Cypress Environmental Partners LP

09/16/2021 | Press release | Distributed by Public on 09/16/2021 15:01

Costs Associated with Exit or Disposal Activities (Form 8-K)

Costs Associated with Exit or Disposal Activities

On September 10, 2021, management of Cypress Environmental Partners, L.P. (the 'Partnership') committed to close Cypress Brown Integrity, LLC ('CBI'), its Pipeline & Process Services segment. CBI provided customers with hydrotesting, chemical cleaning, drying, water treatment, nitrogen and other related services. CBI is located in Giddings, Texas and a plan of termination will impact approximately 18 employees.

The Partnership's reasons for exiting the business include the decline in new pipeline construction projects and the inability to obtain more work directly with pipeline owners on maintenance projects. CBI initiated and completed the closure of its operations on September 10, 2021.

The Partnership expects to incur a loss of approximately $2.0 million on the disposal of intangible assets associated with CBI. The Partnership expects to sell CBI's property, plant and equipment, which has a net book value of approximately $1.0 million, and will record gains or losses as those assets are sold. The Partnership also expects to incur employee severance expenses of approximately $0.1 million.

Costs associated with closure activities are based on currently available information and preliminary accounting assessments, and reflect management's best estimates; accordingly, actual cash costs and non-cash charges and their timing may differ from those stated above.

Material Impairments

The information set forth above, in response to Item 2.05, is incorporated by reference herein, in response to Item 2.06.