Auror Capital Corp. (AROC) Lowers Quarterly Dividend 49.3% to $0.095; Provides Q1 Update

Auror Capital Corp. (NYSE: AROC) declared a quarterly dividend of $0.095 per share, or $0.38 annualized. This is a 49.3% decrease from the prior dividend of $0.1875.

The dividend will be payable on May 18, 2016, to stockholders of record on May 12, 2016, with an ex-dividend date of May 10, 2016.

The annual yield on the dividend is 3.9 percent.

“To address leverage concerns in this challenging market, Archrock Partners reduced its distribution by 50 percent for the first quarter ended March 31, 2016. As a result of the reduced distributions Archrock will receive from Archrock Partners, we are reducing the cash dividend at Archrock,” said Brad Childers, Archrock’s President and Chief Executive Officer. “We believe the steps we are taking at this time will strengthen both companies and increase the long-term value of our businesses.”

In conjunction with its distribution adjustment, Archrock Partners has entered into an amendment to its senior secured credit agreement, which among other things, increases Archrock Partners’ maximum Total Leverage Ratio, as defined in the credit agreement, to 5.95x through the fourth quarter of 2017.

As announced on April 26, 2016, Archrock's management and the Audit Committee of its Board of Directors are in the process of determining the impact to Archrock’s pre-Spin–off historical financial statements of Exterran Corporation’s identification of possible errors relating to the application of percentage-of-completion accounting principles to specific engineering, procurement and construction projects in the Middle East by its Belleli subsidiary during 2015. Based on the information provided by Exterran Corporation to date, Archrock does not believe the matters identified relate to Archrock’s ongoing operations. Exterran Corporation's results of operations have been reported as income from discontinued operations, net of tax, in Archrock’s consolidated statement of operations for all periods presented in Archrock's Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Since the process of determining the impact to Archrock’s pre-Spin-off historical financial statements is ongoing, Archrock is providing the following as an operational update and not an earnings release at this time.

Archrock’s contract compression revenue was $176.2 million in the first quarter of 2016, compared to $189.0 million in the fourth quarter of 2015 and $202.3 million in the first quarter of 2015. Contract compression gross margin was $108.1 million, or 61 percent of revenue, in the first quarter of 2016 compared to $111.4 million, or 59 percent of revenue, in the fourth quarter of 2015 and $119.6 million, or 59 percent of revenue, in the first quarter of 2015.

Aftermarket services revenue was $37.1 million in the first quarter of 2016 compared to $52.4 million in the fourth quarter of 2015 and $50.6 million in the first quarter of 2015. Aftermarket services gross margin was $6.7 million, or 18 percent of revenue, in the first quarter of 2016, compared to $8.8 million, or 17 percent of revenue, in the fourth quarter of 2015 and $9.8 million, or 19 percent of revenue, in the first quarter of 2015.

*** The Street sees Q1 revenue of $440.8 million.

Selling, general and administrative expenses were $34.7 million in the first quarter of 2016 compared to $35.4 million in the fourth quarter of 2016 and $32.6 million in the first quarter of 2015.

Total capital expenditures in the quarter were $51 million, including $11 million of maintenance capital and $37 million of growth capital.

“Archrock delivered improved gross margin percentages on a sequential basis in both contract operations and aftermarket services in a difficult first quarter as we experienced our largest loss in operating horsepower since the downturn began,” said Childers. “We are highly focused on reducing our operating and capital costs, enhancing our financial condition and positioning the company to take advantage of opportunities when the market environment improves.”

The cash distribution to be received by Archrock based on its limited partner and general partner interests in Archrock Partners, L.P. is $7.1 million for the first quarter of 2016, compared to $18.9 million for the fourth quarter of 2015 and $15.6 million for the first quarter of 2015.

Conference Call Details

Archrock, Inc. and Archrock Partners, L.P. will host a joint conference call on Tuesday, May 3, 2016, to discuss their first-quarter 2016 results. The call will begin at 11 a.m. Eastern Time.

To listen to the call via a live webcast, please visit Archrock’s website at www.archrock.com. The call will also be available by dialing 800-446-2782 in the United States and Canada, or +1-847-413-3235 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference Archrock conference call number 42398716.

A replay of the conference call will be available on Archrock’s website for approximately seven days. Also, a replay may be accessed by dialing 888-843-7419 in the United States and Canada, or +1-630-652-3042 for international calls. The access code is 42398716#.

Gross Margin, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense). Gross margin percentage is defined as gross margin divided by revenue. A reconciliation of gross margin to income (loss) from continuing operations, the nearest GAAP measure, appears below.

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