CORR CorEnergy Infrastructure Trust Inc NEW

CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) ("CorEnergy" or the "Company") today announced financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 and Recent Highlights

• Reported total revenue of $33.0 million.
• Generated net loss of $4.3 million and Adjusted EBITDA (a non-GAAP financial measure) of $4.8 million.
• Transported an average of 151,953 barrels per day.
• Submitted additional information to the Federal Trade Commission ("FTC") as requested by the FTC as part of its review of CorEnergy's agreement to sell its MoGas and Omega pipeline systems to Spire, Inc. for $175.0 million in cash.
  • The transaction is expected to close around the end of the calendar year, pending FTC review and approval and subject to customary closing conditions.
• Advanced proposed cost-of-service based tariff increases as a result of volume shortfalls, including:
  • A 36% tariff increase on Crimson's SPB system, of which 10% was effective in March 2023.
  • A 128% tariff increase on Crimson’s KLM system, of which 21% was effective in October 2023.
  • A 35% tariff increase on Crimson's Southern California system, of which 21% was effective as of August 2023.
  • Plan to file this week for an acceleration of the pending rate cases for the SPB and KLM systems.
• Amended the Company's credit facility covenant requirements for Q3 and Q4 2023 to provide additional time to manage near-term debt maturities through the proposed sale of CorEnergy's MoGas and Omega Pipeline systems.
• Maintained the Company's 2023 outlook calling for Adjusted EBITDA of $24.0 to $26.0 million, reflecting anticipated volume, maintenance capital and timing of the Company's proposed MoGas and Omega sale.

Management Commentary

"California volumes have remained stable but below our original 2023 expectations while at the same time maintenance costs and capital requirements have increased sharply, driven by a combination of high inflation rates, rapidly rising wages and higher levels of activity and requirements by the California State Fire Marshal who is the primary pipeline regulator in the state. We have implemented mitigation efforts to realign cost of service and rates, including cost reductions, tariff rate increases, asset sales and debt reduction; however, these actions take time to fully be resolved. Additionally, we plan to file a request to immediately accelerate our pending rate filings for increases on the SPB and KLM systems to better align revenue with the higher level of expenses we are experiencing. The timing of the response from the CPUC on this request is hard to predict, but we hope to have a response in Q1 2024 at the latest. We believe these actions will help us generate better operating results and materially reduce our debt," said Dave Schulte, Chairman and Chief Executive Officer.

"As expected, we did see an increase in November 2023 nominations, showing the anticipated increase in volumes following the announced closure of the P66 refinery for conversion to renewable diesel early next year. The P66 line has historically shipped an estimated 50,000 barrels per day to their Rodeo refinery. Capturing even a portion of those volumes would be helpful, but the long-term impact to run-rate cash flow will also be balanced with the impact on the pending rate cases as well as the current expense pressures which are expected to persist."

Third Quarter Performance Summary

Third quarter financial highlights are as follows:

 

For the Three Months Ended September 30, 2023

 

 

 

 

Per Common Share

 

Total

 

Basic

 

Diluted

Net Loss

$

(4,310,336

)

 

$

(0.47

)

 

$

(0.47

)

Net Cash Provided by Operating Activities

$

3,202,607

 

 

 

 

 

Adjusted Net Loss1

$

(3,314,966

)

 

 

 

 

Cash Available for Distribution (CAD)1

$

(10,780,520

)

 

 

 

 

Adjusted EBITDA2

$

4,809,301

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared to Common Stockholders

 

 

$

—

 

 

 

1 Non-GAAP financial measure. Adjusted Net Loss excludes special items of $995 thousand and $223, which are transaction costs and restructuring costs, respectively; however, CAD has not been so adjusted. Reconciliations of Adjusted Net Loss and CAD, as presented, to Net Loss and Net Cash provided by Operating Activities are included at the end of this press release. See Note 1 below for additional information. Cash available for distribution represents cash available to common stockholders after the effect of the preferred dividend requirement.

2 Non-GAAP financial measure. Adjusted EBITDA excludes special items of $995 thousand and $223, which are transaction costs and restructuring costs, respectively. Reconciliation of Adjusted EBITDA, as presented, to Net Loss is included at the end of this press release. See Note 2 below for additional information.

Crimson Rate Increases

During the third quarter of 2022, Crimson filed for a tariff increase of 35% on its Southern California pipeline system and 10% on its KLM pipeline. Both of the third quarter tariff filings were protested by shippers and are proceeding through the CPUC approval process, with resolution expected in 2024. The Company commenced collecting a 10% tariff increase on both systems 30 days after the respective third quarter filings in 2022 and began collecting an additional 10% tariff increase on each pipeline in the third quarter 2023 on the anniversary of the filing, for a total of a 21% increase on each pipeline to date.

During the first quarter of 2023, Crimson filed for a 36% rate increase on its SPB pipeline and 107% increase on its KLM pipeline, additive to the 10% increase filed in 2022, based on the regulated cost-of-service tariff structure. Both tariff filings were protested by shippers and will proceed through the CPUC approval process. The Company commenced collecting a 10% tariff increase on the SPB system in March 2023, and a 21% total tariff increase on KLM as of October 2023.

SPB and KLM filed for an acceleration of the pending tariff increase requests on SPB and KLM systems. The filing requests an immediate tariff increase of 24.3% and 27.6% on SPB and KLM, respectively. This filing does not increase the total requested tariff increases but rather just accelerates them to help eliminate current negative cash flows. The timing of the response from the CPUC is unknown but the Company is hopeful for the Q1 2024 resolution at the latest.

Any tariff increase is subject to refund if the CPUC determines that it was not justified.

2023 Outlook

CorEnergy maintained its outlook for 2023, as follows:

• Adjusted EBITDA of $24.0 to $26.0 million, inclusive of maintenance expense of $9.0 to $10.0 million, reflecting reduced volumes and delays in tariff processes (see Note 2 for additional details).
• Capital expenditures in the range of $11.5 to $12.5 million, incurred primarily in the second half of 2023.
• An expectation that the Company’s Class B Common Stock will mandatorily convert to Common Stock at a ratio of 0.68:1, as opposed to 1:1, during Q1 2024.

Dividend and Distribution Status

CorEnergy's Board of Directors maintained the suspension of dividend payments on its 7.375% Series A Cumulative Redeemable Preferred Stock and the Company’s Common Stock due to lower operating outlook. The Company's Board will continue to evaluate dividends on a quarterly basis.

CorEnergy’s 7.375% Series A Cumulative Redeemable Preferred Stock will accrue dividends during any period in which dividends are not paid. Any accrued Series A Cumulative Redeemable Preferred dividends must be paid prior to the Company resuming common dividend payments.

Based on the suspension of dividend payments to CorEnergy’s public equity holders, the Crimson Class A-1, Class A-2, and Class A-3 Units and CorEnergy’s Class B Common Stock will not receive dividends. The Crimson Class A-1 Units will accumulate a preferred distribution based on the CorEnergy Series A Cumulative Redeemable Preferred Shares, which would be paid prior to the Company resuming common dividend payments.

The unpaid and accumulated preferred dividend amounts are included in the financial statements and notes.

Third Quarter Results Call

CorEnergy will host a conference call on Tuesday, November 7, 2023 at 10:00 a.m. Central Time to discuss its financial results. The call may also include discussion of Company developments and forward-looking and other material information about business and financial matters. To join the call, dial +1-973-528-0011 and provide access code 484988 at least five minutes prior to the scheduled start time. The call will also be webcast live in a listen-only format. A link to the live webcast and an archived replay will be accessible at corenergy.reit.

About CorEnergy Infrastructure Trust, Inc.

CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) is a real estate investment trust that owns and operates or leases regulated natural gas transmission and distribution lines and crude oil gathering, storage and transmission pipelines and associated rights-of-way. For more information, please visit corenergy.reit.

Forward-Looking Statements

The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company’s Quarterly Report on Form 10-Q is filed. With the exception of historical information, certain statements contained in this press release may include "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, such as those pertaining to our guidance, pursuit of growth opportunities, anticipated transportation volumes, expected rate increases, planned capital expenditures, planned dividend payment levels, planned cost reductions, potential and pending asset sales, expected ESG program updates and developments, future compliance with debt covenants. capital resources and liquidity, and our planned acts relating thereto, and results of operations and financial condition. You can identify forward-looking statements by use of words such as "will," "may," "should," "could," "believes," "expects," "anticipates," "estimates," "intends," "projects," "goals," "objectives," "targets," "predicts," "plans," "seeks," or similar expressions or other comparable terms or discussions of strategy, plans or intentions. Although CorEnergy believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including, among others, changes in economic and business conditions; a decline in oil production levels; competitive and regulatory pressures; failure to realize the anticipated benefits of requested tariff increases; risks related to the uncertainty of the projected financial information with respect to Crimson; compliance with environmental, safety and other laws; our continued ability to access debt and equity markets and comply with existing debt covenants, including those contained in the indenture governing our 5.875% Convertible Notes; our ability to regain and continue to meet NYSE continued listing standards, the failure of which could result in our capital stock being delisted thereby constituting a "fundamental change" under the indenture governing our 5.875% Convertible Notes requiring us to repurchase such notes; our ability to repurchase our outstanding 5.875% Convertible Notes upon a "fundamental change" under the indenture governing such notes; failure to complete pending asset sales on our expected timeline or at all; risks associated with climate change; risks associated with changes in tax laws and our ability to continue to qualify as a REIT; and other factors discussed in CorEnergy’s reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, CorEnergy does not assume a duty to update any forward-looking statement. In particular, any dividends paid in the future to our stockholders will depend on the actual performance of CorEnergy, its costs of leverage and other operating expenses and will be subject to the approval of CorEnergy’s Board of Directors and compliance with leverage covenants and other applicable requirements.

1 Management uses Adjusted Net Income (Loss) as a measure of profitability and CAD as a measure of long-term sustainable performance. Adjusted Net Income (Loss) and CAD are non-GAAP measures. Adjusted Net Income (Loss) represents net loss adjusted for loss on impairment of goodwill, transaction costs and restructuring costs, less gain on the sale of equipment. CAD represents Adjusted Net Income (Loss) adjusted for depreciation and amortization, amortization of debt issuance costs, stock-based compensation, and deferred tax benefit less transaction costs, restructuring costs, maintenance capital expenditures, preferred dividend requirements, and mandatory debt amortization.

2 Management uses Adjusted EBITDA as a measure of operating performance. Adjusted EBITDA represents net loss adjusted for items such as loss on the impairment of goodwill, transaction costs, restructuring costs, depreciation and amortization, stock-based compensation, income tax expense (benefit), net, interest expense, less gain on the sale of equipment. Future period non-GAAP guidance includes adjustments for special items not indicative of our core operations, which may include, without limitation, items included in the additional financial information attached to this press release. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual or unanticipated charges, expenses or gains or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this future period non-GAAP guidance to the most comparable GAAP measures. Accordingly, we are not providing such comparable GAAP measures or reconciliations in reliance on the "unreasonable efforts" exception for forward-looking non-GAAP measures set forth in SEC rules because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated without unreasonable effort and expense.

CONSOLIDATED BALANCE SHEETS

 

 

September 30, 2023

 

December 31, 2022

Assets

(Unaudited)

 

 

Property and equipment, net of accumulated depreciation of $33,417,433 and $52,908,191, respectively (Crimson VIE*: $342,285,452, and $340,205,058, respectively)

$

342,291,489

 

 

$

440,148,967

 

Leased property, net of accumulated depreciation of $— and $299,463, respectively

 

—

 

 

 

1,226,565

 

Financing notes and related accrued interest receivable, net of reserve of $50,000 and $600,000, respectively

 

659,432

 

 

 

858,079

 

Cash and cash equivalents (Crimson VIE: $2,185,021 and $1,874,319, respectively)

 

3,048,354

 

 

 

17,830,482

 

Accounts and other receivables (Crimson VIE: $11,958,653 and $10,343,769, respectively)

 

11,961,369

 

 

 

14,164,525

 

Due from affiliated companies (Crimson VIE: $6,250 and $167,743, respectively)

 

6,250

 

 

 

167,743

 

Deferred costs, net of accumulated amortization of $964,971 and $726,619, respectively

 

177,376

 

 

 

415,727

 

Inventory (Crimson VIE: $1,938,569 and $5,804,776, respectively)

 

1,938,569

 

 

 

5,950,051

 

Prepaid expenses and other assets (Crimson VIE: $5,647,976 and $3,414,372, respectively)

 

6,374,432

 

 

 

9,478,146

 

Operating right-of-use assets (Crimson VIE: $5,879,124 and $4,452,210, respectively)

 

6,010,439

 

 

 

4,722,361

 

Deferred tax asset, net (Crimson VIE: $148,742 and $—, respectively)

 

148,742

 

 

 

—

 

Assets held-for-sale

 

110,306,421

 

 

 

—

 

Total Assets

$

482,922,873

 

 

$

494,962,646

 

Liabilities and Equity

 

 

 

Secured credit facilities, net of deferred financing costs of $283,965 and $665,547, respectively

$

103,716,035

 

 

$

100,334,453

 

Unsecured convertible senior notes, net of discount and debt issuance costs of $1,233,197 and $1,726,470, respectively

 

116,816,803

 

 

 

116,323,530

 

Accounts payable and other accrued liabilities (Crimson VIE: $16,480,857 and $16,889,980, respectively)

 

19,276,291

 

 

 

26,316,216

 

Income tax payable (Crimson VIE: $— and $85,437, respectively)

 

10,965

 

 

 

174,849

 

Due to affiliated companies (Crimson VIE: $137,525 and $209,750, respectively)

 

137,525

 

 

 

209,750

 

Operating lease liability (Crimson VIE: $6,069,038 and $4,454,196, respectively)

 

6,200,354

 

 

 

4,696,410

 

Deferred tax liability, net

 

—

 

 

 

1,292,300

 

Unearned revenue (Crimson VIE: $498,721 and $203,725, respectively)

 

498,721

 

 

 

5,948,621

 

Liabilities held-for-sale

 

7,160,793

 

 

 

—

 

Total Liabilities

$

253,817,487

 

 

$

255,296,129

 

Equity

 

 

 

Series A Cumulative Redeemable Preferred Stock 7.375%, $136,690,065 liquidation preference at September 30, 2023 and $129,525,675 liquidation preference at December 31, 2022 ($2,500 per share, $0.001 par value); 69,367,000 authorized; 51,810 issued and outstanding at September 30, 2023 and December 31, 2022

$

129,525,675

 

 

$

129,525,675

 

Common stock, non-convertible, $0.001 par value; 15,353,833 and 15,253,958 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively (100,000,000 shares authorized)

 

15,354

 

 

 

15,254

 

Class B Common Stock, $0.001 par value; 683,761 shares issued and outstanding at September 30, 2023 and December 31, 2022 (11,896,100 shares authorized)

 

684

 

 

 

684

 

Additional paid-in capital

 

327,183,361

 

 

 

327,016,573

 

Retained deficit

 

(346,940,752

)

 

 

(333,785,097

)

Total CorEnergy Equity

 

109,784,322

 

 

 

122,773,089

 

Non-controlling interest

 

119,321,064

 

 

 

116,893,428

 

Total Equity

 

229,105,386

 

 

 

239,666,517

 

Total Liabilities and Equity

$

482,922,873

 

 

$

494,962,646

STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30, 2023

 

September 30, 2022

 

September 30, 2023

 

September 30, 2022

Revenue

 

 

 

 

 

 

 

Transportation and distribution

$

28,862,539

 

 

$

31,273,493

 

 

$

86,642,286

 

 

$

89,538,121

 

Pipeline loss allowance subsequent sales

 

4,077,113

 

 

 

1,477,251

 

 

 

11,087,109

 

 

 

7,283,450

 

Lease and other revenue

 

105,035

 

 

 

210,942

 

 

 

311,444

 

 

 

533,902

 

Total Revenue

 

33,044,687

 

 

 

32,961,686

 

 

 

98,040,839

 

 

 

97,355,473

 

Expenses

 

 

 

 

 

 

 

Transportation and distribution

$

18,921,495

 

 

$

17,647,673

 

 

$

54,189,582

 

 

$

45,857,193

 

Pipeline loss allowance subsequent sales cost of revenue

 

3,806,678

 

 

 

1,385,028

 

 

 

10,857,454

 

 

 

6,016,664

 

General and administrative

 

6,601,866

 

 

 

5,743,342

 

 

 

20,820,858

 

 

 

16,162,570

 

Depreciation and amortization

 

3,351,238

 

 

 

4,028,800

 

 

 

10,620,391

 

 

 

11,997,781

 

Loss on impairment of goodwill

 

—

 

 

 

16,210,020

 

 

 

—

 

 

 

16,210,020

 

Total Expenses

 

32,681,277

 

 

 

45,014,863

 

 

 

96,488,285

 

 

 

96,244,228

 

Operating Income (Loss)

$

363,410

 

 

$

(12,053,177

)

 

$

1,552,554

 

 

$

1,111,245

 

Other Income (expense)

 

 

 

 

 

 

 

Other income (expense)

$

(11,586

)

 

$

76,050

 

 

$

325,905

 

 

$

332,615

 

Interest expense

 

(4,499,316

)

 

 

(3,483,208

)

 

 

(13,330,232

)

 

 

(9,972,969

)

Total Other Expense

 

(4,510,902

)

 

 

(3,407,158

)

 

 

(13,004,327

)

 

 

(9,640,354

)

Loss before income taxes

 

(4,147,492

)

 

 

(15,460,335

)

 

 

(11,451,773

)

 

 

(8,529,109

)

Taxes

 

 

 

 

 

 

 

Current tax expense

 

2,436

 

 

 

35,187

 

 

 

12,137

 

 

 

343,108

 

Deferred tax expense (benefit)

 

160,408

 

 

 

6,182

 

 

 

(785,891

)

 

 

94,604

 

Income tax expense (benefit), net

 

162,844

 

 

 

41,369

 

 

 

(773,754

)

 

 

437,712

 

Net Loss

$

(4,310,336

)

 

$

(15,501,704

)

 

 

(10,678,019

)

 

 

(8,966,821

)

Less: Net income attributable to non-controlling interest

 

809,212

 

 

 

809,212

 

 

 

2,427,636

 

 

 

2,427,636

 

Net Loss attributable to CorEnergy Infrastructure Trust, Inc.

$

(5,119,548

)

 

$

(16,310,916

)

 

$

(13,105,655

)

 

$

(11,394,457

)

Preferred dividend requirements

 

2,388,130

 

 

 

2,388,130

 

 

 

7,164,390

 

 

 

7,164,390

 

Net Loss attributable to Common Stockholders

$

(7,507,678

)

 

$

(18,699,046

)

 

$

(20,270,045

)

 

$

(18,558,847

)

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

15,353,513

 

 

 

15,089,708

 

 

 

15,325,852

 

 

 

14,999,570

 

Basic net loss per share

$

(0.47

)

 

$

(1.18

)

 

$

(1.27

)

 

$

(1.18

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding - diluted

 

15,818,470

 

 

 

15,554,665

 

 

 

15,790,809

 

 

 

15,464,527

 

Diluted net loss per share

$

(0.47

)

 

$

(1.20

)

 

$

(1.28

)

 

$

(1.20

)

 

 

 

 

 

 

 

 

Class B Common Stock

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

683,761

 

 

 

683,761

 

 

 

683,761

 

 

 

683,761

 

Basic and diluted net loss per share

$

(0.47

)

 

$

(1.23

)

 

$

(1.27

)

 

$

(1.33

)

 

 

 

 

 

 

 

 

Dividends declared per common share

$

—

 

 

$

0.050

 

 

$

—

 

 

$

0.150

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

For the Nine Months Ended

 

September 30, 2023

 

September 30, 2022

Operating Activities

 

 

 

Net loss

$

(10,678,019

)

 

$

(8,966,821

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Deferred income tax

 

(785,891

)

 

 

94,604

 

Depreciation and amortization

 

10,620,391

 

 

 

11,997,781

 

Amortization of debt issuance costs

 

1,113,206

 

 

 

1,236,178

 

Loss on impairment of goodwill

 

—

 

 

 

16,210,020

 

Gain on sale of equipment

 

(1,074

)

 

 

(39,678

)

Stock-based compensation

 

203,213

 

 

 

384,383

 

Changes in assets and liabilities:

 

 

 

Accounts and other receivables

 

36,804

 

 

 

2,715,207

 

Inventory

 

3,865,532

 

 

 

(2,050,514

)

Prepaid expenses and other assets

 

3,248,836

 

 

 

1,782,460

 

Due from affiliated companies, net

 

89,268

 

 

 

209,943

 

Accounts payable and other accrued liabilities

 

(1,515,953

)

 

 

3,029,625

 

Income tax payable

 

(163,884

)

 

 

344,630

 

Unearned revenue

 

(390,533

)

 

 

151,295

 

Other changes, net

 

188,116

 

 

 

(100,855

)

Net cash provided by operating activities

$

5,830,012

 

 

$

26,998,258

 

Investing Activities

 

 

 

Purchases of property and equipment

 

(13,458,018

)

 

 

(7,759,603

)

Proceeds from reimbursable projects

 

971,770

 

 

 

2,385,858

 

Other changes, net

 

(882,956

)

 

 

186,992

 

Net cash used in investing activities

$

(13,369,204

)

 

$

(5,186,753

)

Financing Activities

 

 

 

Dividends paid on Series A preferred stock

 

—

 

 

 

(7,164,390

)

Dividends paid on Common Stock

 

—

 

 

 

(1,644,549

)

Distributions to non-controlling interest

 

—

 

 

 

(2,427,636

)

Advances on the Crimson Revolver

 

11,000,000

 

 

 

9,000,000

 

Payments on the Crimson Revolver

 

(1,000,000

)

 

 

(4,000,000

)

Principal payments on the Crimson Term Loan

 

(7,000,000

)

 

 

(6,000,000

)

Dividends paid on Vested RSUs

 

(16,111

)

 

 

—

 

Taxes paid for restricted stock unit withholdings

 

(68,722

)

 

 

—

 

Proceeds from financing arrangement

 

—

 

 

 

1,520,517

 

Payments on financing arrangement

 

(3,525,995

)

 

 

(1,987,382

)

Payment on note payable

 

(437,500

)

 

 

—

 

Net cash used in financing activities

$

(1,048,328

)

 

$

(12,703,440

)

Net change in Cash and Cash Equivalents

 

(8,587,520

)

 

 

9,108,065

 

Cash and Cash Equivalents at beginning of period

 

17,830,482

 

 

 

11,540,576

 

Cash and Cash Equivalents at end of period(1)

$

9,242,962

 

 

$

20,648,641

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

 

Interest paid

$

13,274,159

 

 

$

8,802,697

 

Income taxes paid (net of refunds)

 

191,000

 

 

 

(12,055

)

 

 

 

 

Non-Cash Investing Activities

 

 

 

Purchases of property, plant and equipment in accounts payable and other accrued liabilities

$

2,122,319

 

 

$

2,249,585

 

 

 

 

 

Non-Cash Financing Activities

 

 

 

Reinvestment of distributions by common stockholders in additional common shares

$

—

 

 

$

601,184

 

Dividend equivalents accrued on RSUs

 

—

 

 

 

34,145

 

Assets acquired under financing arrangement

 

—

 

 

 

307,312

 

RESULTS OF OPERATIONS (UNAUDITED)

 

 

For the Three Months Ended

For the Nine Months Ended

 

September 30, 2023

 

June 30, 2023

 

September 30, 2023

 

September 30, 2022

Revenue

 

 

 

 

 

 

 

Transportation and distribution

$

28,862,539

 

 

$

28,540,632

 

 

$

86,642,286

 

 

$

89,538,121

 

Pipeline loss allowance subsequent sales

 

4,077,113

 

 

 

7,009,996

 

 

 

11,087,109

 

 

 

7,283,450

 

Lease and other

 

105,035

 

 

 

103,352

 

 

 

311,444

 

 

 

533,902

 

Total Revenue

$

33,044,687

 

 

$

35,653,980

 

 

$

98,040,839

 

 

$

97,355,473

 

Expenses

 

 

 

 

 

 

 

Transportation and distribution

$

18,921,495

 

 

$

17,787,024

 

 

$

54,189,582

 

 

$

45,857,193

 

Pipeline loss allowance subsequent sales cost of revenue

 

3,806,678

 

 

 

7,050,776

 

 

 

10,857,454

 

 

 

6,016,664

 

General and administrative

 

6,601,866

 

 

 

7,447,410

 

 

 

20,820,858

 

 

 

16,162,570

 

Depreciation and amortization

 

3,351,238

 

 

 

3,237,526

 

 

 

10,620,391

 

 

 

11,997,781

 

Loss on impairment of goodwill

 

—

 

 

 

—

 

 

 

—

 

 

 

16,210,020

 

Total Expenses

$

32,681,277

 

 

$

35,522,736

 

 

$

96,488,285

 

 

$

96,244,228

 

Operating Income

$

363,410

 

 

$

131,244

 

 

$

1,552,554

 

 

$

1,111,245

 

 

 

 

 

 

 

 

 

Other Income (expense)

 

 

 

 

 

 

 

Interest expense

$

(4,499,316

)

 

$

(4,426,351

)

 

$

(13,330,232

)

 

$

(9,972,969

)

Other income (expense)

 

(11,586

)

 

 

195,678

 

 

 

325,905

 

 

 

332,615

 

Income tax benefit (expense), net

 

(162,844

)

 

 

932,079

 

 

 

773,754

 

 

 

(437,712

)

Net Loss

$

(4,310,336

)

 

$

(3,167,350

)

 

$

(10,678,019

)

 

$

(8,966,821

)

 

 

 

 

 

 

 

 

Other Financial Data

 

 

 

 

 

 

 

Adjusted EBITDA

$

4,809,301

 

 

$

5,848,769

 

 

$

18,057,318

 

 

$

30,922,851

 

Adjusted Net Income (Loss)

 

(3,314,966

)

 

 

(985,747

)

 

 

(5,322,764

)

 

 

8,130,006

 

Cash Available for Distribution

 

(10,780,520

)

 

 

(7,702,815

)

 

 

(24,677,382

)

 

 

1,225,664

 

 

 

 

 

 

 

 

 

Capital Expenditures:

 

 

 

 

 

 

 

Maintenance Capital

$

4,234,518

 

 

$

2,099,717

 

 

$

8,557,183

 

 

$

4,098,777

 

Expansion Capital

 

451,577

 

 

 

584,006

 

 

 

1,738,310

 

 

 

1,871,681

 

Volume:

 

 

 

 

 

 

 

Average quarterly volume (bpd) - Crude oil

 

151,953

 

 

 

156,078

 

 

 

152,927

 

 

 

166,556

 

Non-GAAP Financial Measurements (Unaudited)

The following table presents a reconciliation of Net Loss, as reported in the Consolidated Statements of Operations, to Adjusted Net Income (Loss) and CAD:

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30, 2023

 

June 30, 2023

 

September 30, 2023

 

September 30, 2022

Net Loss

$

(4,310,336

)

 

$

(3,167,350

)

 

$

(10,678,019

)

 

$

(8,966,821

)

Add:

 

 

 

 

 

 

 

Loss on impairment of goodwill

 

—

 

 

 

—

 

 

 

—

 

 

 

16,210,020

 

Transaction costs

 

995,147

 

 

 

1,857,826

 

 

 

3,348,552

 

 

 

926,485

 

Restructuring costs

 

223

 

 

 

323,777

 

 

 

2,007,777

 

 

 

—

 

Less:

 

 

 

 

 

 

 

Gain on the sale of equipment

 

—

 

 

 

—

 

 

 

1,074

 

 

 

39,678

 

Adjusted Net Income (Loss), excluding special items

$

(3,314,966

)

 

$

(985,747

)

 

$

(5,322,764

)

 

$

8,130,006

 

Add:

 

 

 

 

 

 

 

Depreciation and amortization

 

3,351,238

 

 

 

3,237,526

 

 

 

10,620,391

 

 

 

11,997,781

 

Amortization of debt issuance costs

 

339,161

 

 

 

356,054

 

 

 

1,113,207

 

 

 

1,236,178

 

Stock-based compensation

 

110,869

 

 

 

102,718

 

 

 

203,213

 

 

 

384,383

 

Deferred tax expense (benefit)

 

160,408

 

 

 

(934,704

)

 

 

(785,891

)

 

 

94,604

 

Less:

 

 

 

 

 

 

 

Transaction costs

 

995,147

 

 

 

1,857,826

 

 

 

3,348,552

 

 

 

926,485

 

Restructuring costs.

 

223

 

 

 

323,777

 

 

 

2,007,777

 

 

 

—

 

Maintenance capital expenditures

 

4,234,518

 

 

 

2,099,717

 

 

 

8,557,183

 

 

 

4,098,777

 

Preferred dividend requirements - Series A

 

2,388,130

 

 

 

2,388,130

 

 

 

7,164,390

 

 

 

7,164,390

 

Preferred dividend requirements - Non-controlling interest

 

809,212

 

 

 

809,212

 

 

 

2,427,636

 

 

 

2,427,636

 

Mandatory debt amortization

 

3,000,000

 

 

 

2,000,000

 

 

 

7,000,000

 

 

 

6,000,000

 

Cash Available for Distribution (CAD)

$

(10,780,520

)

 

$

(7,702,815

)

 

$

(24,677,382

)

 

$

1,225,664

 

The following table reconciles net cash provided by operating activities, as reported in the Consolidated Statements of Cash Flows to CAD:

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30, 2023

 

June 30, 2023

 

September 30, 2023

 

September 30, 2022

Net cash provided by operating activities

$

3,202,607

 

 

$

5,735,036

 

 

$

5,830,012

 

 

$

26,998,258

 

Changes in working capital

 

(3,551,267

)

 

 

(6,140,792

)

 

 

(5,358,185

)

 

 

(6,081,791

)

Maintenance capital expenditures

 

(4,234,518

)

 

 

(2,099,717

)

 

 

(8,557,183

)

 

 

(4,098,777

)

Preferred dividend requirements

 

(2,388,130

)

 

 

(2,388,130

)

 

 

(7,164,390

)

 

 

(7,164,390

)

Preferred dividend requirements - non-controlling interest

 

(809,212

)

 

 

(809,212

)

 

 

(2,427,636

)

 

 

(2,427,636

)

Mandatory debt amortization included in financing activities

 

(3,000,000

)

 

 

(2,000,000

)

 

 

(7,000,000

)

 

 

(6,000,000

)

Cash Available for Distribution (CAD)

$

(10,780,520

)

 

$

(7,702,815

)

 

$

(24,677,382

)

 

$

1,225,664

 

 

 

 

 

 

 

 

 

Other Special Items:

 

 

 

 

 

 

 

Transaction costs

$

995,147

 

 

$

1,857,826

 

 

$

3,348,552

 

 

$

926,485

 

Restructuring costs

 

223

 

 

 

323,777

 

 

 

2,007,777

 

 

 

—

 

 

 

 

 

 

 

 

 

Other Cash Flow Information:

 

 

 

 

 

 

 

Net cash used in investing activities

$

(5,480,176

)

 

$

(4,409,007

)

 

$

(13,369,204

)

 

$

(5,186,753

)

Net cash used in financing activities

 

(828,969

)

 

 

(331,528

)

 

 

(1,048,328

)

 

 

(12,703,440

)

The following table presents a reconciliation of Net Loss, as reported in the Consolidated Statements of Operations, to Adjusted EBITDA:

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30, 2023

 

June 30, 2023

 

September 30, 2023

 

September 30, 2022

Net Loss

$

(4,310,336

)

 

$

(3,167,350

)

 

$

(10,678,019

)

 

$

(8,966,821

)

Add:

 

 

 

 

 

 

 

Loss on impairment of goodwill

 

—

 

 

 

—

 

 

 

—

 

 

 

16,210,020

 

Transaction costs

 

995,147

 

 

 

1,857,826

 

 

 

3,348,552

 

 

 

926,485

 

Restructuring costs

 

223

 

 

 

323,777

 

 

 

2,007,777

 

 

 

—

 

Depreciation and amortization

 

3,351,238

 

 

 

3,237,526

 

 

 

10,620,391

 

 

 

11,997,781

 

Stock-based compensation

 

110,869

 

 

 

102,718

 

 

 

203,213

 

 

 

384,383

 

Income tax expense (benefit), net

 

162,844

 

 

 

(932,079

)

 

 

(773,754

)

 

 

437,712

 

Interest expense, net

 

4,499,316

 

 

 

4,426,351

 

 

 

13,330,232

 

 

 

9,972,969

 

Less:

 

 

 

 

 

 

 

Gain on the sale of equipment

 

—

 

 

 

—

 

 

 

1,074

 

 

 

39,678

 

Adjusted EBITDA

$

4,809,301

 

 

$

5,848,769

 

 

$

18,057,318

 

 

$

30,922,851

 

Source: CorEnergy Infrastructure Trust, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231107048407/en/

CorEnergy Infrastructure Trust, Inc. Investor Relations Matt Kreps or Jeff Teeven 877-699-CORR (2677) info@corenergy.reit