Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 10, 2021 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Cypress Environmental Partners, L.P. | |
Entity Central Index Key | 0001587246 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36260 | |
Entity Incorporation, State or Country Code | DE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,331,305 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 5,291 | $ 17,893 |
Trade accounts receivable, net | 13,565 | 18,420 |
Prepaid expenses and other | 1,926 | 2,033 |
Total current assets | 20,782 | 38,346 |
Property and equipment: | ||
Property and equipment, at cost | 26,858 | 26,929 |
Less: Accumulated depreciation | 17,050 | 16,470 |
Total property and equipment, net | 9,808 | 10,459 |
Intangible assets, net | 16,719 | 17,386 |
Goodwill | 50,407 | 50,389 |
Finance lease right-of-use assets, net | 538 | 607 |
Operating lease right-of-use assets | 1,831 | 1,987 |
Debt issuance costs, net | 1,079 | 242 |
Other assets | 572 | 570 |
Total assets | 101,736 | 119,986 |
Current liabilities: | ||
Accounts payable | 1,819 | 2,070 |
Accounts payable - affiliates | 5,697 | 58 |
Accrued payroll and other | 6,949 | 4,876 |
Income taxes payable | 345 | 328 |
Finance lease obligations | 250 | 250 |
Operating lease obligations | 357 | 439 |
Total current liabilities | 15,417 | 8,021 |
Long-term debt | 41,829 | 62,029 |
Finance lease obligations | 238 | 300 |
Operating lease obligations | 1,413 | 1,549 |
Other noncurrent liabilities | 339 | 182 |
Total liabilities | 59,236 | 72,081 |
Commitments and contingencies - Note 7 | ||
Partners' capital: | ||
Common units (12,331 and 12,213 units outstanding at March 31, 2021 and December 31, 2020, respectively) | 23,581 | 27,507 |
Preferred units (5,769 units outstanding at March 31, 2021 and December 31, 2020) | 45,324 | 44,291 |
General partner | (25,876) | (25,876) |
Accumulated other comprehensive loss | (2,708) | (2,655) |
Total partners' capital | 40,321 | 43,267 |
Noncontrolling interests | 2,179 | 4,638 |
Total owners' equity | 42,500 | 47,905 |
Total liabilities and owners' equity | $ 101,736 | $ 119,986 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common units outstanding (in shares) | 12,331 | 12,213 |
Preferred units outstanding (in shares) | 5,769 | 5,769 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 26,946 | $ 68,483 |
Costs of services | 24,050 | 60,528 |
Gross margin | 2,896 | 7,955 |
Operating costs and expense: | ||
General and administrative | 4,326 | 5,940 |
Depreciation, amortization and accretion | 1,239 | 1,208 |
Gain on asset disposals, net | (37) | (12) |
Operating (loss) income | (2,632) | 819 |
Other (expense) income: | ||
Interest expense, net | (802) | (1,124) |
Foreign currency gain (loss) | 69 | (457) |
Other, net | 116 | 105 |
Net loss before income tax (benefit) expense | (3,249) | (657) |
Income tax (benefit) expense | (102) | 220 |
Net loss | (3,147) | (877) |
Net loss attributable to noncontrolling interests | (494) | (88) |
Net loss attributable to limited partners | (2,653) | (789) |
Net income attributable to preferred unitholder | 1,033 | 1,033 |
Net loss attributable to common unitholders | $ (3,686) | $ (1,822) |
Net loss per common limited partner unit: | ||
Basic and diluted (in dollars per share) | $ (0.30) | $ (0.15) |
Weighted average common units outstanding: | ||
Basic and diluted (in units) | 12,243 | 12,096 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (3,147) | $ (877) |
Other comprehensive (loss) income - foreign currency translation | (53) | 348 |
Comprehensive loss | (3,200) | (529) |
Comprehensive loss attributable to noncontrolling interests | (494) | (88) |
Comprehensive income attributable to preferred unitholder | 1,033 | 1,033 |
Comprehensive loss attributable to common unitholders | $ (3,739) | $ (1,474) |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Owners' Equity - USD ($) $ in Thousands | Common Units [Member] | Preferred Units [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interests [Member] | General Partner [Member] | Total |
Owners' equity, beginning at Dec. 31, 2019 | $ 37,334 | $ 44,291 | $ (2,577) | $ 5,019 | $ (25,876) | $ 58,191 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (1,822) | 1,033 | (88) | (877) | ||
Foreign currency translation adjustment | 348 | 348 | ||||
Distributions | (2,534) | (1,033) | (26) | (3,593) | ||
Equity-based compensation expense | 264 | 264 | ||||
Taxes paid related to net share settlement of equity-based compensation | (138) | (138) | ||||
Owners' equity, ending at Mar. 31, 2020 | 33,104 | 44,291 | (2,229) | 4,905 | (25,876) | 54,195 |
Owners' equity, beginning at Dec. 31, 2020 | 27,507 | 44,291 | (2,655) | 4,638 | (25,876) | 47,905 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (3,686) | 1,033 | (494) | (3,147) | ||
Foreign currency translation adjustment | (53) | (53) | ||||
Distributions | (1,965) | (1,965) | ||||
Equity-based compensation expense | 253 | 253 | ||||
Equity-based compensation reclassified to liabilities | (266) | (266) | ||||
Taxes paid related to net share settlement of equity-based compensation | (227) | (227) | ||||
Owners' equity, ending at Mar. 31, 2021 | $ 23,581 | $ 45,324 | $ (2,708) | $ 2,179 | $ (25,876) | $ 42,500 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net loss | $ (3,147) | $ (877) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation, amortization and accretion | 1,443 | 1,480 |
Gain on asset disposals, net | (37) | (12) |
Interest expense from debt issuance cost amortization | 180 | 144 |
Equity-based compensation expense | 253 | 264 |
Equity in earnings of investee | (73) | (42) |
Distributions from investee | 75 | |
Foreign currency (gains) losses | (69) | 457 |
Changes in assets and liabilities: | ||
Trade accounts receivable | 4,855 | 7,698 |
Prepaid expenses and other | 142 | (577) |
Accounts payable and accounts payable - affiliates | 5,277 | (1,197) |
Accrued payroll and other and other noncurrent liabilities | 1,967 | (3,154) |
Income taxes payable | 17 | 221 |
Net cash provided by operating activities | 10,883 | 4,405 |
Investing activities: | ||
Proceeds from fixed asset disposals | 41 | 26 |
Purchase of property and equipment, excluding finance leases | (36) | (1,055) |
Net cash provided by (used in) investing activities | 5 | (1,029) |
Financing activities: | ||
Borrowings on credit facility | 32,000 | |
Payments on credit facility | (20,200) | (5,000) |
Debt issuance cost payments | (938) | (19) |
Payments on finance lease obligations | (60) | (61) |
Taxes paid related to net share settlement of equity-based compensation | (227) | (138) |
Distributions | (1,965) | (3,593) |
Net cash (used in) provided by financing activities | (23,390) | 23,189 |
Effect of exchange rates on cash | (7) | |
Net (decrease) increase in cash and cash equivalents | (12,502) | 26,558 |
Cash and cash equivalents, beginning of period (includes restricted cash equivalents of $651 and $551 at December 31, 2020 and December 31, 2019, respectively) | 18,544 | 16,251 |
Cash and cash equivalents, end of period (includes restricted cash equivalents of $751 and $551 at March 31, 2021 and March 31, 2020) | 6,042 | 42,809 |
Non-cash items: | ||
Accounts payable and accrued payroll and other excluded from capital expenditures | $ 24 | 366 |
Acquisitions of finance leases included in liabilities | $ 247 |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Cash Flows [Abstract] | ||||
Restricted cash equivalents | $ 751 | $ 651 | $ 551 | $ 551 |
Organization and Operations
Organization and Operations | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | 1. Organization and Operations Cypress Environmental Partners, L.P. (“we”, “us”, “our”, or the “Partnership”) is a Delaware limited partnership formed in 2013. We offer essential services that help protect the environment and ensure sustainability. We provide a wide range of environmental services including independent inspection, integrity, and support services for pipeline and energy infrastructure owners and operators and public utilities. We also provide water pipelines, hydrocarbon recovery, disposal, and water treatment services. Trading of our common units began January 15, 2014 on the New York Stock Exchange under the symbol “CELP”. Our business is organized into the Inspection Services (“Inspection Services”), Pipeline & Process Services (“Pipeline & Process Services”), and Water and Environmental Services (“Environmental Services”) segments. The Inspection Services segment generates revenue by providing essential environmental services including inspection and integrity services on a variety of infrastructure assets including midstream pipelines, gathering systems, and distribution systems. Services include nondestructive examination, in-line inspection support, pig tracking, survey, data gathering, and supervision of third-party contractors. We typically charge our customers a daily or hourly fee for our services, in addition to per diem, mileage, and other reimbursable items. Revenue and costs are subject to seasonal variations and interim activity may not be indicative of yearly activity, considering that many of our customers develop yearly operating budgets and enter into contracts with us during the winter season for work to be performed during the remainder of the year. Additionally, inspection work throughout the United States during the winter months (especially in the northern states) may be hampered or delayed due to inclement weather. The Pipeline & Process Services segment generates revenue primarily by providing essential environmental services, including hydrostatic testing services and chemical cleaning of newly-constructed and existing pipelines and related infrastructure. Our customers include energy companies and pipeline construction companies. We generally charge our customers on a fixed-bid basis, depending on the size and length of the pipeline being tested and the complexity of services provided. Revenue and costs are subject to seasonal variations, and interim activity may not be indicative of yearly activity, considering that many of our customers develop yearly operating budgets and enter into contracts with us for work to be performed during the remainder of the year. Additionally, field work during the winter months may be hampered or delayed due to inclement weather. The Environmental Services segment owns and operates nine water treatment facilities with ten EPA Class II injection wells in the Bakken shale region of the Williston Basin in North Dakota. We wholly-own eight of these water treatment facilities and we own a 25% interest in the remaining facility. These water treatment facilities are connected to thirteen pipeline gathering systems, including two that we developed and own. We specialize in the treatment, recovery, separation, and disposal of waste byproducts generated during the lifecycle of an oil and natural gas well to protect the environment and our drinking water. All of the water treatment facilities utilize specialized equipment and remote monitoring to minimize the facilities’ downtime and increase the facilities’ efficiency for peak utilization. Revenue is generated on a fixed-fee per barrel basis for receiving, separating, filtering, recovering, processing, and injecting produced and flowback water. We also sell recovered oil, receive fees for transportation of water via pipeline, and receive fees from a partially owned water treatment facility for management and staffing services (see Note 6). |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The Unaudited Condensed Consolidated Financial Statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 include our accounts and those of our controlled subsidiaries. All intercompany transactions and account balances have been eliminated in consolidation. Investments over which we exercise significant influence, but do not control, are accounted for using the equity method of accounting. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2020 is derived from our audited financial statements. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Unaudited Condensed Consolidated Financial Statements include all adjustments considered necessary for a fair presentation of the consolidated financial position and consolidated results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the Unaudited Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for complete consolidated financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim Unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2020 included in our Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year. Certain previously-reported amounts have been reclassified to conform to the current presentation. Use of Estimates in the Preparation of Financial Statements The preparation of our Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. The COVID - Significant Accounting Policies Our significant accounting policies are consistent with those described in Note 2 to our audited consolidated financial statements as of and for the year ended December 31, 2020. Goodwill We have $50.4 million of goodwill on our Unaudited Condensed Consolidated Balance Sheet at March 31, 2021. Of this amount, $40.3 million relates to the Inspection Services segment and $10.1 million relates to the Environmental Services segment. Goodwill is not amortized, but is subject to annual assessments on November 1 (or at other dates if events or changes in circumstances indicate that the carrying value of goodwill may be impaired) for impairment at a reporting unit level. The reporting units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed and operated. We have determined that our Inspection Services and Environmental Services operating segments are the appropriate reporting units for testing goodwill impairment. To perform a goodwill impairment assessment, we first evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If this assessment reveals that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, we then determine the estimated fair market value of the reporting unit. If the carrying amount exceeds the reporting unit’s fair value, we record a goodwill impairment charge for the excess (not exceeding the carrying value of the reporting unit’s goodwill). For our Inspection Services and Environmental Services segments, we performed qualitative goodwill impairment analyses at March 31, 2021 and concluded that the fair values of the reporting units were more likely than not greater than their carrying values. Our evaluation included various qualitative factors, including current and projected earnings, current customer relationships and projects, and the impact of commodity prices on our earnings. The qualitative assessment on these reporting units indicated that there was no need to conduct further quantitative testing for goodwill impairment. The use of different assumptions and estimates from the assumptions and estimates we used in our qualitative analyses could have resulted in the requirement to perform quantitative goodwill impairment analyses. It is reasonably possible that changes could occur that would require a goodwill impairment charge in the future. For the Inspection Services segment, such changes could include, among others, a slower than expected recovery in demand for inspection and integrity services and increased pessimism among market participants, which could increase the discount rate on (and therefore reduce the value of) estimated future cash flows. For the Environmental Services segment, such changes could include, among others, a slower than expected recovery in demand for petroleum products, an increase in supply from other areas (or other factors) that result in reduced production in North Dakota, and increased pessimism among market participants, which could increase the discount rate on (and therefore reduce the value of) estimated future cash flows. Accounts Receivable and Allowance for Bad Debts We grant unsecured credit to customers under normal industry standards and terms and have established policies and procedures that allow for an evaluation of the creditworthiness of each of our customers. We typically receive payment from our customers 45 to 90 days after the services have been performed. We determine allowances for bad debts based on management’s assessment of the creditworthiness of our customers. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when cash is received. As of both March 31, 2021 and December 31, 2020, we had an allowance for doubtful accounts of $0.5 million. Accrued Payroll and Other Accrued payroll and other March 31, 2021 December 31, 2020 (in thousands) Accrued payroll $ 4,006 $ 1,799 Customer deposits and accruals 1,855 2,118 Other 1,088 959 $ 6,949 $ 4,876 Revenue Recognition Under Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Based on this accounting guidance, our revenue is earned and recognized through the service offerings of our three reportable business segments. Our sales contracts have terms of less than one year. As such, we have used the practical expedient contained within the accounting guidance which exempts us from the requirement to disclose the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract with an original expected duration of one year or less. We apply judgment in determining whether we are the principal or the agent in instances where we utilize subcontractors to perform all or a portion of the work under our contracts. Based on the criteria in ASC 606, we have determined we are principal in all such circumstances. As of March 31, 2021, and December 31, 2020, we recognized a refund liability of $0.8 million within our Inspection Services segment for revenue associated with variable consideration. In addition, we have recorded other refund liabilities of $0.8 million at March 31, 2021 and December 31, 2020. Foreign Currency Translation Our Unaudited Condensed Consolidated Financial Statements are reported in U.S. dollars. We translate our Canadian-dollar-denominated assets and liabilities into U.S. dollars at the exchange rate in effect at the balance sheet date. We translate our Canadian-dollar-denominated revenues and expenses into U.S. dollars at the average exchange rate in effect during the period in which the applicable revenues and expenses were recorded. Our Unaudited Condensed Consolidated Balance Sheet at March 31, 2021 includes $2.7 million of accumulated other comprehensive loss accumulated other comprehensive loss partners’ capital net (loss) income foreign currency gain (loss) New Accounting Standards Accounting guidance proposed by the FASB that may impact our Unaudited Condensed Consolidated Financial Statements, which we have not yet adopted, includes: The FASB issued ASU 2016-13 – Financial Instruments – Credit Losses in June 2016, which replaces the current “incurred loss” methodology for recognizing credit losses with an “expected loss” methodology. This guidance affects trade receivables, financial assets and certain other instruments that are not measured at fair value through net income. In November 2019, the FASB issued final guidance to delay the implementation of this new guidance for smaller reporting companies until fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact this ASU will have on our Unaudited Condensed Consolidated Financial Statements. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 3. Debt We are party to a credit agreement (the “Credit Agreement”) with a syndicate of seven banks, with Deutsche Bank Trust Company Americas serving as the Administrative Agent. The obligations under the Credit Agreement are secured by a first priority lien on substantially all of our assets. The Credit Agreement was amended in March 2021. As amended, the Credit Agreement has a total capacity of $75.0 million, subject to various customary covenants and restrictive provisions, and matures on May 31, 2022. Outstanding borrowings at March 31, 2021 and December 31, 2020 were $41.8 million and $62.0 million, respectively, and are reflected as long-term debt on the Unaudited Condensed Consolidated Balance Sheets. We also had $0.5 million and $0.6 million of finance lease liabilities at March 31, 2021 and December 31, 2020, respectively, that count as indebtedness under the Credit Agreement. The average debt balance outstanding was $60.6 million and $77.8 million during the three months ended March 31, 2021 and 2020, respectively. All borrowings under the Credit Agreement bear interest, at our option, on a leveraged based grid pricing at (i) a base rate plus a margin of 2.00% to 3.75% per annum (“Base Rate Borrowing”) or (ii) an adjusted LIBOR rate plus a margin of 3.00% to 4.75% per annum (“LIBOR Borrowings”). The applicable margin is determined based on our leverage ratio, as defined in the Credit Agreement. The interest rate on our borrowings ranged between 3.61% and 4.37% for the three months ended March 31, 2021 and 3.61% and 4.80% for the three months ended March 31, 2020. As of March 31, 2021, the interest rate in effect on our outstanding borrowings was 4.36%. Interest on Base Rate Borrowings is payable monthly. Interest on LIBOR Borrowings is paid upon maturity of the underlying LIBOR contract, but no less often than quarterly. Commitment fees are charged at a rate of 0.50% on any unused credit and are payable quarterly. Interest paid, including commitment fees, was $0.6 million and $0.9 million for the three months ended March 31, 2021 and 2020, respectively. The Credit Agreement contains various customary covenants and restrictive provisions. The Credit Agreement also requires us to maintain certain financial covenants, including a leverage ratio and an interest coverage ratio. The interest coverage ratio is calculated as the trailing-twelve-month EBITDA (as defined in the Credit Agreement) divided by trailing-twelve-month pro forma interest expense (as defined in the Credit Agreement). The minimum interest coverage ratio is 3.0 at each quarter end. At March 31, 2021 and December 31, 2020, our interest coverage ratios were 4.4 and 5.0, respectively. The leverage ratio is calculated as the debt outstanding (inclusive of finance leases) divided by trailing-twelve-month EBITDA (as defined in the Credit Agreement). The maximum leverage ratio is 6.0 at March 31, 2021, 5.3 at June 30, 2021, 4.5 at September 30, 2021, and 4.0 at December 31, 2021. At March 31, 2021 and December 31, 2020, our leverage ratios were 5.2 and 5.4, respectively. As of March 31, 2021, we were in compliance with all covenants of the Credit Agreement. However, maintaining compliance with the covenants in the future will require us to generate a sufficient level of EBITDA, which will be dependent on the level of activity in the markets we serve and on our ability to win awards for work from our customers. Based on our forecasts, we do not expect to meet one or both of the financial covenant ratios. If this were to occur, and if we were unable to obtain from the lenders a waiver of the covenant violation, we would be in default on the Credit Agreement. Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the Credit Agreement, the lenders may declare any outstanding principal, together with any accrued and unpaid interest, to be immediately due and payable and may exercise the other remedies set forth or referred to in the Credit Agreement. Because of these covenants and the potential consequences of not maintaining compliance with them, management has concluded that there is substantial doubt about the Partnership's ability to continue as a going concern. The Credit Agreement contains significant limitations on our ability to pay cash distributions. We may only pay the following cash distributions: ● distributions to common and preferred unitholders, to the extent of income taxes estimated to be payable by these unitholders resulting from allocations of our earnings; ● distributions to the preferred unitholder up to $1.1 million per year, if our leverage ratio is 4.0 or lower; and ● distributions to the noncontrolling interest owners of CBI and CF Inspection. In addition, the Credit Agreement restricts our ability to redeem or repurchase our equity interests. The Credit Agreement requires us to make payments to reduce the outstanding balance if, for any consecutive period of five business days, our cash on hand (less amounts expected to be paid in the following five business days) exceeds $10.0 million. Debt issuance costs are reported as debt issuance costs, net The carrying value of our long-term debt approximates fair value, as the borrowings under the Credit Agreement are considered to be priced at market for debt instruments having similar terms and conditions (Level 2 of the fair value hierarchy). In April 2021, we borrowed $8.5 million on the Credit Agreement. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 4. Income Taxes As a limited partnership, we are generally not subject to U.S. federal or state income taxes. Our income tax provision relates primarily to (1) our U.S. corporate subsidiaries that provide services to public utility customers, which may not fit within the definition of qualified income as it is defined in the Internal Revenue Code, Regulations, and other guidance, which subjects this income to U.S. federal and state income taxes, (2) our Canadian subsidiary, which is subject to Canadian federal and provincial income taxes, and (3) certain other state income taxes, including the Texas franchise tax. As a publicly-traded partnership, we are subject to a statutory requirement that 90% of our total gross income represents “qualifying income” (as defined by the Internal Revenue Code, related Treasury Regulations, and Internal Revenue Service pronouncements), determined on a calendar-year basis. If our qualifying income does not meet this statutory requirement, we could be taxed as a corporation for federal and state income tax purposes. Our income has met the statutory qualifying income requirement each year since our initial public offering. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | 5. Equity Series A Preferred Units On May 29, 2018 (the “Closing Date”), we sold 5,769,231 Series A Preferred Units representing limited partner interests in the Partnership (the “Preferred Units”) to an affiliate (“the Purchaser”) for a cash purchase price of $7.54 per Preferred Unit, resulting in gross proceeds of $43.5 million. The Purchaser is entitled to receive quarterly distributions that represent an annual return of 9.5% on the Preferred Units. Of this 9.5% annual return, we have the option to pay 7.0% in kind (in the form of issuing additional preferred units) for the first twelve quarters after the Closing Date. The Preferred Units rank senior to our common units, and we must pay distributions on the Preferred Units (including any arrearages) before paying distributions on our common units. In addition, the Preferred Units rank senior to the common units with respect to rights upon liquidation. As described in Note 3, our Credit Agreement, as amended in March 2021, places significant restrictions on our ability to pay cash distributions on the Preferred Units. After the third anniversary of the Closing Date, the Purchaser will have the option to convert the Preferred Units into common units on a one-for- one basis. If certain conditions are met after the third anniversary of the Closing Date, we will have the option to cause the Preferred Units to convert to common units. After the third anniversary of the Closing Date, we will also have the option to redeem the Preferred Units. We may redeem the Preferred Units (a) at any time after the third anniversary of the Closing Date and on or prior to the fourth anniversary of the Closing Date at a redemption price equal to 105% of the issue price, and (b) at any time after the fourth anniversary of the Closing Date at a redemption price equal to 101% of the issue price. At-the-Market Equity Program In April 2018, we established an at-the-market equity program (“ATM Program”), which will allow us to offer and sell common units from time to time, to or through the sales agent under the ATM Program, up to an aggregate offering amount of $10.0 million. We are under no obligation to sell any common units under this program. As of the date of this filing, we have not sold any common units under the ATM Program and, as such, have not received any net proceeds or paid any compensation to the sales agent under the ATM Program. Employee Unit Purchase Plan In November 2019, we established an employee unit purchase plan (“EUPP”), which will allow us to offer and sell up to 500,000 common units. Employees can elect to have up to 10 percent of their annual base pay withheld to purchase common units, subject to terms and limitations of the EUPP. The purchase price of the common units is 95% of the volume weighted average of the closing sales prices of our common units on the ten immediately preceding trading days at the end of each offering period. There have been no common unit issuances under the EUPP. Net Loss per Unit Our net loss Income attributable to our preferred unitholder Net (loss) income attributable to noncontrolling interests Net loss income attributable to common unitholders Basic net loss per common limited partner unit net loss attributable to common unitholders Diluted loss per common limited partner unit The following table summarizes the calculation of the basic net loss per common limited partner unit Three Months Ended March 31, 2021 2020 (in thousands, except per unit data) Net loss attributable to common unitholders $ (3,686 ) $ (1,822 ) Weighted average common units outstanding 12,243 12,096 Basic and diluted net loss per common limited partner unit $ (0.30 ) $ (0.15 ) For the three months ended March 31, 2021 and 2020, the preferred units and the long-term incentive plan unvested units would have been antidilutive, and therefore diluted net loss per common limited partner unit basic net loss per common limited partner unit . Distributions We paid common unit distributions of $2.5 million in February 2020 and $2.6 million in May 2020. In July 2020, in light of the challenging market conditions, we made the difficult decision to temporarily suspend payment of common unit distributions. This has enabled us to retain more cash to manage our financing needs. As described in Note 3, our Credit Agreement, as amended in March 2021, contains significant restrictions on our ability to pay cash distributions on common units. We paid four preferred unit distributions of $1.0 million each in 2020. As described in Note 3, our Credit Agreement, as amended in March 2021, contains significant restrictions on our ability to pay cash distributions on preferred units. We have not paid any preferred unit distributions thus far in 2021. CBI’s company agreement generally requires CBI to make an annual distribution to its members equal to or greater than the amount of CBI’s taxable income multiplied by the maximum federal income tax rate. In March 2021, CBI declared and paid a distribution of $4.0 million, of which $2.0 million was distributed to us and the remainder was distributed to noncontrolling interest owners. Long-Term Incentive Plan ("LTIP") During March 2021, four members of our Board of Directors (“Directors”) elected to have their LTIP units net settled upon vesting for tax withholding purposes. As the Directors are not considered employees under the IRS statutory withholding requirements, any unit withholding upon settlement is considered an excess withholding, resulting in liability accounting treatment for the entire award. The modification of these awards from equity awards to liability awards did not result in the recognition of any additional compensation cost. As of March 31, 2021, we recorded $0.3 million of liabilities in accrued payroll and other other noncurrent liabilities |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 6. Related-Party Transactions Holdings We are party to an omnibus agreement with Holdings and other related parties. The omnibus agreement provides for, among other things, our right of first offer on Holdings’ and its subsidiaries’ assets used in, and entities primarily engaged in, providing water treatment and other water and environmental services. So long as Holdings controls our General Partner, the omnibus agreement will remain in full force and effect, unless we and Holdings agree to terminate it sooner. If Holdings ceases to control our General Partner, either party may terminate the omnibus agreement. We and Holdings may agree to further amend the omnibus agreement; however, amendments that the General Partner determines are adverse to our unitholders will also require the approval of the Conflicts Committee of our Board of Directors. Because of our limited partnership structure, all of the employees who conduct our business are employed by affiliates of Holdings, although we often refer to these individuals in this report as our employees. We generally reimburse Holdings for the compensation costs associated with these employees. Alati Arnegard, LLC The Partnership provides management services to a 25% owned company, Alati Arnegard, LLC (“Arnegard”), which is part of the Environmental Services segment. We recorded earnings from this investment of less than $0.1 million for each of the three months ended March 31, 2021 and 2020, respectively. These earnings are recorded in other, net equity in earnings of investee revenue trade accounts receivable, net other assets CF Inspection Management, LLC We have also entered into a joint venture with CF Inspection, a nationally-qualified woman-owned business. CF Inspection allows us to offer various services to clients that require the services of an approved Women’s Business Enterprise, as CF Inspection is certified as a Women’s Business Enterprise by the Supplier Clearinghouse in California and as a National Women’s Business Enterprise by the Women’s Business Enterprise National Council. We own 49% of CF Inspection and Cynthia A. Field, an affiliate of Holdings and a Director of our General Partner, owns the remaining 51% of CF Inspection Continental Resources, Inc. A member of our Board of Directors is the President and Chief Operating Officer of Continental Resources, Inc. ("Continental"). Our Environmental Services segment began providing water treatment services to Continental at the end of 2020. Revenues from Continental during the three months ended March 31, 2021 were $0.2 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Security Deposits We have various obligations that are secured with short-term security deposits totaling $0.8 million and $0.7 million at March 31, 2021 and December 31, 2020, respectively. These amounts are reported in restricted cash equivalents in our Unaudited Condensed Consolidated Statements of Cash Flows and in prepaid expenses and other Compliance Audit Contingencies Certain agreements with customers offer our customers the right to perform periodic compliance audits, which include the examination of the accuracy of our invoices. Should our invoices be determined to be inconsistent with the agreements, the agreements may provide the customer the right to receive a credit or refund for overcharges identified. At any given time, we may have multiple audits ongoing. As of March 31, 2021 and December 31, 2020, we established reserves of $0.3 million as estimates of potential liabilities related to these compliance audit contingencies . Legal Proceedings We are and may in the future be subject to litigation involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, including claims regarding the Fair Labor Standards Act and state wage and hour laws, and, in some instances, we may be allocated risk through our contract terms for actions by our customers or other third parties. Claims related to the Fair Labor Standards Act are generally not covered by insurance. From time to time, we are subject to various claims, lawsuits and other legal proceedings brought or threatened against us in the ordinary course of our business. These actions and proceedings may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination and other employment-related damages, breach of contract, property damage, environmental liabilities, multiemployer pension plan withdrawal liabilities, punitive damages and civil penalties or other losses, liquidated damages, consequential damages, or injunctive or declaratory relief. The outcome of related litigation is unknown at this time but could be material to our financial statements in future periods. |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segments | 8. Reportable Segments Our operations consist of three reportable segments: (i) Inspection Services, (ii) Pipeline & Process Services, and (iii)Water and Environmental Services (“Environmental Services”). The amounts within “Other” represent corporate and overhead items not specifically allocable to the other reportable segments. Inspection Pipeline and Environmental Services Process Services Services Other Total Three months ended March 31, 2021 Revenue $ 25,452 $ 322 $ 1,172 $ — $ 26,946 Costs of services 22,830 820 400 — 24,050 Gross margin 2,622 (498 ) 772 — 2,896 General and administrative 3,205 430 435 256 4,326 Depreciation, amortization and accretion 552 136 427 124 1,239 Gains on asset disposals, net — (37 ) — — (37 ) Operating loss $ (1,135 ) $ (1,027 ) $ (90 ) $ (380 ) (2,632 ) Interest expense, net (802 ) Gains on foreign currency 69 Other, net 116 Net loss before income tax (benefit) expense $ (3,249 ) Three months ended March 31, 2020 Revenue $ 63,895 $ 2,922 $ 1,666 $ — $ 68,483 Costs of services 57,523 2,361 644 — 60,528 Gross margin 6,372 561 1,022 — 7,955 General and administrative 4,518 640 557 225 5,940 Depreciation, amortization and accretion 556 145 411 96 1,208 (Gain) loss on asset disposals, net — (26 ) 14 — (12 ) Operating income (loss) $ 1,298 $ (198 ) $ 40 $ (321 ) 819 Interest expense, net (1,124 ) Losses on foreign currency (457 ) Other, net 105 Net loss before income tax expense $ (657 ) Total Assets March 31, 2021 $ 71,450 $ 5,840 $ 19,250 $ 5,196 $ 101,736 December 31, 2020 $ 82,458 $ 11,988 $ 19,708 $ 5,832 $ 119,986 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Unaudited Condensed Consolidated Financial Statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 include our accounts and those of our controlled subsidiaries. All intercompany transactions and account balances have been eliminated in consolidation. Investments over which we exercise significant influence, but do not control, are accounted for using the equity method of accounting. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2020 is derived from our audited financial statements. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Unaudited Condensed Consolidated Financial Statements include all adjustments considered necessary for a fair presentation of the consolidated financial position and consolidated results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the Unaudited Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for complete consolidated financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim Unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2020 included in our Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year. Certain previously-reported amounts have been reclassified to conform to the current presentation. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of our Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. The COVID - |
Goodwill | Goodwill We have $50.4 million of goodwill on our Unaudited Condensed Consolidated Balance Sheet at March 31, 2021. Of this amount, $40.3 million relates to the Inspection Services segment and $10.1 million relates to the Environmental Services segment. Goodwill is not amortized, but is subject to annual assessments on November 1 (or at other dates if events or changes in circumstances indicate that the carrying value of goodwill may be impaired) for impairment at a reporting unit level. The reporting units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed and operated. We have determined that our Inspection Services and Environmental Services operating segments are the appropriate reporting units for testing goodwill impairment. To perform a goodwill impairment assessment, we first evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If this assessment reveals that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, we then determine the estimated fair market value of the reporting unit. If the carrying amount exceeds the reporting unit’s fair value, we record a goodwill impairment charge for the excess (not exceeding the carrying value of the reporting unit’s goodwill). For our Inspection Services and Environmental Services segments, we performed qualitative goodwill impairment analyses at March 31, 2021 and concluded that the fair values of the reporting units were more likely than not greater than their carrying values. Our evaluation included various qualitative factors, including current and projected earnings, current customer relationships and projects, and the impact of commodity prices on our earnings. The qualitative assessment on these reporting units indicated that there was no need to conduct further quantitative testing for goodwill impairment. The use of different assumptions and estimates from the assumptions and estimates we used in our qualitative analyses could have resulted in the requirement to perform quantitative goodwill impairment analyses. It is reasonably possible that changes could occur that would require a goodwill impairment charge in the future. For the Inspection Services segment, such changes could include, among others, a slower than expected recovery in demand for inspection and integrity services and increased pessimism among market participants, which could increase the discount rate on (and therefore reduce the value of) estimated future cash flows. For the Environmental Services segment, such changes could include, among others, a slower than expected recovery in demand for petroleum products, an increase in supply from other areas (or other factors) that result in reduced production in North Dakota, and increased pessimism among market participants, which could increase the discount rate on (and therefore reduce the value of) estimated future cash flows. |
Accounts Receivable and Allowance for Bad Debts | Accounts Receivable and Allowance for Bad Debts We grant unsecured credit to customers under normal industry standards and terms and have established policies and procedures that allow for an evaluation of the creditworthiness of each of our customers. We typically receive payment from our customers 45 to 90 days after the services have been performed. We determine allowances for bad debts based on management’s assessment of the creditworthiness of our customers. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when cash is received. As of both March 31, 2021 and December 31, 2020, we had an allowance for doubtful accounts of $0.5 million. |
Accrued Payroll and Other | Accrued Payroll and Other Accrued payroll and other March 31, 2021 December 31, 2020 (in thousands) Accrued payroll $ 4,006 $ 1,799 Customer deposits and accruals 1,855 2,118 Other 1,088 959 $ 6,949 $ 4,876 |
Revenue Recognition | Revenue Recognition Under Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Based on this accounting guidance, our revenue is earned and recognized through the service offerings of our three reportable business segments. Our sales contracts have terms of less than one year. As such, we have used the practical expedient contained within the accounting guidance which exempts us from the requirement to disclose the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract with an original expected duration of one year or less. We apply judgment in determining whether we are the principal or the agent in instances where we utilize subcontractors to perform all or a portion of the work under our contracts. Based on the criteria in ASC 606, we have determined we are principal in all such circumstances. As of March 31, 2021, and December 31, 2020, we recognized a refund liability of $0.8 million within our Inspection Services segment for revenue associated with variable consideration. In addition, we have recorded other refund liabilities of $0.8 million at March 31, 2021 and December 31, 2020. |
Foreign Currency Translation | Foreign Currency Translation Our Unaudited Condensed Consolidated Financial Statements are reported in U.S. dollars. We translate our Canadian-dollar-denominated assets and liabilities into U.S. dollars at the exchange rate in effect at the balance sheet date. We translate our Canadian-dollar-denominated revenues and expenses into U.S. dollars at the average exchange rate in effect during the period in which the applicable revenues and expenses were recorded. Our Unaudited Condensed Consolidated Balance Sheet at March 31, 2021 includes $2.7 million of accumulated other comprehensive loss accumulated other comprehensive loss partners’ capital net (loss) income foreign currency gain (loss) |
New Accounting Standards | New Accounting Standards Accounting guidance proposed by the FASB that may impact our Unaudited Condensed Consolidated Financial Statements, which we have not yet adopted, includes: The FASB issued ASU 2016-13 – Financial Instruments – Credit Losses in June 2016, which replaces the current “incurred loss” methodology for recognizing credit losses with an “expected loss” methodology. This guidance affects trade receivables, financial assets and certain other instruments that are not measured at fair value through net income. In November 2019, the FASB issued final guidance to delay the implementation of this new guidance for smaller reporting companies until fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact this ASU will have on our Unaudited Condensed Consolidated Financial Statements. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of accrued payroll and other | Accrued payroll and other March 31, 2021 December 31, 2020 (in thousands) Accrued payroll $ 4,006 $ 1,799 Customer deposits and accruals 1,855 2,118 Other 1,088 959 $ 6,949 $ 4,876 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of the calculation of the basic net loss income per common limited partner unit | The following table summarizes the calculation of the basic net loss per common limited partner unit Three Months Ended March 31, 2021 2020 (in thousands, except per unit data) Net loss attributable to common unitholders $ (3,686 ) $ (1,822 ) Weighted average common units outstanding 12,243 12,096 Basic and diluted net loss per common limited partner unit $ (0.30 ) $ (0.15 ) |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of operating income (loss) by reportable segment and a reconciliation of segment operating income to net income | Our operations consist of three reportable segments: (i) Inspection Services, (ii) Pipeline & Process Services, and (iii)Water and Environmental Services (“Environmental Services”). The amounts within “Other” represent corporate and overhead items not specifically allocable to the other reportable segments. Inspection Pipeline and Environmental Services Process Services Services Other Total Three months ended March 31, 2021 Revenue $ 25,452 $ 322 $ 1,172 $ — $ 26,946 Costs of services 22,830 820 400 — 24,050 Gross margin 2,622 (498 ) 772 — 2,896 General and administrative 3,205 430 435 256 4,326 Depreciation, amortization and accretion 552 136 427 124 1,239 Gains on asset disposals, net — (37 ) — — (37 ) Operating loss $ (1,135 ) $ (1,027 ) $ (90 ) $ (380 ) (2,632 ) Interest expense, net (802 ) Gains on foreign currency 69 Other, net 116 Net loss before income tax (benefit) expense $ (3,249 ) Three months ended March 31, 2020 Revenue $ 63,895 $ 2,922 $ 1,666 $ — $ 68,483 Costs of services 57,523 2,361 644 — 60,528 Gross margin 6,372 561 1,022 — 7,955 General and administrative 4,518 640 557 225 5,940 Depreciation, amortization and accretion 556 145 411 96 1,208 (Gain) loss on asset disposals, net — (26 ) 14 — (12 ) Operating income (loss) $ 1,298 $ (198 ) $ 40 $ (321 ) 819 Interest expense, net (1,124 ) Losses on foreign currency (457 ) Other, net 105 Net loss before income tax expense $ (657 ) Total Assets March 31, 2021 $ 71,450 $ 5,840 $ 19,250 $ 5,196 $ 101,736 December 31, 2020 $ 82,458 $ 11,988 $ 19,708 $ 5,832 $ 119,986 |
Organization and Operations (De
Organization and Operations (Details Narrative) | Mar. 31, 2021Number |
Equity interest in water treatment facility | 25.00% |
Environmental Services [Member] | |
Number of water treatment facilities | 9 |
Number of EPA Class II injection wells | 10 |
Number of water treatment facilities wholly-own | 8 |
Number of pipeline gathering facilities | 13 |
Number of pipeline gathering systems developed and owned connected to water treatment facilities | 2 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Accrued payroll | $ 4,006 | $ 1,799 |
Customer deposits and accruals | 1,855 | 2,118 |
Other | 1,088 | 959 |
Total | $ 6,949 | $ 4,876 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill | $ 50,407 | $ 50,389 |
Allowance for doubtful accounts receivable | 500 | 500 |
Accumulated other comprehensive loss | (2,708) | (2,655) |
Inspection Services [Member] | ||
Goodwill | 40,300 | |
Refund liability for revenue associated with variable consideration | 800 | 800 |
Other refund liabilities | 800 | $ 800 |
Environmental Services [Member] | ||
Goodwill | $ 10,100 |
Debt (Details Narrative)
Debt (Details Narrative) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Apr. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) |
Credit facility, Average amount outstanding | $ 60,600 | $ 77,800 | |||||
Long-term debt | 41,829 | $ 62,029 | |||||
Debt issuance costs, net | $ 1,079 | $ 242 | |||||
Borrowings on credit facility | 32,000 | ||||||
Scenario Forecast [Member] | |||||||
Debt covenant total adjusted leverage ratio maximum | 4 | 4.5 | 5.3 | ||||
Base Rate [Member] | Minimum [Member] | |||||||
Spread on variable rate borrowings | 2.00% | ||||||
Base Rate [Member] | Maximum [Member] | |||||||
Spread on variable rate borrowings | 3.75% | ||||||
LIBOR [Member] | Minimum [Member] | |||||||
Spread on variable rate borrowings | 3.00% | ||||||
LIBOR [Member] | Maximum [Member] | |||||||
Spread on variable rate borrowings | 4.75% | ||||||
Credit Agreement [Member] | |||||||
Line of credit facility, maximum borrowing capacity | $ 75,000 | ||||||
Line of credit facility maturity date | May 31, 2022 | ||||||
Debt issuance costs | $ 1,000 | ||||||
Debt instrument, interest rate, effective percentage | 4.36% | ||||||
Debt covenant total adjusted leverage ratio maximum | 6 | ||||||
Debt covenant interest coverage ratio minimum | 3 | ||||||
Leverage ratio | 5.2 | 5.4 | |||||
Interest coverage ratio | 4.4 | 5 | |||||
Finance lease liabilities | $ 500 | $ 600 | |||||
Credit Agreement [Member] | Subsequent Event [Member] | |||||||
Borrowings on credit facility | $ 8,500 | ||||||
Line of Credit [Member] | |||||||
Commitment fee rate, percentage | 0.50% | ||||||
Interest expense including commitment fee | $ 600 | $ 900 | |||||
Line of Credit [Member] | Minimum [Member] | |||||||
Debt instrument, interest rate, effective percentage during period | 3.61% | 3.61% | |||||
Cash on hand amount required to make payments | $ 10,000 | ||||||
Line of Credit [Member] | Maximum [Member] | |||||||
Debt instrument, interest rate, effective percentage during period | 4.37% | 4.80% | |||||
Preferred distribution limitation if leverage ratio is below specified level | $ 1,100 | ||||||
Leverage ratio for preferred distribution limitation | 4 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Threshold for nontaxation | 90.00% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Equity [Abstract] | ||
Net loss attributable to common unitholders | $ (3,686) | $ (1,822) |
Weighted average common units outstanding | 12,243 | 12,096 |
Basic and diluted net loss per common limited partner unit | $ (0.30) | $ (0.15) |
Equity (Details Narrative)
Equity (Details Narrative) $ / shares in Units, $ in Thousands | May 29, 2018USD ($)$ / sharesshares | Mar. 31, 2021USD ($) | May 31, 2020USD ($) | Feb. 29, 2020USD ($) | Apr. 30, 2018USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Nov. 30, 2019shares | Dec. 31, 2020USD ($)Number |
Distributions | $ 1,965 | $ 3,593 | |||||||
Other noncurrent liabilities | $ 339 | $ 339 | $ 182 | ||||||
Cypress Brown Integrity, LLC [Member] | |||||||||
Percentage of income attributable to noncontrolling interests | 49.00% | ||||||||
CF Inspection Management, LLC [Member] | |||||||||
Percentage of income attributable to noncontrolling interests | 51.00% | ||||||||
Long Term Incentive Plan [Member] | |||||||||
Other noncurrent liabilities | 300 | $ 300 | |||||||
Preferred Units [Member] | |||||||||
Annual rate of return of Preferred Units (percent) | 9.50% | ||||||||
Dividend distribution to be paid in kind (percent) | 7.00% | ||||||||
Percentage of income attributable to noncontrolling interests | 9.50% | ||||||||
Common Units [Member] | |||||||||
Aggregate amount of common units authorized to issue under at-the-market program | $ 10,000 | ||||||||
Distributions | $ 2,600 | $ 2,500 | |||||||
Common Units [Member] | Employee Unit Purchase Plan [Member] | |||||||||
Number of units authorized under program | shares | 500,000 | ||||||||
Percentage of annual base pay employees may elect to withhold to purchase common units | 10.00% | ||||||||
Purchase price percentage of common units under program | 95.00% | ||||||||
Preferred Units [Member] | |||||||||
Number of preferred distributions | Number | 4 | ||||||||
Amount of each preferred distribution | $ 1,000 | ||||||||
Private Placement [Member] | Preferred Units [Member] | |||||||||
Number of units issued and sold in a private placement | shares | 5,769,231 | ||||||||
Price per unit (in dollars per unit) | $ / shares | $ 7.54 | ||||||||
Proceeds of units sold in a private placement | $ 43,500 | ||||||||
Private Placement [Member] | Preferred Units [Member] | After Third Anniversary, On or Prior to Fourth Anniversary of Closing Date [Member] | |||||||||
Redemption price as percent of issue price | 105.00% | ||||||||
Private Placement [Member] | Preferred Units [Member] | After Fourth Anniversary of Closing Date [Member] | |||||||||
Redemption price as percent of issue price | 101.00% | ||||||||
CBI [Member] | |||||||||
Distributions | 4,000 | ||||||||
Distribution received | $ 2,000 |
Related-Party Transactions (Det
Related-Party Transactions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Equity in earnings of investee | $ 73 | $ 42 | |
Alati Arnegard LLC [Member] | |||
Ownership interest | 25.00% | ||
Management fee revenue from related parties | $ 200 | 200 | |
Accounts receivable from related parties | 200 | $ 200 | |
Investment in Arnegard | 300 | $ 400 | |
Alati Arnegard LLC [Member] | Maximum [Member] | |||
Equity in earnings of investee | $ 100 | $ 100 |
Related-Party Transactions (D_2
Related-Party Transactions (Details Narrative 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Continental Resources, Inc. [Member] | Environmental Services [Member] | |||
Revenues | $ 200 | ||
CF Inspection Management, LLC [Member] | |||
Ownership interest | 49.00% | ||
CF Inspection Management, LLC [Member] | Inspection Services [Member] | Customer Concentration Risk [Member] | Revenues [Member] | |||
Concentration percentage | 7.70% | 3.80% | |
CF Inspection Management, LLC [Member] | Cynthia A. Field [Member] | |||
Ownership interest | 51.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Master Service Agreement Compliance Audits [Member] | ||
Compliance audit contigencies reserve | $ 300 | $ 300 |
Performance Obligation [Member] | ||
Short-term security deposits | $ 800 | $ 700 |
Reportable Segments (Details)
Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Revenues | $ 26,946 | $ 68,483 | |
Costs of services | 24,050 | 60,528 | |
Gross margin | 2,896 | 7,955 | |
General and administrative | 4,326 | 5,940 | |
Depreciation, amortization and accretion | 1,239 | 1,208 | |
(Gain) loss on asset disposals, net | (37) | (12) | |
Operating income (loss) | (2,632) | 819 | |
Interest expense, net | (802) | (1,124) | |
Gains (losses) on foreign currency | 69 | (457) | |
Other, net | 116 | 105 | |
Net loss before income tax expense | (3,249) | (657) | |
Total assets | 101,736 | $ 119,986 | |
Inspection Services [Member] | |||
Revenues | 25,452 | 63,895 | |
Costs of services | 22,830 | 57,523 | |
Gross margin | 2,622 | 6,372 | |
General and administrative | 3,205 | 4,518 | |
Depreciation, amortization and accretion | 552 | 556 | |
Operating income (loss) | (1,135) | 1,298 | |
Total assets | 71,450 | 82,458 | |
Pipeline & Process Services [Member] | |||
Revenues | 322 | 2,922 | |
Costs of services | 820 | 2,361 | |
Gross margin | (498) | 561 | |
General and administrative | 430 | 640 | |
Depreciation, amortization and accretion | 136 | 145 | |
(Gain) loss on asset disposals, net | (37) | (26) | |
Operating income (loss) | (1,027) | (198) | |
Total assets | 5,840 | 11,988 | |
Environmental Services [Member] | |||
Revenues | 1,172 | 1,666 | |
Costs of services | 400 | 644 | |
Gross margin | 772 | 1,022 | |
General and administrative | 435 | 557 | |
Depreciation, amortization and accretion | 427 | 411 | |
(Gain) loss on asset disposals, net | 14 | ||
Operating income (loss) | (90) | 40 | |
Total assets | 19,250 | 19,708 | |
Other [Member] | |||
General and administrative | 256 | 225 | |
Depreciation, amortization and accretion | 124 | 96 | |
Operating income (loss) | (380) | $ (321) | |
Total assets | $ 5,196 | $ 5,832 |
Reportable Segments (Details Na
Reportable Segments (Details Narrative) | 3 Months Ended |
Mar. 31, 2021Number | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |