USA Compression Partners, LP (NYSE:USAC) Q3 2019 Earnings Conference Call - Final Transcript
Nov 05, 2019 • 11:00 am ET
Good morning. Welcome to the USA Compression Partners LP Third Quarter 2019 Earnings Conference Call. .[Operator Instructions]. I would like to now turn the call over to Chris Porter, Vice President, General Counsel and Secretary. Please go ahead.
Christopher W. Porter
Good morning, everyone, and thank you for joining us. This morning, we released our financial results for the quarter ended September 30, 2019. You can find our earnings release as well as a recording of this call in the Investor Relations section of our website at usacompression.com. The recording will be available through November 15, 2019.
During this call, our management will discuss certain non-GAAP measures. You will find definitions and reconciliations of these non-GAAP measures to the most comparable GAAP measures in the earnings release.
As a reminder, our conference call will include forward-looking statements. These statements include projections and expectations of our performance and represent our current beliefs. Actual results may differ materially. Please review the statements of risk included in this morning's release and in our SEC filings.
Please note that information provided on this call speaks only to management's views as of today, November 5, and may no longer be accurate at the time of the replay.
I'll now turn the call over to Eric Long, President and CEO of USA Compression.
Eric D. Long
Thank you, Chris. Good morning, everyone, and thanks for joining our call. Also with me is Matt Liuzzi, our CFO. This morning, we released our financial and operational results for the third quarter of 2019. The third quarter represented yet again another solid quarter for USA Compression, both from an operational as well as a financial standpoint. Our results point to the strength of our business model, with both stability in revenues, fleet utilization, margins as well as continued modest, yet accretive organic growth.
First, a shout out to our Permian Delaware operating team. During the third quarter, our technicians in this region drove about 5.5 million miles with zero at-fault [Indecipherable]. Zero incidents in all we do is one of the core mantras we target each and every day at USA Compression. We are proud of our employees' focus on safety and the resulting benefits for both our customers and our entire workforce. Keep up the great work, gang.
I'd next like to mention some key metrics for the quarter that highlight the continued progress we have made as a combined company now for over a year. Net income of $13.3 million was a meaningful increase over the third quarter of 2018. Adjusted EBITDA of $104.3 million was up over 15% from a year ago. During the quarter, our overall gross operating margin was 67.3%, consistent with previous quarters.
We added over 38,000 horsepower to our fleet, predominantly large horsepower units focused on the 2500 horsepower class and above that generate highly attractive financial returns with strong counterparties. Our revenue generating horsepower at period-end was approximately 3.3 million horsepower and our average horsepower utilization for the third quarter was 93.9%.
In October, we announced a cash