FTAI Infrastructure Inc. Reports Third Quarter 2023 Results, Declares Dividend of $0.03 per Share of Common Stock

Published

NEW YORK, Oct. 26, 2023 (GLOBE NEWSWIRE) -- FTAI Infrastructure Inc. (NASDAQ:FIP) (the “Company” or “FTAI Infrastructure”) today reported financial results for the third quarter 2023. The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.

Financial Overview

(in thousands, except per share data) 
Selected Financial ResultsQ3’23 
Net Loss Attributable to Stockholders$(56,101) 
Basic and Diluted Loss per Share of Common Stock$(0.55) 
Adjusted EBITDA(1)$24,655  
Adjusted EBITDA - Four core segments (1)(2)$32,208  

_______________________________(1)   For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.(2)   Excludes Sustainability and Energy Transition and Corporate and Other segments.

Third Quarter 2023 Dividends

On October 26, 2023, the Company’s Board of Directors (the “Board”) declared a cash dividend on its common stock of $0.03 per share for the quarter ended September 30, 2023, payable on November 16, 2023 to the holders of record on November 9, 2023.

Business Highlights

• Generated $32.2 million of Adjusted EBITDA(1) from our four core segments.

• Transtar’s new third-party business opportunities (railcar repair, transloading) are expected to commence in coming months and provide strong momentum for 2024.

Jefferson Terminal executed multiple contracts during Q3 with potential to generate meaningful Adjusted EBITDA once operational(3); a portion of these contracts have already commenced and will contribute to Q4.

• Repauno expects to enter into a Phase 2 anchor contract in Q4(3).

(3)   Please see "Disclaimers" at the beginning of the exhibit.

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of the Company’s website, www.fipinc.com, and the Company’s Quarterly Report on Form 10-Q, when available on the Company’s website.

Conference Call

In addition, management will host a conference call on Friday, October 27, 2023 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BI6e621deb011b47878a498f0f2acd7c65. Once registered, participants will receive a dial-in and unique pin to access the call.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at https://www.fipinc.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.

A replay of the conference call will be available after 11:30 A.M. on Friday, October 27, 2023 through 11:30 A.M. on Friday, November 3, 2023 on https://ir.fipinc.com/news-events/presentations.

The information contained on, or accessible through, any websites included in this press release is not incorporated by reference into, and should not be considered a part of, this press release.

About FTAI Infrastructure Inc.

FTAI Infrastructure primarily invests in critical infrastructure with high barriers to entry across the rail, ports and terminals, and power and gas sectors that, on a combined basis, generate strong and stable cash flows with the potential for earnings growth and asset appreciation. FTAI Infrastructure is externally managed by an affiliate of Fortress Investment Group LLC, a leading, diversified global investment firm.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, Transtar’s expected commencement of new third-party business opportunities with strong momentum for 2024, Jefferson Terminal’s ability to generate meaningful Adjusted EBITDA once new contracts commence and are operational and whether Repauno will enter into a Phase 2 anchor contract in Q4 or at all. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond the Company’s control. The Company can give no assurance that its expectations will be attained and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.fipinc.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

For further information, please contact:

Alan AndreiniInvestor RelationsFTAI Infrastructure Inc.(646) 734-9414aandreini@fortress.com

 
Exhibit - Financial Statements
FTAI INFRASTRUCTURE INC.CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(Dollar amounts in thousands, except share and per share data)
 
  Three Months Ended September 30, Nine Months Ended September 30,
   2023   2022   2023   2022 
Revenues        
Total revenues $80,706  $78,559  $239,032  $190,575 
         
Expenses        
Operating expenses  68,416   60,934   196,353   148,231 
General and administrative  2,485   3,208   9,388   8,136 
Acquisition and transaction expenses  649   2,754    1,554   15,862 
Management fees and incentive allocation to affiliate  3,238   2,659   9,304   9,885 
Depreciation and amortization  20,150   18,136   60,577   52,451 
Asset impairment        743    
Total expenses  94,938   87,691   277,919   234,565 
         
Other income (expense)        
Equity in losses of unconsolidated entities  (9,914)  (12,080)   (7,173)  (47,982)
(Loss) gain on sale of assets, net  (263)  (134)  260   (134)
Loss on extinguishment of debt  (2,020)     (2,020)   
Interest expense  (25,999)  (19,161)  (73,431)  (32,106)
Other income (expense)   2,387   (1,132)  3,978   (2,144)
Total other expense  (35,809)  (32,507)  (78,386)  (82,366)
Loss before income taxes  (50,041)  (41,639)  (117,273)  (126,356)
Provision for income taxes   8   1,555   2,560   5,086 
Net loss   (50,049)  (43,194)  (119,833)  (131,442)
Less: Net loss attributable to non-controlling interests in consolidated subsidiaries  (9,932)  (8,381)  (30,101)  (24,327)
Less: Dividends and accretion on redeemable preferred stock   15,984   9,263   45,811   9,263 
Net loss attributable to stockholders/Former Parent $(56,101) $(44,076) $ (135,543) $(116,378)
         
Loss per share:        
Basic $(0.55) $(0.43) $(1.32) $(1.13)
Diluted $(0.55) $(0.43) $(1.32) $(1.13)
Weighted average shares outstanding:        
Basic   102,820,651   102,730,033   102,800,818   102,730,033 
Diluted   102,820,651   102,730,033   102,800,818   102,730,033 

 
FTAI INFRASTRUCTURE INC.CONSOLIDATED BALANCE SHEETS (Unaudited)(Dollar amounts in thousands, except share and per share data)
 
  (Unaudited)  
  September 30, 2023 December 31, 2022
Assets    
Current assets:    
Cash and cash equivalents $24,447  $36,486 
Restricted cash  53,477   113,156 
Accounts receivable, net  64,693   60,807 
Other current assets  37,340   67,355 
Total current assets  179,957   277,804 
Leasing equipment, net  33,965   34,907 
Operating lease right-of-use assets, net  68,462   71,015 
Property, plant, and equipment, net   1,664,361   1,673,808 
Investments  70,143   73,589 
Intangible assets, net  54,517   60,195 
Goodwill  275,367   260,252 
Other assets  38,363   26,829 
Total assets $2,385,135  $2,478,399 
     
Liabilities    
Current liabilities:    
Accounts payable and accrued liabilities $135,820  $136,048 
Current debt, net      
Operating lease liabilities  6,931   7,045 
Other current liabilities  19,658   16,488 
Total current liabilities  162,409   159,581 
Debt, net  1,318,481   1,230,157 
Operating lease liabilities  61,302   63,147 
Other liabilities  62,088   236,130 
Total liabilities  1,604,280   1,689,015 
     
Commitments and contingencies      
     
Redeemable preferred stock ($0.01 par value per share; 200,000,000 shares authorized; 300,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022; redemption amount of $448.2 million at September 30, 2023 and December 31, 2022)  310,401   264,590 
     
Equity    
Common stock ($0.01 par value per share; 2,000,000,000 shares authorized; 99,490,386 and 99,445,074 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively)  994   994 
Additional paid in capital   862,675   911,599 
Accumulated deficit  (150,569)  (60,837)
Accumulated other comprehensive loss  (179,234)  (300,133)
Stockholders' equity  533,866   551,623 
Non-controlling interest in equity of consolidated subsidiaries  (63,412)  (26,829)
Total equity  470,454   524,794 
Total liabilities, redeemable preferred stock and equity $2,385,135  $2,478,399 

 
FTAI INFRASTRUCTURE INC.CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(Dollar amounts in thousands, unless otherwise noted)
 
  Nine Months Ended September 30,
   2023   2022 
Cash flows from operating activities:    
Net loss $ (119,833) $(131,442)
Adjustments to reconcile net loss to net cash used in operating activities:    
Equity in losses of unconsolidated entities  7,173   47,982 
(Gain) loss on sale of assets, net  (260)  134 
Loss on extinguishment of debt  2,020    
Equity-based compensation  5,814   3,042 
Depreciation and amortization  60,577   52,451 
Asset impairment  743    
Change in deferred income taxes  2,148   4,851 
Change in fair value of non-hedge derivative  1,125   (1,058)
Amortization of deferred financing costs  4,910   2,950 
Amortization of bond discount  3,472    
Provision for credit losses  1,661   418 
Other     899 
Change in:    
Accounts receivable  (5,547)  (20,476)
Other assets  17,387   (17,632)
Accounts payable and accrued liabilities  4,204   23,199 
Management fees payable to affiliate  10,926   2,381 
Other liabilities  1,266   (5,390)
Net cash used in operating activities  (2,214)  (37,691)
     
Cash flows from investing activities:    
Investment in unconsolidated entities  (6,070)  (4,481)
Investment in convertible promissory notes  (51,044)  (20,000)
Acquisition of business, net of cash acquired  (4,448)  (3,819)
Acquisition of property, plant and equipment  (78,712)  (172,226)
Proceeds from sale of leasing equipment  116    
Proceeds from sale of property, plant and equipment  1,148   5,656 
Net cash used in investing activities  (139,010)  (194,870)

Cash flows from financing activities:    
Proceeds from debt  162,100   482,375 
Repayment of debt  (75,131)   
Payment of deferred financing costs  (6,472)  (12,803)
Proceeds from issuance of redeemable preferred stock     291,000 
Redeemable preferred stock issuance costs     (16,418)
Cash dividends - common stock  (9,254)   
Capital contribution from non-controlling interests     732 
Net transfers to Former Parent, net     (617,322)
Settlement of equity-based compensation  (90)  (148)
Distributions to non-controlling interests  (1,647)   
Distribution to Manager     (79)
Net cash provided by financing activities  69,506   127,337 
     
Net decrease in cash and cash equivalents and restricted cash  (71,718)  (105,224)
Cash and cash equivalents and restricted cash, beginning of period   149,642   301,855 
Cash and cash equivalents and restricted cash, end of period $77,924  $196,631 

Key Performance Measures

The Chief Operating Decision Maker (“CODM”) utilizes Adjusted EBITDA as our key performance measure.Adjusted EBITDA provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions. Adjusted EBITDA is defined as net income (loss) attributable to shareholders or Former Parent, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, interest expense, interest costs on pension and other pension expense benefits (“OPEB”) liabilities, dividends and accretion expense related to redeemable preferred stock, and other non-recurring items, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

The following table sets forth a reconciliation of net loss attributable to stockholders or Former Parent to Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022:

 Three Months Ended September 30, Change Nine Months EndedSeptember 30, Change
(in thousands) 2023   2022    2023   2022  
Net loss attributable to stockholders/Former Parent$(56,101) $(44,076) $(12,025) $(135,543) $(116,378) $(19,165)
Add: Provision for income taxes  8   1,555   (1,547)   2,560   5,086   (2,526)
Add: Equity-based compensation expense 4,277   1,377   2,900   5,814   3,042   2,772 
Add: Acquisition and transaction expenses 649   2,754   (2,105)  1,554   15,862   (14,308)
Add: Losses on the modification or extinguishment of debt and capital lease obligations 2,020      2,020   2,020      2,020 
Add: Changes in fair value of non-hedge derivative instruments    (310)  310   1,125   (1,058)  2,183 
Add: Asset impairment charges          743      743 
Add: Incentive allocations                 
Add: Depreciation & amortization expense 20,150   18,136   2,014   60,577   52,451   8,126 
Add: Interest expense 25,999   19,161   6,838   73,431   32,106   41,325 
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 5,554   9,770   (4,216)  20,630   22,002   (1,372)
Add: Dividends and accretion on redeemable preferred stock 15,984   9,263   6,721   45,811   9,263   36,548 
Add: Interest and other costs on pension and OPEB liabilities 480   896   (416)  1,440   896   544 
Add: Other non-recurring items (2) 1,131      1,131   2,470      2,470 
Less: Equity in losses of unconsolidated entities 9,914   12,080   (2,166)  7,173   47,982   (40,809)
Less: Non-controlling share of Adjusted EBITDA (3) (5,410)  (4,502)  (908)  (15,577)  (12,034)  (3,543)
Adjusted EBITDA (non-GAAP)$24,655  $26,104  $(1,449) $74,228  $59,220  $15,008 

________________________________________________________
(1)Includes the following items for the three months ended September 30, 2023 and 2022: (i) net loss of $(9,941) and $(12,177), (ii) interest expense of $8,830 and $7,551, (iii) depreciation and amortization expense of $6,965 and $7,883, (iv) acquisition and transaction expenses of $50 and $(16), (v) changes in fair value of non-hedge derivative instruments of $(352) and $6,432, (vi) equity-based compensation of $2 and $95 and (vii) asset impairment of $— and $2, respectively. Includes the following items for the nine months ended September 30, 2023 and 2022: (i) net loss of $(7,283) and $(48,184), (ii) interest expense of $25,166 and $20,809, (iii) depreciation and amortization expense of $20,598 and $20,516, (iv) acquisition and transaction expenses of $307 and $375, (v) changes in fair value of non-hedge derivative instruments of $(18,162) and $28,164, (vi) equity-based compensation of $4 and $288 and (vii) asset impairment of $— and $34, respectively.
  
(2)Includes the following items for the three months ended September 30, 2023: certain non-cash expenses related to cancellation of RSUs of $1,131. Includes the following items for the nine months ended September 30, 2023: certain non-cash expenses related to cancellation of RSUs and Railroad severance expense of $2,470.
  
(3)Includes the following items for the three months ended September 30, 2023 and 2022: (i) equity-based compensation of $718 and $102, (ii) (benefit from) provision for income taxes of $(19) and $464, (iii) interest expense of $1,821 and $1,326, (iv) depreciation and amortization expense of $2,870 and $2,507, (v) changes in fair value of non-hedge derivative instruments of $— and $(15), (vi) acquisition and transaction expense of $19 and $117 and (vii) interest and other costs on pension and OPEB liabilities of $1 and $1, respectively. Includes the following items for the nine months ended September 30, 2023 and 2022: (i) equity-based compensation of $904 and $352, (ii) provision for income taxes of $69 and $494, (iii) interest expense of $5,558 and $4,029, (iv) depreciation and amortization expense of $8,950 and $7,091, (v) changes in fair value of non-hedge derivative instruments of $61 and $(50), (vi) other non-recurring items of $3 and $—, (vii) acquisition and transaction expense of $27 and $117, (viii) interest and other costs on pension and OPEB liabilities of $3 and $1 and (ix) asset impairment of $2 and $—, respectively.

The following table sets forth a reconciliation of net income (loss) attributable to stockholders to Adjusted EBITDA for our four core segments for the three months ended September 30, 2023:

 Three Months Ended September 30, 2023
(in thousands)Railroad Jefferson Terminal Repauno Power and Gas Four Core Segments
Net income (loss) attributable to stockholders/Former Parent$ 10,620  $(12,017) $(4,946) $(6,301) $ (12,644)
Add: Provision for (benefit from) income taxes  524   (126)  103       501 
Add: Equity-based compensation expense  262   2,932   1,083      4,277 
Add: Acquisition and transaction expenses  186   80         266 
Add: Losses on the modification or extinguishment of debt and capital lease obligations  937            937 
Add: Changes in fair value of non-hedge derivative instruments              
Add: Asset impairment charges              
Add: Incentive allocations              
Add: Depreciation and amortization expense  4,362   12,643   2,390      19,395 
Add: Interest expense  82   8,280   642      9,004 
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)          7,214   7,214 
Add: Dividends and accretion on redeemable preferred stock              
Add: Interest and other costs on pension and OPEB liabilities  480            480 
Add: Other non-recurring items (2)    1,131         1,131 
Less: Equity in earnings of unconsolidated entities          7,057   7,057 
Less: Non-controlling share of Adjusted EBITDA (3)  (19)  (5,160)  (231)     (5,410)
Adjusted EBITDA$17,434  $7,763  $(959) $7,970  $32,208 

________________________________________________________
(1)Power and Gas:
 Includes the following items for the three months ended September 30, 2023: (i) net loss of $(7,057), (ii) interest expense of $7,932, (iii) depreciation and amortization expense of $6,639, (iv) acquisition and transaction expenses of $50, (v) changes in fair value of non-hedge derivative instruments of $(352) and (vi) equity-based compensation of $2.
  
(2)Jefferson Terminal:
 Includes the following items for the three months ended September 30, 2023: certain non-cash expenses related to cancellation of RSUs of $1,131.
  
(3)Railroad:
 Includes the following items for the three months ended September 30, 2023: (i) equity-based compensation of $1, (ii) provision for income taxes of $3, (iii) depreciation and amortization expense of $13, (iv) interest and other costs on pension and OPEB liabilities of $1 and (v) acquisition and transaction expense of $1.
 Jefferson Terminal:
 Includes the following items for the three months ended September 30, 2023: (i) equity-based compensation of $658, (ii) benefit from income taxes of $(30), (iii) interest expense of $1,786, (iv) depreciation and amortization expense of $2,728 and (v) acquisition and transaction expense of $18.
 Repauno:
 Includes the following items for the three months ended September 30, 2023: (i) equity-based compensation of $59, (ii) interest expense of $35, (iii) depreciation and amortization expense of $129 and (iv) provision for income taxes of $8.

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