Seeking Alpha • Jul 25

Summit Midstream Partners: There Is A Lot Of Value Left To Capture

Summary Summit Midstream Partners (SMLP) continues restructuring the business and balance sheet. Our current wager that Heath Deneke and team will straighten this company out is looking like a decent one. We hope Heath and team change tact when that time comes, but regardless there is a lot of value left to capture. Read the full article on Seeking Alpha

Seeking Alpha • Jul 16

Summit Midstream Partners Shows Its Continued Dedication To Shareholders

Summary Summit Midstream Partners plans to convert to a C-corp with a 1:1 stock conversion, expected to close in the second half of 2024. The company maintains strong assets with an over 85% fixed fee-based gross margin, focusing on natural gas and oil transportation. Despite utilization issues in some segments, SMLP is committed to driving shareholder returns by paying down debt and optimizing cash flow. Read the full article on Seeking Alpha

Seeking Alpha • Apr 09

Summit Midstream Partners: The Market Has Yet To Understand Its Recent Success

Summary Summit Midstream Partners sold Utica and Northeast assets to MPLX for $625 million, reducing debt and improving liquidity. The company's portfolio has become more focused on crude oil and the Double E pipeline, with adjusted EBITDA expected to be $200 million in 2024. The company has $325 million in cash and may use it for distributions or bolt-on acquisitions, while also focusing on paying down debt. Read the full article on Seeking Alpha

Seeking Alpha • Mar 18

Summit Midstream Partners: Potential For Strong Performance, If It Can Survive

Summary Summit Midstream Partners has a market cap consistently below $200 million and is burdened by rising debt. The company had a strong 2023 with adjusted EBITDA of $75 million and is focused on strategic alternatives for long-term survival. Despite concerns about debt and interest rates, the company's financial picture has improved and it expects continued success in its portfolio. Read the full article on Seeking Alpha

Seeking Alpha • Nov 14

Summit Midstream Partners Needs To Account For Rising Rates

Summary Summit Midstream Partners, LP is a small cap midstream producer with a debt load that exceeds its market value. The company has managed to survive thus far, but its ability to thrive in the future is uncertain due to higher interest rates. The next step for Summit Midstream Partners is to determine whether it can overcome its debt burden and continue to grow. Read the full article on Seeking Alpha

Seeking Alpha • Oct 09

Summit Midstream Partners' Recent Earnings Are Just The Start

Summary Summit Midstream Partners, LP's share price is highly impacted by its substantial debt load in relation to its market cap. The company has announced strong volume growth and expects significant earnings and results. The company's assets have substantial capacity for minimal cost, but its utilization remains low and it needs long-term demand for its assets. Read the full article on Seeking Alpha

Seeking Alpha • Sep 29

Summit Midstream Partners Is Risky

Summary Summit Midstream Partners stock has underperformed the market and its sector this year. The company has exhibited mediocre operating performance and is on track to post an annual loss for the fourth year in the last five years. Summit Midstream Partners has an excessive debt load and its interest expense exceeds its operating income. Read the full article on Seeking Alpha

Seeking Alpha • Jun 06

Summit Midstream Partners: Can It Survive Low Utilization?

Summary Summit Midstream Partners continues to struggle with low utilization, even though capital spending is ramping up. However, the company remains profitable. The company has no way to handle paying off its debt due in 2025-2026 and it will need to roll it over. That's dangerous in a high-interest rate environment. The company's management is great and showed a def ability to handle 2020. That, combined with its valuation, makes the company an incredibly valuable investment. Read the full article on Seeking Alpha

Seeking Alpha • Feb 24

Summit Midstream Partners GAAP EPS of -$3.03, revenue of $85.72M, introduces FY23 outlook

Summit Midstream Partners press release (NYSE:SMLP): Q4 GAAP EPS of -$3.03. Revenue of $85.72M (-13.6% Y/Y). Generated adjusted EBITDA of $212.3 million and FCF of $73.5 million in 2022, Provided 2023 adjusted EBITDA guidance of $290 million to $320 million, representing approximately 40% year-over-year expected growth

Seeking Alpha • Jan 11

Summit Midstream Partners Is Playing With Fire

Summary Summit Midstream Partners, LP has made an opportunistic acquisition at an expensive cost. There's no guarantee it pays off. The company has a strong history of paying down debt, which makes us optimistic about the management team's strength and ability to execute. The company needs to focus on aggressively paying down debt and improving its overall balance sheet to drive future returns. We remain cautiously optimistic about Summit Midstream Partners' ability to drive future shareholder returns. Summit Midstream Partners, LP (SMLP) is a $170 million company that has remained incredibly volatile. The company's market capitalization is dwarfed by its debt load, leading to this volatility. As we'll see throughout this article, the company is taking some risks, however, it has the ability to generate substantial long-term rewards. Summit Midstream Partners Bolt-On Purchases Summit Midstream Partners recently made a risky call with some bolt-on purchases. Summit Midstream Partners Investor Presentation The company recently made the acquisitions of Sterling DJ and Outrigger DJ for $305 million total. That's almost double the company's market capitalization for perspective. The two assets have 10-11 year weighted average terms, with low-cost assets and near-term connectivity, and the expected cash flow should be significant. The company also has $85 million in senior secured second lien notes due 2026, along with $115 million in cash raised from prior divestments. The company expects YE 2023 leverage at ~4.25x, normally a respectable number, although the company does need to pay down debt substantially. The company expects projected EBITDA of $75 million in 2023E. Summit Midstream Partners Investor Presentation The company expects $75 million in EBITDA for 2023 with primarily fixed-fee contracts across a number of leading customers. The company's capital expenditures are $12.5 million, which are incredibly minimal and include roughly $7.5 million in growth capital which will help support future growth and earnings. The company is expecting the assets to rapidly ramp up well connections. 2023E well connections are expected to hit 75, or roughly 50% growth from 2021. It's worth noting that the company is susceptible to market crashes shown from the weakness several years ago. The company also expects volumes to continue ramping up, hitting new highs. That volume growth should help cash flow to continue growing. The acquisition is risky, but it has the potential for substantial returns. Summit Midstream Partners Overview Summit Midstream Partners continues to have a strong and distributed asset portfolio. Summit Midstream Partners Investor Presentation The company has diversified and distributed assets with a number of major key customers. The company's average contract life ranges from 6 years to more than a decade with volume throughput remaining strong. The company's EBITDA continues to remain incredibly strong and capex remains minimal, which we expect to continue. Summit Midstream Partners Investor Presentation The story with Summit Midstream Partners is underutilization of its assets and the company's ability to solve that. The company's utilization is currently 41%, and across some of the company's highest spare capacity segments, such as the Northeast, the company has minimal incremental cost to bring additional wells online. The company relies on continued market growth here, which requires demand and prices to remain higher for longer. Here natural gas is a more promising field than crude oil. Demand can be expected to remain stronger for longer, it's especially supported by growing LNG demand. Still this is something investors will need to pay close attention to see long-term returns. Summit Midstream Partners Forecast The company's forecast is focused on continued de-levering of its balance sheet. Summit Midstream Partners Investor Presentation The company has $1.034 billion in debt net of cash. It's worth noting that this will expand past $1.3 billion from the company's acquisitions, which have yet to close. This is partially with cash but also partially with new debt that the company is issuing. It's worth noting that the majority of cash for this acquisition is coming from the company's revolving credit facility. The company's interest payments are an issue. The company's pro forma annual interest obligations will be more than $100 million annualized. That's half the company's market capitalization and a substantial part of its $300 million EBITDA. It affects the company's ability to provide free cash flow ("FCF") substantially, which affects future returns. Summit Midstream Partners Investor Presentation The company expects $125+ million in 2023 free cash flow that's slightly gas oriented. The company's $75 million in new EBITDA will have around 1/3 of that EBITDA go towards interest for the acquisition. But the potential is there. The company's FCF on its market capitalization is 65%, but the FCF on its enterprise value is single digits. The company's target is a 3.5x leverage ratio in 2024, which implies $200+ million in debt paydown plus potential EBITDA expansion. The company expects it can move $100 million of debt to Double E as well, and potentially hand that out as a dividend to itself. Overall, the company's projects are solid but fraught with risk. Our View The company is in a risky position. Its future is based on the ability to pay down debt. At the same time, Summit Midstream Partners, LP already has a substantial asset portfolio, which means that increasing utilization is cheap, but the company can't really afford to lose utilization. The company has $125 million in annualized FCF that we expect to continue remaining strong or growing.

Seeking Alpha • Dec 27

Summit Midstream Partners: Lofty Goals For 2023

Summary Summit Midstream Partners is struggling with debt, as it has for years now. They recently undertook a sizable acquisition they hope will expedite deleveraging, but at the time, I remained skeptical. They have since updated their guidance for 2023, which sets lofty goals regarding their free cash flow that is far more than was expected. Apart from helping deleverage, this would see their units trading with a seldom-ever-seen free cash flow yield of circa 75% on current cost. Only time will tell how they perform and thus in the meantime, I am upgrading from a sell rating to a hold rating whilst awaiting their future results. Introduction When last discussing the struggling Summit Midstream Partners (SMLP), they were trying to spend their way out of overleverage but as my previous article warned, I was skeptical their DJ basin acquisition would achieve this goal. Fast forward to the closing days of 2022 and they have subsequently released further guidance for the year ahead, which sets lofty goals for 2023 for their free cash flow that is far more than was expected when conducting my previous. Coverage Summary & Ratings Since many readers are likely short on time, the table below provides a brief summary and ratings for the primary criteria assessed. If interested, this Google Document provides information regarding my rating system and importantly, links to my library of equivalent analyses that share a comparable approach to enhance cross-investment comparability. Author Detailed Analysis Author The first half of 2022 was marred by weak cash flow performance and seeing as this was heavily influenced by higher interest expenses, expectations for the third quarter were not high. Alas, this proved apt with their operating cash flow now landing at $96.8m during the first nine months, which similar to earlier in the year, sits around 24% lower year-on-year versus their previous result of $127.7m during the first nine months of 2021. If nothing else, one small saving grace was their very low capital expenditure of only $6.2m during the third quarter of 2022, which nevertheless helped maximize their free cash flow from an otherwise lackluster starting point. This ultimately saw their free cash flow increase to $65.8m during the first nine months, up from $36.9m during the first half and thus making the best out of a bad situation. Author If viewed on a quarterly basis, their operating cash flow of $36.6m during the third quarter of 2022 was far better than their previous result of $14.1m during the second quarter, although this was mostly due to working capital movements. If these are excluded, their underlying results change to $31.7m and $27.5m respectively for these same two periods of time and whilst this still leaves the third quarter showing an improvement, it remains below their other previous result of $33.6m during the first quarter. At the end of the day when everything is said and done, it was not a terrible quarter but at the same time, it will not be remembered well into the future, thereby leaving their updated guidance for 2023 more interesting and obviously, far more important. When conducting the previous analysis, their guidance for 2023 was already mentioned, despite not being the primary focus at the time and subsequently, they have now released more details. If the first element of their guidance comes to fruition, it sees their adjusted EBITDA climbing to $300m+ during 2023, which would be a significantly circa 40% higher year-on-year versus their forecast of $217.5m at the midpoint for 2022. Even though this remains unchanged compared to the previous analysis, very interestingly, they have now included further guidance for accompanying free cash flow of $125m+. Summit Midstream Partners December 2022 Wells Fargo Presentation If this free cash flow guidance for 2023 comes to fruition, it produces an insane, seldom-ever-seen free cash flow yield of circa 75% against their current market capitalization of approximately $165m and if achieved, their unit price is almost certain to rally much higher as the year progresses. Whilst this represents a massive improvement and far more than was expected when conducting my previous analysis, more years of deleveraging would still be ahead. Firstly, their unpaid preferred distributions are still accruing with a balance now north of $100m and as discussed within my earlier article, these must be made whole before returning cash to common unitholders. Secondarily, their financial position is burdened with excessive overleverage and thus as subsequently discussed, this short-term boost to their financial performance cannot sufficiently restore complete financial health. Author Despite their operating cash flow being anything but astounding during the third quarter of 2022, their net debt still decreased modestly to $1.164b versus its previous level of $1.228b following the second quarter. This primarily arose due to their very low capital expenditure that maximized free cash flow as well as the $36.7m of proceeds from their Bison gas gathering system divestiture, as expected when conducting the previous analysis. This is noticeably below where it ended 2021 at $1.348b, although the $305m cost of their DJ Basin acquisition during the soon-to-end fourth quarter of 2022 will instead ensure they end the year with net debt of more than $1.4b, depending upon their concurrent free cash flow. As for 2023, they should shave away around 9% of their net debt if their free cash flow guidance comes to fruition, barring any further acquisitions or divestitures. Even though this would help, the far bigger impact to their leverage would come from the accompanying stronger financial performance, once again, assuming their guidance pans out as expected. Author Thanks to their lower net debt, their leverage continues to decrease with their net debt-to-EBITDA now at 6.28 and net debt-to-operating cash flow came along at 9.40 following the third quarter of 2022. Whilst these mark improvements against their previous respective results of 6.93 and 10.04 following the second quarter, they nevertheless remain far above the threshold of 5.01 for the very high territory. Even though their guidance for significantly higher adjusted EBITDA stands to see this improve during 2023, there is still an important caveat to consider, even if their forecast comes to fruition. When looking at their net debt-to-EBITDA and net debt-to-operating cash flow, there is an uncommonly large gap between their results with the latter far higher than the former, mostly because operating cash flow includes interest expense, unlike EBITDA. In my eyes, this makes comparing net debt against operating cash flow a superior measurement, especially when also considering the lack of accounting complexities with cash-based accounting instead of accrual-based accounting. Since the pressure they face on this front is not likely to ease in the foreseeable future, their net debt-to-operating cash flow will remain far higher than their accompanying net debt-to-EBITDA during 2023. To this point, even if their operating cash flow scales 40% higher in tandem with their adjusted EBITDA guidance, their net debt-to-operating cash flow would only decrease to 6.72 at their current net debt, thereby remaining well into the very high territory. Since their net debt is about to jump around $300m higher following their acquisition that is actually driving most of this higher forecast financial performance, their future result would obviously sit even higher, likely over 7.00. This means that regardless if they see a short-term boost in 2023 from their DJ basin acquisition, there are still more years ahead deleveraging to restore complete financial health. Author Following the analysis thus far, it should be no surprise to see their debt serviceability under immense pressure. Even after seeing a small improvement during the third quarter of 2022, their interest coverage is only 0.67 when compared against their EBIT and thus only slightly above their previous result of 0.57 following the second quarter. Meanwhile, their interest coverage when compared against their operating cash flow only sees a result of 1.31, which despite being higher is nevertheless still dangerous. Whilst their interest coverage should improve during 2023 if their guidance comes to fruition, even their significantly higher 40% improvement would only lift their results to 0.94 and 1.83 when compared against EBIT and operating cash flow, respectively. Since both would still be dangerous, it means that similar to their leverage, this further confirms they have more years of work ahead to restore complete financial health. Due to most of their debt carrying fixed interest rates, even if the Federal Reserve were to begin easing monetary policy in late 2023 or 2024, it would not significantly help this problem that is only solved via reducing net debt across time. Author Despite other parts of their financial position improving during the third quarter of 2022, their liquidity did not follow in tandem with their respective current and cash ratios decreasing modestly to 0.79 and 0.11 versus their previous respective results of 0.91 and 0.14 following the second quarter. Even though not ideal, this was simply due to the usual fluctuations within their current assets and liabilities and thus, thankfully their liquidity remains adequate and due to their free cash flow, they are not necessarily reliant upon their credit facility.

Seeking Alpha • Oct 18

Summit Midstream Partners: Trying To Spend Their Way Out Of Overleverage

Summary Summit Midstream Partners has been struggling with an overleveraged financial position for years. Their cash flow performance was weak during the first quarter of 2022 and this continued during the second quarter. Surprisingly, they have just announced a $305m acquisition that management hopes will help. When reviewing their accompanying guidance, I am skeptical it will significantly help expedite deleveraging given the cost of the additional debt they will have to issue. When combined with the increasingly concerning economic outlook on the horizon, I continue to believe that my sell rating is appropriate.

Seeking Alpha • Aug 11

Summit Midstream: Arguably A $25+ Stock, Yet Trading In The Low $16s

On August 4th, Summit Midstream told the street that its FY 2022 Adj. EBITDA should come in at the high end of its range, closer to $220 million. Management also said, based on what they know now, and FY 2023 budgets aren't finalized until February 2023, Summit could grow its FY 2023 Adj. EBITDA by at least 10%. I share my somewhat granular pro-forma model which shows that $250 million of FY 2023 Adj. EBITDA is achievable. The last time I wrote on Summit Midstream Partners, LP (SMLP), was back on March 8, 2022, by writing - A Granular Look At Its (Super) Conservative FY 2022 Guidance. Lo and behold, on August 4, 2022, Summit reported its Q2 FY 2022 numbers and updated its full year guidance. As of August 4th, Summit now expects its FY 2022 Adj. EBITDA to be at the high-end of its guidance range, or closer to $220 million. Based on year-to-date financial results and the timing and performance of recent well connections in 2022, we believe we will trend toward the high end of our previously announced Adjusted EBITDA guidance range of $205 to $220 million. We continue to see strong momentum behind our systems throughout the second half of 2022 and into 2023 which we believe positions SMLP for strong growth in 2023. (Updated Management Guidance - August 4, 2022) For perspective, back on February 25, 2022, Summit's management said the following about FY 2022 guidance. Providing 2022 adjusted EBITDA guidance of $195 million to $220 million based on 75 to 110 new well connections and total capital expenditure guidance of $20 million to $35 million, excluding $10 million of Double E capex. (Initial FY 2022 Management Guidance - February 25, 2022) This conservative guidance really caught Mr. Market off guard and SMLP units crashed on February 25, 2022, closing down 30.6%. With very limited sell side coverage or sponsorship combined with a large and diffuse retail ownership, sentiment got super negative and SMLP units drifted under $14 (on March 16, 2022). In other words, many people just 'gave up' and capitulated. On May 3, 2022, SMLP reported a solid Q1 FY 2022 quarter, and was very upbeat on its conference call. SMLP units rebounded smartly, briefly trading north of $21 (on May 4 - May 6th). Incidentally, on May 31, 2022, RBC downgraded SMLP. I got a copy of the RBC report and was really surprised to learn they were modeling both FY 2022 and FY 2023 Adj. EBITDA at only $205 million. As we know now, SMLP's management is telling the market they think FY 2022 Adj. EBITDA will be closer to $220 million. Moreover, given their active and upbeat discussions with producers behind its systems, management said the following about FY 2023. While it's still too early to formally provide 2023 guidance, we believe this level of well connection activity and continued contracted EBITDA growth behind our Double E joint venture to generate at least 10% year-over-year Adjusted EBITDA growth in 2023. In addition, to support that initial FY 2023 Adj. EBITDA discussion, management is suggesting at least 200 wells could be connected behind its systems in 2023. This would be about an 80% increase to both FY 2021 and FY 2022. Based on recent customer development plans, permitting and rig activity, and commodity price expectations of over $80 per barrel of crude oil and over $5 per MMBtu of natural gas in 2023, we currently expect to connect at least 200 wells to our systems in 2023. While this remains below pre-pandemic average well connections of approximately 260 wells per year, this would be a 80% increase from the average wells connected to the system in 2021 and 2022. Now that we have housekeeping matters out of the way, in today's piece, I write to share my pro-forma model and explain why SMLP's FY 2023 Adj. EBITDA growth also looks conservative. I won't go as far as to say 'super' conservative, like I did back on March 8, 2022. Again, though, I do think there is upside to 10% Adj. EBITDA growth in FY 2023. My Pro-forma SMLP Back of the Envelope Model Based on the updated information we have from August 4, 2022, as well as Summit's August 5th conference call, I created this following pro-forma model. Generally speaking, I am fairly good at synthesizing and I usually don't spend a ton of time building out models. However, I made an exception here and built a simple model on Summit to show its FY 2023 initial Adj. EBITDA commentary is very achievable. I am making volume x G&T (gathering and transport) calculations to get to revenue and then making Adj. EBITDA capture rate assumptions. All of my assumptions are based on synthesizing based 10-Ks and 10-Qs combined with management's public commentary on 2nd half 2022 drilling activity. Courage and Conviction's Model Next, in 2023, I am assuming flat production/EBITDA in the DJ and Marcellus and the Piceance basins as new wells will be incremental and should enough to hold production flat. To drive FY 2023 Adj. EBITDA, the upside resides in four basins. Enclosed below you can see my assumptions on numbers of wells, IP rates, G&T rates, and incremental Adj. EBITDA. Also, given the timing of drilling, I am only assuming 50% of the uplift, as not all of the wells will come online in January 2023. 2023 production will occur throughout the year. Based on these assumptions, and I don't think they are aggressive, by any stretch, as you can see, there is a very realistic pathway to $250 million in FY 2023 Adj. EBITDA. Moreover, given Ascent's purchase of Exxon's Utica acreage, combined with how good Ascent is as a shale producer, there could be upside in the Utica (SMU) system as there is 720 Mcf/d of capacity (I am only assuming 2022 exit rate production at 475 Mcf/d). Also, there could be upside on its Ohio system too (given the strong IP rates and outlook for natural gas). Courage and Conviction's Model The Balance Sheet In terms of the debt, as of June 30, 2022, Summit's debt is as follows: $151 million ABL, $700 million on the 8.5% Second Lien Notes, and $259 million 5.75% 2026 notes. There is also about $113 million of preferred stock that is in PIK status. As of now, the Double E pipeline is off balance sheet as the cash flow from the asset is earmarked to pay down and service the $158 million Permian Term Loan that is Libor +2.375% and there is about a $105 million Preferred on the Double E. Summit Midstream's FY 2022 Q2 10-Q As an aside, in its current state, the Double E is a 1.3 Bcf/d pipeline that should generate $45 million of annual Adj. EBITDA, once fully subscribed. As of November 2023, there will be 1 Bcf /d of take or pay contracts. In case you don't know, these are ten-year take or pay contracts and Exxon Mobil is the anchor sponsor, with 750 Mcf/d. Given the number of rigs running in near the Double E and the strong demand pull out of Waha to the Texas coast, driven by strong LNG and Mexican gas imports, I would argue that the Double E should trade at 10X to 12X. Also, with perhaps about $50 million or $60 million of incremental investment, Summit's management has suggested that pipeline could expand to upwards of 2 Bcf/d, which could result in approximately $60 million of annual Adj. EBITDA. Now again, this is a few years out, as Summit needs to secure the 10 year take or pay commitments on the remaining 0.3 Bcf/d as well as secure commitments on the would be incremental 0.7 Bcf/d before any final expansion plans are made. That said, net of the debt, in its current state, you could argue that equity value of Double E today, is close to $200 million, to Summit, and net of its current debt, at the operating company level. Pro-forma Balance Sheet Leverage So, let's say, during the 2nd half of 2022, Summit generates another $35 million of free cash flow that will be used to pay down debt.

Seeking Alpha • Jul 06

Summit Midstream Partners: Common Unitholders Getting Squeezed Out

Sadly for the common unitholders of Summit Midstream Partners, they are being squeezed out of their earnings and assets by the preferred unitholders and debt holders. They recently diluted their common unitholders by 40% to merely redeem only part of their preferred units, thereby effectively seeing common unitholders giving away almost half of their assets. If looking ahead, the dilution would be too high to redeem the rest of their preferred units this way and as a result, their suspended preferred distributions continue accruing. These compound and thus grow more burdensome, which effectively means that common unitholders are also getting squeezed out of their future earnings. Their lack of deleveraging is disappointing and makes a recovery look increasingly unlikely, which means that I believe downgrading to a sell rating is now appropriate. Introduction When last discussing the overleveraged and struggling Summit Midstream Partners (SMLP), they were oddly talking about undertaking mergers and acquisitions despite their preferred distributions being suspended, which seemed to be jumping the gun and as a result, did not bode well for their critical deleveraging, as my previous article warned. Since one year has now elapsed, it seems timely to provide a refreshed analysis, which sadly sees their common unitholders getting squeezed out of their earnings and assets by the preferred unitholders and debt holders. Executive Summary & Ratings Since many readers are likely short on time, the table below provides a very brief executive summary and ratings for the primary criteria that were assessed. This Google Document provides a list of all my equivalent ratings as well as more information regarding my rating system. The following section provides a detailed analysis for those readers who are wishing to dig deeper into their situation. Author *Instead of simply assessing distribution coverage through distributable cash flow, I prefer to utilize free cash flow since it provides the toughest criteria and also best captures the true impact upon their financial position. Detailed Analysis Author After struggling through 2021 with their operating cash flow of $165.1m down significantly versus its result of $198.6m during 2020, the first quarter of 2022 offered no improvements. In fact, their operating cash flow of $46m was down another 10.47% year-on-year versus their previous result of $51.4m during the first quarter of 2021. Although already disappointing, if removing the temporary impacts of working capital movements, their underlying operating cash flow was only $33.6m during the first quarter of 2022 and thus down a very significant 30.76% year-on-year versus their previous equivalent result of $48.5m during the first quarter of 2021. When looking elsewhere at their accrual-based results, they also share this disappointing performance, as the table included below displays. Summit Midstream Partners First Quarter Of 2022 Results Announcement It can be seen that their adjusted EBITDA of $56.8m for the first quarter of 2022 was down 6.12% year-on-year versus its previous result of $60.4m during the first quarter of 2021. Meanwhile, their cash flow available for distributions, which is also commonly known as distributable cash flow was down a very significant 31.22% year-on-year to $31.8m versus its previous result of $46.2m during these same two periods of time. Unsurprisingly, this is very similar to the decline that their underlying operating cash flow endured and when examining the reconciliation included above, the single biggest contributor was the additional burden of their interest expense following their subsequently discussed debt refinancing during 2021. The first quarter of 2021 saw interest paid and incurred of $12.9m and $0.5m respectively, thereby making for a total of $13.4m, whereas the first quarter of 2022 saw these two at $3.5m and $18.6m respectively, which sees a new total of $22.1m. This now sees an additional cost of $8.7m per quarter and essentially means that their common unitholders are being squeezed out of their earnings by the debt holders. Meanwhile, their guidance for the remainder of 2022 is not looking any better despite promising the highest free cash flow in history, as the table included below displays. Summit Midstream Partners May 2022 Investor Presentation On the surface, at least $75m of free cash flow for 2022 may sound positive, especially since their highest result during 2019-2021 was only $16.2m but when digging deeper, sadly this is not the case because it merely stems from lower capital expenditure. If aggregating the $27.5m midpoint of their capital expenditure guidance for 2022 with their forecast $10m guidance for their Double E equity investment, which is practically capital expenditure, it sees a total of $37.5m, which is down massively versus its previous level of $173.7m during 2021. Given their accompanying guidance for free cash flow of $75m, it implies operating cash flow of $112.5m for 2022 and thus once again down even further versus their already weak result of $165.1m during 2021. Since this equates to merely $28.2m per quarter, it means that their weak underlying cash flow performance during the first quarter of 2022 is effectively guided to continue throughout the remainder of the year. Whilst their guidance notes to expect over $75m of free cash flow, anything in excess of this estimation should only be relatively minor because if their results were going to be $20m+ higher, obviously management would have quantified this higher guidance to help support their suppressed unit price. Even though being squeezed out of their earnings is already bad enough, their common unitholders are also being squeezed out of their assets by the preferred unitholders. They redeemed Series A preferred units by issuing common units during 2021, which amounted to 538,715 units and thus represented a dilution of circa 9% against their outstanding common unit count of 6,110,092 at the start of 2021. Despite already being painful, it was nothing compared to the first quarter of 2022, as they issued 2,853,875 new common units to redeem more Series A preferred units, as the table included below displays. Summit Midstream Partners Q1 2022 10-Q It can be seen that after starting 2021 with 7,169,834 they subsequently issued 2,853,875 new common units to redeem 77,939 of their Series A preferred units, which represents a circa 40% dilution or phrased another way, common unitholders gave up 40% of their assets to the preferred unitholders. To make this even more painful, it did not even solve their preferred equity problem, as they still have a further 65,508 Series A preferred units remaining. Since these carry a par value of $1,000 per unit, it would require issuing another $65.5m of common units to redeem these the same way, plus a further $15.5m to make their unpaid distributions that have been accruing since being suspended. Even if their preferred unitholders did not seek any discount, this total of $81m would amount to a massive dilution of circa 60% on their current market capitalization of approximately $132m. This level of dilution makes this path seem unlikely and every quarter their Series A preferred units are left unaddressed, they grow more burdensome. Their distribution rate of 9.50% sees annual commitments of $6.3m per annum that accrue and compound at 9.50% whilst suspended, thereby creating a rapidly growing cash burn that further sees their common unitholders squeezed out of more and more of their future earnings if their preferred distributions are reinstated. Even if their common unitholders endured another massive 60% dilution to redeem these preferred units, it would still not address their subsidiary Series A preferred units that despite the annoyingly similar name, sit on their balance sheet in addition to these ‘normal’ Series A preferred units discussed thus far. Quite unsurprisingly, these subsidiary Series A preferred units also see their distributions suspended and similarly, they are progressively seeing their common unitholders squeezed out of their future earnings. These carry a distribution rate of 7.00% with their unpaid distributions giving rise to paid-in-kind units, which are effectively new preferred units added onto their existing balance and compound as they incur more distributions. When the first quarter of 2022 ended, they had 93,039 of these subsidiary Series A preferred units that also carry a par value of $1,000 per unit, which means a minimum cost of $93m to redeem and even ignoring their previous preferred units, would incur a massive dilution of circa 70% to redeem via new common units. Whilst common unitholders are likely hoping that all of their preferred units can see their distributions reinstated soon, thereby putting an end to this compounding and working towards redeeming them via internally generated cash inflows, this does not look promising. They are suspended due to their overleverage and thus will require material deleveraging before being reinstated, which sadly, they have not been making sufficient progress towards. Author Considering their goal is deleveraging as quickly as possible, it seems very lackluster to see their capital structure effectively unchanged with their net debt of $1.313b barely decreasing versus its previous level of $1.332b as far back as the end of 2020. Meanwhile, they have recently announced a $75m divestiture of their Delaware basin assets, although even if this were to hypothetically cause no loss of earnings, this would still barely help their leverage given that it only amounts to a tiny 5.71% of their net debt. This also bodes relatively poorly for their free cash flow guidance for 2022, which also at circa $75m and thus barely moves the needle against their formidable leverage. Author When turning to their leverage, unsurprisingly, it also followed the same path as their net debt to merely trend sideways with their net debt-to-EBITDA of 6.89 practically unchanged since their previous results of 7.00 and 6.81 at the end of 2021 and 2020 respectively. Unsurprisingly, these are clearly well above the threshold of 5.01 for the very high territory and even if they were to reduce their net debt by circa 10% on the back of their divestiture and free cash flow, they would obviously remain within the very high territory and thus sees little relief in sight. Meanwhile, their net debt-to-operating cash flow continues fluctuating with their cash flow performance, most recently climbing to a seldom-seen level of 9.78 on the back of their previously discussed weak underlying operating cash flow, which bodes very poorly for their ability to deleverage.

Seeking Alpha • May 06

Summit Midstream Partners: Keep Trusting Management

Summit Midstream Partners' management has averted the short-term risks; however, the work is still cut out for them. The company's stock price has regressed which in our view represents a unique opportunity to invest. The company's future performance is based on continued growth in a high price environment and debt pay-down. This definitely isn't a risk free investment but the current market favors investing.

Seeking Alpha • Mar 31

Whoops! The Market Forgot About Summit Midstream Partners

Summit Midstream Partners has seen its stock price languish back down despite solving its 2022 debt obligations. The company, in our view, should stay away from using preferred equity for capital. The company should focus on aggressively paying down its debt, which will support additional shareholder rewards. The company has the ability to generate substantial market beating returns, but it's going to be an arduous process for investors.

Seeking Alpha • Mar 18

Legacy Ridge Capital - Summit Midstream Partners: Lots Of Potential Upside

SMLP was one of my bigger mistakes (lazy analysis and bad timing perpetuated by inertia) and has been a meaningful detractor to multi-year partnership performance, even despite the stock being up 78% last year. Double E is a joint-venture between SMLP (70%) and Exxon (30%) that owns a 135-mile natural gas pipeline put in service at the end of 2021. We’ve re-analyzed this one what seems like hundreds of times and re-weighed the risk/reward, the results of which keep it in the portfolio as a smaller position, but one with lots of potential upside.

Seeking Alpha • Mar 08

Summit Midstream: A Granular Look At Its (Super) Conservative FY 2022 Guidance

This is a detailed look at why I would argue Summit's FY 2022 Adj. EBITDA guidance is conservative. I graphed historical volume and Adj. EBITDA data for each basin as well as synthesized SMLP's Q4 FY 2021 conference call commentary surrounding new wells. With today's ban of Russian oil and gas, President Biden is flying to Texas to discuss oil and gas production with E&P executives in Houston.

Seeking Alpha • Dec 21

Summit Midstream Partners Deserves More From The Market

Summit Midstream Partners has removed the bankruptcy risk it faces, however, the market still has not responded. The company continues to have an impressive asset portfolio generating strong DCF with strong incremental capacity. With the company's Double E pipeline online, it'll be able to focus on FCF and paying down its debt. The discrepancy between debt and market cap with the DCF means the ability to substantially increase shareholder returns just by paying down debt. Debt paydowns and lower interest payments will also support dramatic future DCF increases.

Seeking Alpha • Nov 05

Summit Midstream Partners' Debt Offering Points Towards Survival

Summit Midstream Partners is focused on a new set of debt offerings that should enable the company to rollover its soon-to-be-due debt. We expect the company to survive bankruptcy threats and use its strong cash flow to drive shareholder rewards. Summit Midstream Partners is lowering its costs and growing its asset portfolio through new assets such as the Double E Pipeline the company is building.

Seeking Alpha • Oct 21

Summit Midstream: With The Refinancing Completed, This Is A Good Way To Play Natural Gas

Summit Midstream successfully refinancing just shy of $1 billion of 2022 debt. This would have thought to have been unthinkable a mere 12 months ago. Although the terms weren't perfect, refinancing that much debt within the "CCC" and "B" communities is like entering a pit of vipers, so management did get the deal done. In Q2 2021, only 39% of Summit Midstream's systems were utilized. With the best natural gas prices since 2014, this means there is ample excess capacity to flow more gas. With 5 rigs running in Summit's 7 basins, producers sitting only legacy acreage, well outside of the money (sub $3MMBtu gas), have a strong incentive to drill and this is good for Summit's EBITDA in FY 2022.

Seeking Alpha • Sep 03

Summit Midstream Partners Is Well On The Road To Recovery

Summit Midstream Partners has an impressive portfolio of assets it's continuing to develop such as the Double E pipeline. It's hit the limit of the debt it can paydown with its DCF, it's time to refinance 2022 debt. This is a big month for the company. The company has a path to massive returns if it refinances the debt, which we see as likely, but that remains to be seen.

Seeking Alpha • Jul 05

Summit Midstream Partners: A Wager On The Credit Markets' Appetite For Risk

Summit Midstream Partners, LP is trying to roll over debt in the amount of 4.34x 2021 EBITDA, with most of that debt due in March 2022. If Summit rolls over its 2022 maturities at rates analogous to recent debt issuances by other oil and gas companies, there could be significant upside. Summit's strong cash flow and 2021 Q4 capacity expansion, combined with the credit markets' appetite for risk, make some form of refinancing likely. The upside from current prices is significant enough that even an imperfect financing with some dilution and/or higher interest costs could still result in an excellent return. With an attractive risk/reward ratio, I'm taking a position that's small enough that I won't be upset if the company goes bust, but I won't regret not having bought more if it succeeds.

Seeking Alpha • Jun 21

Summit Midstream Partners raises full-year adjusted EBITDA forecast

onurdongel/E+ via Getty Images Summit Midstream Partners (SMLP) raises guidance for full-year adjusted EBITDA to $225M-$240M from its previous forecast of $210M-$230M, driven by YTD outperformance from wells turned in line, accelerated customer activity and improved cost management. Summit also expects its revolving credit facility balance to total $760M at June 30, and $82M reduction since year-end 2020. Summit maintains FY 2021 capital spending guidance of $20M-$35M. "While we still expect 2021 to be a trough year for new well connect

Puntuación del snowflake
Valoración	2/6
Crecimiento futuro	0/6
Rendimiento pasado	3/6
Salud financiera	1/6
Dividendos	0/6

Precios históricos de las acciones
Precio actual de la acción	US$38.05
Máximo en las últimas 52 semanas	US$38.05
Mínimo de 52 semanas	US$13.00
Beta	2.45
Cambio en 1 mes	9.53%
Variación en 3 meses	11.85%
Cambio de 1 año	152.82%
Variación en 3 años	1.39%
Variación en 5 años	-54.86%
Variación desde la OPV	-87.98%

	SMLP	US Oil and Gas	Mercado US
7D	3.0%	-5.6%	1.5%
1Y	152.8%	30.2%	28.6%

SMLP volatility
SMLP Average Weekly Movement	7.6%
Oil and Gas Industry Average Movement	6.4%
Market Average Movement	7.2%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.0%

Estadísticas fundamentales de SMLP
Capitalización bursátil	US$405.18m
Beneficios(TTM)	US$81.39m
Ingresos (TTM)	US$466.21m

Cuenta de resultados (TTM) de SMLP
Ingresos	US$466.21m
Coste de los ingresos	US$213.54m
Beneficio bruto	US$252.67m
Otros gastos	US$171.28m
Beneficios	US$81.39m

Beneficios por acción (BPA)	7.64
Margen bruto	54.20%
Margen de beneficio neto	17.46%
Ratio deuda/patrimonio	118.6%

Datos	Última actualización (huso horario UTC)
Análisis de la empresa	2024/08/02 20:10
Precio de las acciones al final del día	2024/07/31 00:00
Beneficios	2024/03/31
Ingresos anuales	2023/12/31

Paquete	Datos	Marco temporal	Ejemplo Fuente EE.UU. ^*
Finanzas de la empresa	10 años	Cuenta de resultados Estado de tesorería Balance	Formulario SEC 10-K Formulario SEC 10-Q
Estimaciones del consenso de analistas	+3 años	Previsiones financieras Objetivos de precios de los analistas	Informes de análisis Blue Matrix
Precios de mercado	30 años	Precios de las acciones Dividendos, escisiones y acciones	Datos de mercado ICE Formulario S-1 de la SEC
Propiedad	10 años	Accionistas principales Información privilegiada	Formulario SEC 4 Formulario SEC 13D
Gestión	10 años	Equipo directivo Consejo de Administración	Formulario SEC 10-K Formulario SEC DEF 14A
Principales avances	10 años	Anuncios de empresas	Formulario SEC 8-K

Analista	Institución
Ethan Bellamy	Baird
Heejung Ryoo	Barclays
Gabriel Moreen	BofA Global Research

This company listing is no longer active

Summit Midstream (SMLP) Resumen de Acciones

Recompensas

Análisis de riesgos

Competidores de Summit Midstream Corporation

Green Plains Partners

StealthGas

CrossAmerica Partners

Dynagas LNG Partners

Historial de precios y rendimiento

Noticias y actualizaciones recientes

Summit Midstream Corporation Requests NYSE to File Form 25 with SEC to Delist Equity

Summit Midstream Partners: There Is A Lot Of Value Left To Capture

Summit Midstream Partners Shows Its Continued Dedication To Shareholders

Board Member recently sold US$340k worth of stock

New minor risk - Shareholder dilution

Investor sentiment improves as stock rises 24%

Recent updates

Summit Midstream Corporation Requests NYSE to File Form 25 with SEC to Delist Equity

Summit Midstream Partners: There Is A Lot Of Value Left To Capture

Summit Midstream Partners Shows Its Continued Dedication To Shareholders

Board Member recently sold US$340k worth of stock

New minor risk - Shareholder dilution

Investor sentiment improves as stock rises 24%

First quarter 2024 earnings released: EPS: US$12.72 (vs US$1.82 loss in 1Q 2023)

Summit Midstream Partners, LP Reports Long-Lived Asset Impairments for the First Quarter Ended March 31, 2024

Summit Midstream Partners, LP to Report Q1, 2024 Results on May 03, 2024

Summit Midstream Partners, LP, Annual General Meeting, May 09, 2024

Summit Midstream Partners: The Market Has Yet To Understand Its Recent Success

New minor risk - Share price stability

President exercised options and sold US$1.1m worth of stock

Summit Midstream Partners: Potential For Strong Performance, If It Can Survive

New minor risk - Shareholder dilution

Full year 2023 earnings released: US$3.77 loss per share (vs US$12.71 loss in FY 2022)

Summit Midstream Partners, LP Reports Long-Lived Asset Impairment for the Three Month Ended December 31, 2023

Summit Midstream Partners, LP to Report Q4, 2023 Results on Mar 15, 2024

Summit Midstream Partners Needs To Account For Rising Rates

Third quarter 2023 earnings released: EPS: US$0.37 (vs US$1.28 loss in 3Q 2022)

Summit Midstream Partners' Recent Earnings Are Just The Start

New minor risk - Share price stability

Summit Midstream Partners Is Risky

New major risk - Revenue and earnings growth

New minor risk - Shareholder dilution

Second quarter 2023 earnings: Revenues exceed analysts expectations while EPS lags behind

Summit Midstream Partners, LP to Report Q2, 2023 Results on Aug 09, 2023

Insufficient new directors

Summit Midstream Partners: Can It Survive Low Utilization?

First quarter 2023 earnings: Revenues exceed analysts expectations while EPS lags behind

President exercised options and sold US$826k worth of stock

Full year 2022 earnings: Revenues exceed analysts expectations while EPS lags behind

Summit Midstream Partners GAAP EPS of -$3.03, revenue of $85.72M, introduces FY23 outlook

Summit Midstream Partners, LP to Report Q4, 2022 Results on Feb 24, 2023

Price target increased to US$25.00

Summit Midstream Partners Is Playing With Fire

Summit Midstream Partners: Lofty Goals For 2023

Price target increased to US$21.50

Third quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind

Summit Midstream Partners, LP Announces Impairment Charges for the Third Quarter Ended September 30, 2022

High number of new directors

Price target increased to US$20.00

Summit Midstream Partners, LP to Report Q3, 2022 Results on Nov 03, 2022

Summit Midstream Partners: Trying To Spend Their Way Out Of Overleverage

President exercised options and sold US$107k worth of stock

Summit Midstream: Arguably A $25+ Stock, Yet Trading In The Low $16s

Second quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind

Summit Midstream Partners, LP Reports Impairment for the Second Quarter Ended June 30, 2022

Summit Midstream Partners, LP to Report Q2, 2022 Results on Aug 04, 2022

Summit Midstream Partners: Common Unitholders Getting Squeezed Out

Price target decreased to US$17.67

Summit Midstream Partners, LP, Annual General Meeting, Jun 24, 2022

Summit Midstream Partners, LP, Annual General Meeting, May 26, 2022

Summit Midstream Partners: Keep Trusting Management

First quarter 2022 earnings released: US$0.001 loss per share (vs US$0.13 profit in 1Q 2021)

Summit Midstream Partners, LP Reports Impairment Charges for the First Quarter Ended March 31, 2022

High number of new directors

Summit Midstream Partners, LP to Report Q1, 2022 Results on May 03, 2022

Summit Midstream Partners, LP, Annual General Meeting, May 10, 2022

Whoops! The Market Forgot About Summit Midstream Partners

President exercised options and sold US$358k worth of stock

Legacy Ridge Capital - Summit Midstream Partners: Lots Of Potential Upside