tti-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to______

Commission File Number 001-35195

CSI Compressco LP

(Exact name of registrant as specified in its charter)


Delaware			94-3450907
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

24955 Interstate 45 North
The Woodlands,
TX			77380
(Address of Principal Executive Offices)			(Zip Code)

(281) 364-2244

(Registrant’s Telephone Number, Including Area Code)

_______________________________________________________________________

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
COMMON UNITS REPRESENTING LIMITED PARTNERSHIP INTERESTS	CCLP	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 28, 2021, there were 47,971,240 Common Units outstanding.


CSI Compressco LP
Table of Contents
			Page
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations			1
Consolidated Statements of Comprehensive Income (Loss)			2
Consolidated Balance Sheets			3
Consolidated Statements of Partners’ Capital			4
Consolidated Statements of Cash Flows			5
Notes to Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3. Quantitative and Qualitative Disclosures about Market Risk			27
Item 4. Controls and Procedures			27

PART II—OTHER INFORMATION
Item 1. Legal Proceedings			28
Item 1A. Risk Factors			28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 3. Defaults Upon Senior Securities			28
Item 4. Mine Safety Disclosures			28
Item 5. Other Information			28
Item 6. Exhibits			29
SIGNATURES			30

CERTAIN REFERENCES IN THIS QUARTERLY REPORT

References in this Quarterly Report to “CSI Compressco,” “we,” “our,” “us,” “the Partnership” or like terms refer to CSI Compressco LP and its wholly owned subsidiaries. References to “CSI Compressco GP” or “our General Partner” refer to our general partner, CSI Compressco GP LLC. References to “Spartan” refer to Spartan Energy Partners LP and its controlled subsidiaries. References to “TETRA” refer to TETRA Technologies, Inc. and TETRA’s controlled subsidiaries, other than us.

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

CSI Compressco LP

Consolidated Statements of Operations

(In Thousands, Except Unit and Per Unit Amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenues:
Compression and related services	$	55,329	$	56,284	$	109,568	$	122,049
Aftermarket services	14,289		15,737		25,290		33,707
Equipment sales	140		749		610		2,449
Total revenues	69,758		72,770		135,468		158,205
Cost of revenues (excluding depreciation and amortization expense):
Cost of compression and related services	26,597		25,395		53,023		57,003
Cost of aftermarket services	11,959		13,433		21,476		29,678
Cost of equipment sales	29		704		346		2,587
Total cost of revenues	38,585		39,532		74,845		89,268
Depreciation and amortization	18,997		19,880		37,527		39,550
Impairments and other charges	—		8,874		—		8,874
Insurance recoveries	—		(517)		—		(517)
Selling, general, and administrative expense	9,116		9,241		18,710		18,331

Interest expense, net	13,932		13,580		27,830		26,749

Other (income) expense, net	(97)		4,403		227		4,843
Loss before taxes and discontinued operations	(10,775)		(22,223)		(23,671)		(28,893)
Provision for income taxes	1,019		961		2,526		1,157
Loss from continuing operations	(11,794)		(23,184)		$	(26,197)	$	(30,050)
Loss from discontinued operations, net of tax	(291)		(1,394)		$	(353)	$	(8,158)
Net loss	$	(12,085)	$	(24,578)	$	(26,550)	$	(38,208)

General partner interest in net loss	$	(168)	$	(345)	$	(370)	$	(537)
Common units interest in net loss	$	(11,917)	$	(24,233)	$	(26,180)	$	(37,671)


Basic and diluted net loss per common unit:
Loss from continuing operations per common unit	$	(0.24)	$	(0.48)	$	(0.54)	$	(0.62)
Loss from discontinued operations per common unit	(0.01)		(0.03)		$	(0.01)	$	(0.17)
Net loss per common unit	$	(0.25)	$	(0.51)	$	(0.55)	$	(0.79)
Weighted average common units outstanding:
Basic	47,971,240		47,333,256		47,848,240		47,254,516
Diluted	47,971,240		47,333,256		47,848,240		47,254,516

See Notes to Consolidated Financial Statements

Table of Contents

CSI Compressco LP

Consolidated Statements of Comprehensive Income (Loss)

(In Thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net loss	$	(12,085)	$	(24,578)	$	(26,550)	$	(38,208)
Foreign currency translation adjustment, net of tax of $0 in 2021 and 2020	81		177		138		(176)
Comprehensive loss	$	(12,004)	$	(24,401)	$	(26,412)	$	(38,384)

See Notes to Consolidated Financial Statements

Table of Contents

CSI Compressco LP

Consolidated Balance Sheets

(In Thousands, Except Unit Amounts)


	June 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	8,305	$	16,577

Trade accounts receivable, net of allowances for doubtful accounts of $1,040 as of June 30, 2021 and $1,333 as of December 31, 2020	52,173		43,837
Inventories	32,418		31,188


Prepaid expenses and other current assets	7,556		5,184
Current assets associated with discontinued operations	1		39
Total current assets	100,453		96,825
Property, plant, and equipment:

SEC Form 10-Q filed by CSI Compressco LP