |
||||||||||||
(in thousands, except percentages) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
Total revenues |
|
$ |
329,642 |
|
|
$ |
309,519 |
|
|
$ |
215,492 |
|
Net income attributable to common shareholders |
|
$ |
30,411 |
|
|
$ |
19,083 |
|
|
$ |
30,232 |
|
Adjusted EBITDA (1) |
|
$ |
177,664 |
|
|
$ |
169,072 |
|
|
$ |
117,762 |
|
Adjusted EBITDA percentage (1) |
|
|
53.9 |
% |
|
|
54.6 |
% |
|
|
54.6 |
% |
|
|
|
|
|
|
|
||||||
Contract Services revenue |
|
$ |
288,956 |
|
|
$ |
280,211 |
|
|
$ |
193,399 |
|
Contract Services adjusted gross margin (1) |
|
$ |
195,721 |
|
|
$ |
187,027 |
|
|
$ |
127,517 |
|
Contract Services adjusted gross margin percentage (1) |
|
|
67.7 |
% |
|
|
66.7 |
% |
|
|
65.9 |
% |
|
|
|
|
|
|
|
||||||
Other Services revenue |
|
$ |
40,686 |
|
|
$ |
29,308 |
|
|
$ |
22,093 |
|
Other Services adjusted gross margin (1) |
|
$ |
5,460 |
|
|
$ |
4,242 |
|
|
$ |
4,409 |
|
Other Services adjusted gross margin percentage (1) |
|
|
13.4 |
% |
|
|
14.5 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
||||||
Maintenance capital expenditures |
|
$ |
16,407 |
|
|
$ |
14,858 |
|
|
$ |
10,642 |
|
|
|
|
|
|
|
|
||||||
Growth capital expenditures(2) |
|
$ |
55,983 |
|
|
$ |
44,693 |
|
|
$ |
52,221 |
|
Other capital expenditures(3) |
|
|
22,258 |
|
|
|
26,393 |
|
|
|
7,180 |
|
Total Growth and Other capital expenditures |
|
$ |
78,241 |
|
|
$ |
71,086 |
|
|
$ |
59,401 |
|
|
|
|
|
|
|
|
||||||
Discretionary cash flow (1) |
|
$ |
116,084 |
|
|
$ |
107,690 |
|
|
$ |
71,925 |
|
Free cash flow (1) |
|
$ |
47,219 |
|
|
$ |
56,657 |
|
|
$ |
12,524 |
|
(1) |
Adjusted EBITDA, adjusted EBITDA percentage, adjusted gross margin, adjusted gross margin percentage, discretionary cash flow and free cash flow are non-GAAP financial measures. For definitions and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures” below. |
|
|
||
(2) |
Growth capital expenditures made to (1) expand the operating capacity or operating income capacity of assets including, but not limited to, the acquisition of additional compression units, upgrades to existing equipment, expansion of supporting infrastructure, and implementation of new technologies, (2) maintain the operating capacity or operating income capacity of assets by acquisition of replacement compression units and their supporting infrastructure, and (3) expand the operating capacity or operating income capacity of existing assets. |
|
|
||
(3) |
Other capital expenditures made on assets required to support our operations—such as rolling stock, leasehold improvements, technology hardware and software and related implementation expenditures, safety enhancements to equipment, and other general items that are typically capitalized and that have a useful life beyond one year. Other capital expenditures were previously included in growth capital expenditures, but are now shown separately for both current and historical periods. |
Summary Operating Data |
|||||||||
(as of the dates indicated) |
|||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|||
Fleet horsepower (1) |
|
4,422,914 |
|
|
4,402,747 |
|
|
3,290,971 |
|
Revenue-generating horsepower (2) |
|
4,284,103 |
|
|
4,250,499 |
|
|
3,285,592 |
|
Fleet compression units |
|
4,941 |
|
|
5,069 |
|
|
3,091 |
|
Revenue-generating compression units |
|
4,545 |
|
|
4,592 |
|
|
3,064 |
|
Revenue-generating horsepower per revenue-generating compression unit (3) |
|
943 |
|
|
926 |
|
|
1,072 |
|
Fleet utilization (4) |
|
96.9 |
% |
|
96.5 |
% |
|
99.8 |
% |
(1) |
Fleet horsepower includes (x) revenue-generating horsepower and (y) idle horsepower, which is comprised of compression units that do not have a signed contract or are not subject to a firm commitment from our customer and therefore are not currently generating revenue. |
|
|
||
(2) |
Revenue-generating horsepower includes compression units that are operating under contract and generating revenue and compression units which are available to be deployed and for which we have a signed contract or are subject to a firm commitment from our customer. |
|
|
||
(3) |
Calculated as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units at period end. |
|
|
||
(4) |
Fleet utilization is calculated as (i) revenue-generating horsepower divided by (ii) fleet horsepower. |
Full-Year 2025 Guidance |
||||||||
Kodiak is providing revised guidance for the full year 2025. Amounts below are in thousands except percentages. |
||||||||
|
|
Full-Year 2025 Guidance |
||||||
|
|
Low |
|
High |
||||
Adjusted EBITDA (1) |
|
$ |
695,000 |
|
|
$ |
725,000 |
|
Discretionary cash flow (1)(2) |
|
$ |
430,000 |
|
|
$ |
455,000 |
|
|
|
|
|
|
||||
Segment Information |
|
|
|
|
||||
Contract Services revenues |
|
$ |
1,150,000 |
|
|
$ |
1,200,000 |
|
Contract Services adjusted gross margin percentage (1) |
|
|
66.5 |
% |
|
|
68.5 |
% |
Other Services revenues |
|
$ |
160,000 |
|
|
$ |
180,000 |
|
Other Services adjusted gross margin percentage (1) |
|
|
14.0 |
% |
|
|
17.0 |
% |
|
|
|
|
|
||||
Capital Expenditures |
|
|
|
|
||||
Maintenance capital expenditures |
|
$ |
75,000 |
|
|
$ |
85,000 |
|
|
|
|
|
|
||||
Growth capital expenditures |
|
$ |
180,000 |
|
|
$ |
205,000 |
|
Other capital expenditures |
|
60,000 |
|
|
65,000 |
|
||
Total Growth and Other capital expenditures |
|
$ |
240,000 |
|
|
$ |
270,000 |
|
(1) |
The Company is unable to reconcile projected adjusted EBITDA to projected net income (loss) and discretionary cash flow to projected net cash provided by operating activities and projected adjusted gross margin percentage to projected gross margin percentage, the most comparable financial measures calculated in accordance with GAAP, respectively, without unreasonable efforts because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, unknown future events, and estimating certain future GAAP measures. The inability to project certain components of the calculation would significantly affect the accuracy of the reconciliations. |
|
|
||
(2) |
Discretionary cash flow guidance assumes no change to Secured Overnight Financing Rate futures. |
Conference Call
Kodiak will conduct a conference call on Thursday, May 8, 2025, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss financial and operating results for the quarter ended March 31, 2025. To listen to the call by phone, dial 877-407-4012 and ask for the Kodiak Gas Services call at least 10 minutes prior to the start time. To listen to the call via webcast, please visit the Investors tab of Kodiak’s website at www.kodiakgas.com.
About Kodiak
Kodiak is a leading contract compression services provider in the United States, serving as a critical link in the infrastructure that enables the safe and reliable production and transportation of natural gas and oil. Headquartered in The Woodlands, Texas, Kodiak provides contract compression and related services to oil and gas producers and midstream customers in high–volume gas gathering systems, processing facilities, multi-well gas lift applications and natural gas transmission systems. More information is available at www.kodiakgas.com.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income (loss) before interest expense; income tax expense; and depreciation and amortization; plus (i) loss on extinguishment of debt; (ii) loss (gain) on derivatives; (iii) equity compensation expense; (iv) severance expenses; (v) transaction expenses; (vi) loss (gain) on sale of assets; and (vii) impairment of compression equipment. Adjusted EBITDA percentage is defined as adjusted EBITDA divided by total revenues. Adjusted EBITDA and adjusted EBITDA percentage are used as supplemental financial measures by our management and external users of our financial statements, such as investors, commercial banks and other financial institutions, to assess: (i) the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; (ii) the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; (iii) the ability of our assets to generate cash sufficient to make debt payments and pay dividends; and (iv) our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure. We believe adjusted EBITDA and adjusted EBITDA percentage provide useful information because, when viewed with our GAAP results and the accompanying reconciliation, they provide a more complete understanding of our performance than GAAP results alone. We also believe that external users of our financial statements benefit from having access to the same financial measures that management uses in evaluating the results of our business. Reconciliations of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and net cash provided by operating activities are presented below.
Adjusted gross margin is defined as revenue less cost of operations, exclusive of depreciation and amortization expense. Adjusted gross margin percentage is defined as adjusted gross margin divided by total revenues. We believe adjusted gross margin and adjusted gross margin percentage are useful as supplemental measures to investors of our operating profitability. Reconciliations of adjusted gross margin to gross margin are presented below.
Discretionary cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; and (iii) certain other expenses; plus (w) cash loss on extinguishment of debt; (x) severance expenses; and (y) transaction expenses. We believe discretionary cash flow is a useful liquidity and performance measure and supplemental financial measure for us in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. A reconciliation of discretionary cash flow to net cash provided by operating activities is presented below.
Free cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; (iii) certain other expenses; and (iv) growth and other capital expenditures; plus (w) cash loss on extinguishment of debt; (x) severance expenses; (y) transaction expenses; and (z) proceeds from sale of assets. We believe free cash flow is a liquidity measure and useful supplemental financial measure for us in assessing our ability to pursue business opportunities and investments to grow our business and to service our debt. A reconciliation of free cash flow to net cash provided by operating activities is presented below.
Cautionary Note Regarding Forward-Looking Statements
This news release contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding: (i) expected operating results, such as revenue growth and earnings, including upon the continued integration of CSI Compressco LP into our operations, and our ability to service our indebtedness; (ii) anticipated levels of capital expenditures and uses of capital; (iii) current or future volatility in the credit markets and future market conditions; (iv) potential or pending acquisition transactions or other strategic transactions, the timing thereof, the receipt of necessary approvals to close such acquisitions, our ability to finance such acquisitions, and our ability to achieve the intended operational, financial, and strategic benefits from any such transactions; (v) expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities and governmental and regulatory investigations and proceedings; (vi) production and capacity forecasts for the natural gas and oil industry; (vii) strategy for customer retention, growth, fleet maintenance, market position and financial results; (viii) our interest rate hedges; and (ix) strategy for risk management.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) a reduction in the demand for natural gas and oil and/or a decrease in natural gas and oil prices; (ii) the loss of, or the deterioration of the financial condition of, any of our key customers; (iii) nonpayment and nonperformance by our customers, suppliers or vendors; (iv) competitive pressures that may cause us to lose market share; (v) the structure of our Contract Services contracts and the failure of our customers to continue to contract for services after expiration of the primary term; (vi) our ability to successfully integrate any acquired businesses, including CSI Compressco, and realize the expected benefits thereof in the expected timeframe or at all; (vii) our ability to fund purchases of additional compression equipment; (viii) our ability to successfully implement our share repurchase program; (ix) a deterioration in general economic, business, geopolitical or industry conditions, including as a result of the conflict between Russia and Ukraine and the Israel-Hamas war, inflation, and slow economic growth in the United States; (x) a downturn in the economic environment, as well as continued inflationary pressures; (xi) international operations and related mobilization and demobilization of compression units, operational interruptions, delays, upgrades, refurbishment and repair of compression assets and any related delays and costs overruns or reduced payment of contracted rates; (xii) tax legislation and administrative initiatives or challenges to our tax positions; (xiii) the loss of key management, operational personnel or qualified technical personnel; (xiv) our dependence on a limited number of suppliers; (xv) the cost of compliance with existing and new governmental regulations, including climate change legislation, and associated uncertainty given the new U.S. federal government administration; (xvi) changes in trade policies and regulations, including increases or changes in duties, current and potentially new tariffs or quotas and other similar measures, as well as the potential direct and indirect impact of retaliatory tariffs and other actions; (xvii) the cost of compliance with regulatory initiatives and stakeholders’ pressures, including sustainability and corporate responsibility; (xviii) the inherent risks associated with our operations, such as equipment defects and malfunctions; (xix) our reliance on third-party components for use in our IT systems; (xx) legal and reputational risks and expenses relating to the privacy, use and security of employee and client information; (xxi) threats of cyber-attacks or terrorism; (xxii) agreements that govern our debt contain features that may limit our ability to operate our business and fund future growth and also increase our exposure to risk during adverse economic conditions; (xxiii) volatile and/or elevated interest rates and associated central bank policy actions; (xxiv) our ability to access the capital and credit markets or borrow on affordable terms (or at all) to obtain additional capital that we may require; (xxv) major natural disasters, severe weather events or other similar events that could disrupt operations; (xxvi) unionization of our labor force, labor interruptions and new or amended labor regulations; (xxvii) renewal of insurance; (xxviii) the effectiveness of our disclosure controls and procedures; and (xxix) such other factors as discussed throughout the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission.(“SEC”) on March 7, 2025, which can be obtained free of charge on the SEC’s website at http://www.sec.gov.
Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by applicable law, we undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future developments or otherwise.
KODIAK GAS SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
Revenues: |
|
|
|
|
|
|
||||||
Contract Services |
|
$ |
288,956 |
|
|
$ |
280,211 |
|
|
$ |
193,399 |
|
Other Services |
|
|
40,686 |
|
|
|
29,308 |
|
|
|
22,093 |
|
Total revenues |
|
|
329,642 |
|
|
|
309,519 |
|
|
|
215,492 |
|
Operating expenses: |
|
|
|
|
|
|
||||||
Cost of operations (exclusive of depreciation and amortization shown below): |
|
|
|
|
|
|
||||||
Contract Services |
|
|
93,235 |
|
|
|
93,184 |
|
|
|
65,882 |
|
Other Services |
|
|
35,226 |
|
|
|
25,066 |
|
|
|
17,684 |
|
Depreciation and amortization |
|
|
70,529 |
|
|
|
70,413 |
|
|
|
46,944 |
|
Selling, general and administrative |
|
|
32,255 |
|
|
|
31,401 |
|
|
|
24,824 |
|
Loss on sale of assets |
|
|
9,211 |
|
|
|
20,409 |
|
|
|
— |
|
Total operating expenses |
|
|
240,456 |
|
|
|
240,473 |
|
|
|
155,334 |
|
Income from operations |
|
|
89,186 |
|
|
|
69,046 |
|
|
|
60,158 |
|
Other income (expenses): |
|
|
|
|
|
|
||||||
Interest expense |
|
|
(47,224 |
) |
|
|
(51,280 |
) |
|
|
(39,740 |
) |
Gain on derivatives |
|
|
— |
|
|
|
17,790 |
|
|
|
19,757 |
|
Other expense, net |
|
|
(402 |
) |
|
|
(409 |
) |
|
|
(68 |
) |
Total other expenses, net |
|
|
(47,626 |
) |
|
|
(33,899 |
) |
|
|
(20,051 |
) |
Income before income taxes |
|
|
41,560 |
|
|
|
35,147 |
|
|
|
40,107 |
|
Income tax expense |
|
|
10,524 |
|
|
|
15,547 |
|
|
|
9,875 |
|
Net income |
|
|
31,036 |
|
|
|
19,600 |
|
|
|
30,232 |
|
Less: Net income attributable to noncontrolling interests |
|
|
625 |
|
|
|
517 |
|
|
|
— |
|
Net income attributable to common shareholders |
|
$ |
30,411 |
|
|
$ |
19,083 |
|
|
$ |
30,232 |
|
|
|
|
|
|
|
|
||||||
Earnings per share attributable to common shareholders: |
|
|
|
|
|
|
||||||
Basic |
|
$ |
0.34 |
|
|
$ |
0.21 |
|
|
$ |
0.39 |
|
Diluted |
|
$ |
0.33 |
|
|
$ |
0.21 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
||||||
Basic |
|
|
87,879 |
|
|
|
87,011 |
|
|
|
77,432 |
|
Diluted |
|
|
90,606 |
|
|
|
89,272 |
|
|
|
78,102 |
|
KODIAK GAS SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) |
||||||||
|
|
March 31,
|
|
December 31,
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,950 |
|
|
$ |
4,750 |
|
Accounts receivable, net |
|
|
253,660 |
|
|
|
253,637 |
|
Inventories, net |
|
|
99,802 |
|
|
|
103,341 |
|
Fair value of derivative instruments |
|
|
— |
|
|
|
3,672 |
|
Contract assets |
|
|
19,888 |
|
|
|
7,575 |
|
Prepaid expenses and other current assets |
|
|
11,778 |
|
|
|
10,686 |
|
Total current assets |
|
|
387,078 |
|
|
|
383,661 |
|
Property, plant and equipment, net |
|
|
3,400,154 |
|
|
|
3,395,022 |
|
Operating lease right-of-use assets, net |
|
|
51,367 |
|
|
|
53,754 |
|
Finance lease right-of-use assets, net |
|
|
8,177 |
|
|
|
5,696 |
|
Goodwill |
|
|
415,213 |
|
|
|
415,213 |
|
Identifiable intangible assets, net |
|
|
161,040 |
|
|
|
162,747 |
|
Fair value of derivative instruments |
|
|
11,619 |
|
|
|
17,544 |
|
Other assets |
|
|
1,474 |
|
|
|
1,486 |
|
Total assets |
|
$ |
4,436,122 |
|
|
$ |
4,435,123 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
71,724 |
|
|
$ |
57,562 |
|
Accrued liabilities |
|
|
179,157 |
|
|
|
188,732 |
|
Contract liabilities |
|
|
78,988 |
|
|
|
73,075 |
|
Total current liabilities |
|
|
329,869 |
|
|
|
319,369 |
|
Long-term debt, net of unamortized debt issuance cost |
|
|
2,588,329 |
|
|
|
2,581,909 |
|
Operating lease liabilities |
|
|
46,524 |
|
|
|
49,748 |
|
Finance lease liabilities |
|
|
5,978 |
|
|
|
3,514 |
|
Deferred tax liabilities |
|
|
108,666 |
|
|
|
103,826 |
|
Other liabilities |
|
|
899 |
|
|
|
3,150 |
|
Total liabilities |
|
$ |
3,080,265 |
|
|
$ |
3,061,516 |
|
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock |
|
|
8 |
|
|
|
9 |
|
Common stock |
|
|
895 |
|
|
|
892 |
|
Additional paid-in capital |
|
|
1,311,473 |
|
|
|
1,305,375 |
|
Treasury stock, at cost |
|
|
(49,956 |
) |
|
|
(40,000 |
) |
Noncontrolling interest |
|
|
12,029 |
|
|
|
13,694 |
|
Accumulated other comprehensive loss |
|
|
(5,684 |
) |
|
|
— |
|
Retained earnings |
|
|
87,092 |
|
|
|
93,637 |
|
Total stockholders’ equity |
|
|
1,355,857 |
|
|
|
1,373,607 |
|
Total liabilities and stockholders’ equity |
|
$ |
4,436,122 |
|
|
$ |
4,435,123 |
|
KODIAK GAS SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) |
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
31,036 |
|
|
$ |
30,232 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
70,529 |
|
|
|
46,944 |
|
Equity compensation expense |
|
6,978 |
|
|
|
2,848 |
|
Amortization of debt issuance costs |
|
3,133 |
|
|
|
2,643 |
|
Non-cash lease expense |
|
2,555 |
|
|
|
1,200 |
|
Provision for credit losses |
|
— |
|
|
|
85 |
|
Inventory reserve |
|
123 |
|
|
|
126 |
|
Loss on sale of assets |
|
9,211 |
|
|
|
— |
|
Change in fair value of derivatives |
|
— |
|
|
|
(14,241 |
) |
Amortization of interest rate swap |
|
2,426 |
|
|
|
— |
|
Deferred tax provision |
|
7,016 |
|
|
|
6,261 |
|
Changes in operating assets and liabilities, exclusive of effects of business acquisition: |
|
|
|
||||
Accounts receivable |
|
(23 |
) |
|
|
(30,130 |
) |
Inventories |
|
3,416 |
|
|
|
(6,794 |
) |
Contract assets |
|
(12,313 |
) |
|
|
(906 |
) |
Prepaid expenses and other current assets |
|
(1,235 |
) |
|
|
5,103 |
|
Accounts payable |
|
2,182 |
|
|
|
(2,324 |
) |
Accrued and other liabilities |
|
(16,258 |
) |
|
|
5,872 |
|
Contract liabilities |
|
5,913 |
|
|
|
4,623 |
|
Other assets |
|
(361 |
) |
|
|
— |
|
Net cash provided by operating activities |
|
114,328 |
|
|
|
51,542 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchase of property, plant and equipment |
|
(77,553 |
) |
|
|
(60,153 |
) |
Proceeds from sale of assets |
|
9,376 |
|
|
|
— |
|
Other |
|
— |
|
|
|
3 |
|
Net cash used for investing activities |
|
(68,177 |
) |
|
|
(60,150 |
) |
Cash flows from financing activities: |
|
|
|
||||
Borrowings on debt instruments |
|
347,491 |
|
|
|
1,008,476 |
|
Payments on debt instruments |
|
(344,204 |
) |
|
|
(957,975 |
) |
Principal payments on other borrowings |
|
(1,950 |
) |
|
|
— |
|
Payment of debt issuance cost |
|
— |
|
|
|
(7,594 |
) |
Principal payments on finance leases |
|
(719 |
) |
|
|
— |
|
Offering costs |
|
— |
|
|
|
(446 |
) |
Dividends paid to stockholders |
|
(36,445 |
) |
|
|
(29,815 |
) |
Repurchase of common shares |
|
(9,956 |
) |
|
|
— |
|
Cash paid for shares withheld to cover taxes |
|
(2,827 |
) |
|
|
(294 |
) |
Net effect on deferred taxes and taxes payable related to the vesting of restricted stock |
|
16 |
|
|
|
— |
|
Distributions to noncontrolling interest |
|
(357 |
) |
|
|
— |
|
Net cash provided by (used for) financing activities |
|
(48,951 |
) |
|
|
12,352 |
|
Net increase (decrease) in cash and cash equivalents |
|
(2,800 |
) |
|
|
3,744 |
|
Cash and cash equivalents - beginning of period |
|
4,750 |
|
|
|
5,562 |
|
Cash and cash equivalents - end of period |
$ |
1,950 |
|
|
$ |
9,306 |
|
KODIAK GAS SERVICES, INC. RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (UNAUDITED) (in thousands, excluding percentages) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
Net income |
|
$ |
31,036 |
|
|
$ |
19,600 |
|
|
$ |
30,232 |
|
Interest expense |
|
|
47,224 |
|
|
|
51,280 |
|
|
|
39,740 |
|
Income tax expense |
|
|
10,524 |
|
|
|
15,547 |
|
|
|
9,875 |
|
Depreciation and amortization |
|
|
70,529 |
|
|
|
70,413 |
|
|
|
46,944 |
|
Gain on derivatives |
|
|
— |
|
|
|
(17,790 |
) |
|
|
(19,757 |
) |
Equity compensation expense |
|
|
6,978 |
|
|
|
5,594 |
|
|
|
2,848 |
|
Severance expense (1) |
|
|
376 |
|
|
|
(712 |
) |
|
|
— |
|
Transaction expenses (2) |
|
|
1,786 |
|
|
|
4,731 |
|
|
|
7,880 |
|
Loss on sale of assets |
|
|
9,211 |
|
|
|
20,409 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
177,664 |
|
|
$ |
169,072 |
|
|
$ |
117,762 |
|
|
|
|
|
|
|
|
||||||
Net income percentage |
|
|
9.4 |
% |
|
|
6.3 |
% |
|
|
14.0 |
% |
Adjusted EBITDA percentage |
|
|
53.9 |
% |
|
|
54.6 |
% |
|
|
54.6 |
% |
(1) |
Represents severance expense related to the CSI acquisition. |
|
|
||
(2) |
Represents certain costs associated with non-recurring professional services and other costs, primarily related to the CSI Acquisition and secondary offerings. |
|
|
KODIAK GAS SERVICES, INC. RECONCILIATION OF ADJUSTED GROSS MARGIN TO GROSS MARGIN (UNAUDITED) (in thousands, excluding percentages) |
||||||||||||
Contract Services |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
Total revenues |
|
$ |
288,956 |
|
|
$ |
280,211 |
|
|
$ |
193,399 |
|
Cost of operations (excluding depreciation and amortization) |
|
|
(93,235 |
) |
|
|
(93,184 |
) |
|
|
(65,882 |
) |
Depreciation and amortization |
|
|
(70,529 |
) |
|
|
(70,413 |
) |
|
|
(46,944 |
) |
Gross margin |
|
$ |
125,192 |
|
|
$ |
116,614 |
|
|
$ |
80,573 |
|
Gross margin percentage |
|
|
43.3 |
% |
|
|
41.6 |
% |
|
|
41.7 |
% |
Depreciation and amortization |
|
|
70,529 |
|
|
|
70,413 |
|
|
|
46,944 |
|
Adjusted gross margin |
|
$ |
195,721 |
|
|
$ |
187,027 |
|
|
$ |
127,517 |
|
Adjusted gross margin percentage |
|
|
67.7 |
% |
|
|
66.7 |
% |
|
|
65.9 |
% |
Other Services |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
Total revenues |
|
$ |
40,686 |
|
|
$ |
29,308 |
|
|
$ |
22,093 |
|
Cost of operations (excluding depreciation and amortization) |
|
|
(35,226 |
) |
|
|
(25,066 |
) |
|
|
(17,684 |
) |
Depreciation and amortization |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gross margin |
|
$ |
5,460 |
|
|
$ |
4,242 |
|
|
$ |
4,409 |
|
Gross margin percentage |
|
|
13.4 |
% |
|
|
14.5 |
% |
|
|
20.0 |
% |
Depreciation and amortization |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted gross margin |
|
$ |
5,460 |
|
|
$ |
4,242 |
|
|
$ |
4,409 |
|
Adjusted gross margin percentage |
|
|
13.4 |
% |
|
|
14.5 |
% |
|
|
20.0 |
% |
KODIAK GAS SERVICES, INC. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO DISCRETIONARY CASH FLOW AND FREE CASH FLOW (UNAUDITED) (in thousands) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
Net cash provided by operating activities |
|
$ |
114,328 |
|
|
$ |
118,485 |
|
|
$ |
51,542 |
|
Maintenance capital expenditures |
|
|
(16,407 |
) |
|
|
(14,858 |
) |
|
|
(10,642 |
) |
Severance expense (1) |
|
|
376 |
|
|
|
(712 |
) |
|
|
— |
|
Transaction expenses (2) |
|
|
1,786 |
|
|
|
4,731 |
|
|
|
7,880 |
|
Change in operating assets and liabilities |
|
|
18,679 |
|
|
|
1,732 |
|
|
|
24,556 |
|
Other (3) |
|
|
(2,678 |
) |
|
|
(1,688 |
) |
|
|
(1,411 |
) |
Discretionary cash flow |
|
$ |
116,084 |
|
|
$ |
107,690 |
|
|
$ |
71,925 |
|
Growth capital expenditures (4)(5) |
|
|
(55,983 |
) |
|
|
(44,693 |
) |
|
|
(52,221 |
) |
Other capital expenditures (4) |
|
|
(22,258 |
) |
|
|
(26,393 |
) |
|
|
(7,180 |
) |
Proceeds from sale of assets |
|
|
9,376 |
|
|
|
20,053 |
|
|
|
— |
|
Free cash flow |
|
$ |
47,219 |
|
|
$ |
56,657 |
|
|
$ |
12,524 |
|
(1) |
Represents severance expense related to the CSI acquisition. |
|
|
|
|
(2) |
Represents certain costs associated with non-recurring professional services and other costs, primarily related to the CSI Acquisition and secondary offerings. |
|
|
|
|
(3) |
Includes non-cash lease expense, provision for credit losses and inventory reserve. |
|
|
|
|
(4) |
For the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, growth and other capital expenditures includes a $14.1 million increase, an $11.1 million increase and a $9.9 million increase in accrued capital expenditures, respectively. |
|
|
|
|
(5) |
For the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, growth capital expenditures includes a non-cash increase in the sales tax accrual on compression equipment purchases of $1.2 million, $0.8 million and $0.3 million, respectively. These accrual amounts are estimated based on the best-known information as it relates to open audit periods with the State of Texas. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250507845206/en/
Contacts
Investor Contact
Graham Sones, VP – Investor Relations
ir@kodiakgas.com
(936) 755-3529
