Revenue during the quarter dropped 13.34 percent to $61.13 million from $70.54 million in the previous year period. Gross margin for the quarter expanded 18 basis points over the previous year period to 69.11 percent. Total expenses were 94.79 percent of quarterly revenues, up from 77.96 percent for the same period last year. That has resulted in a contraction of 1683 basis points in operating margin to 5.21 percent.

Operating income for the quarter was $3.19 million, compared with $15.55 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $34.63 million compared with $39.48 million in the prior year period. At the same time, adjusted EBITDA margin improved 69 basis points in the quarter to 56.66 percent from 55.97 percent in the last year period.

“As we have progressed through the first three quarters of 2016, we anticipated the third quarter results would reflect, in part, the softer activity levels we experienced earlier in the year,” said Eric D. Long, USA Compression’s president and chief executive officer. “Our business generally serves as a lagging indicator of our customers’ activity, and we expect the general recovery we have seen in the energy sector since the springtime lows to positively impact our business as we move forward. Specifically, recent trends in our business, including customer demand indications, actual contracting activity and fleet utilization provide additional optimism as we approach the end of 2016 and look to the start of 2017. Our customers are continuing to pursue projects that will require meaningful compression, and we expect to grow alongside them, while continuing to be judicious in our capital allocation and keeping a close watch on our cost structure. ”

For financial year 2016, Usa Compression Partners projects net income to be in the range of $9.30 million to $14.30 million.