Tulsa’s Cypress Environmental Partners, L.P. reported its financial results for the second quarter showing an 18% increase in consolidated revenue that totaled $31.9 million but losses increased over the past year as the firm struggled to recover from 2020.
The company’s adjusted EBITDA was $0.5 million for the quarter and its net loss attributable to common unitholder was $2.9 million compared to $1.3 million a year earlier. The net loss in income totaled $2 million, up from $381,000 in the second quarter of 2020. It reported distributable cash flow of $1.4 million during the three-month period.
Cypress had suspended its common unit and preferred unit distributions in July 2020 as it focused on reducing debt. The company’s credit facility also put significant restrictions this year on the payment of distributions. As a result, Cypress does not expect to pay significant distributions in the near term; instead, Cypress expects to continue to use available cash to pay down debt and for working capital needs.
“Our Q2 revenue and gross margin results are meaningfully better than Q1, but our EBITDA and DCF results are still weak and disappointing,” said Peter C. Boylan III, Chairman, President, and CEO.
“We have made solid progress this year on business development courting new customers via video conference and believe the results of those efforts will be seen in future periods. The sales process typically takes many months, given how customers run tenders, select, and onboard new vendors,” he added.
The company indicated its inspection services had been slow but steadily improving. Over the past year, nearly 50% of the company’s inspection work was for regulated public utility companies that were not exposed to commodity price risk.
“Despite reducing our outstanding indebtedness under our credit facility by 11% or $6.7 million from December 31, 2020, we still have too much debt for our current earnings,” continued Boylan.
“The lenders under our credit facility have agreed to amend the facility to remove the financial covenant ratios for the remaining term of the facility, which matures in May 2022. We appreciate that the lenders have remained supportive as we navigate the current challenging market conditions.”
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