Hi-Crush Inc. (NYSE: HCR) (the "Company"), a fully-integrated
provider of proppant and logistics services, today reported third
quarter 2019 results. Revenues during the third quarter of
2019 totaled $173.0 million on total volumes sold of 2,685,736
tons. This compares to $178.0 million of revenues during the
second quarter of 2019 on total volumes sold of 2,662,086 tons.
For the third quarter of 2019, net loss was
$(268.5) million, including $346.4 million of non-cash asset
impairments, resulting in basic and diluted loss of $(2.67) per
share. Adjusted net loss for the third quarter of 2019 was $(3.5)
million or basic and diluted adjusted loss of $(0.03) per share,
excluding the non-cash asset impairments. The Company reported
basic and diluted loss of $(1.16) per share in the second quarter
of 2019, including a $115.5 million non-cash charge for deferred
taxes related to the corporate conversion to a C-Corporation (the
"Conversion"). Adjusted EBITDA for the third quarter of 2019 was
$17.9 million, compared to $24.7 million for the second quarter of
2019.
"For the third quarter of 2019, we generated
adjusted EBITDA of approximately $18 million, increased last mile
truckloads by seven percent, and achieved frac sand sales at the
high end of our guidance," said Robert E. Rasmus, Chairman and
Chief Executive Officer of Hi-Crush Inc. "We continue to receive
positive feedback from customers in response to our equipment
upgrades, expanded last mile services, and reliable frac sand
supply. I am proud of our team and our ability to achieve these
results despite challenging market conditions.
"We are well-positioned to navigate the current
market backdrop, and are focused on three key priorities -
leveraging our integrated portfolio to deliver high quality
customer service, improving profitability through operational
optimization and cost reduction, as well as prudent capital
allocation," continued Mr. Rasmus. "We have significantly reduced
our 2019 capital expenditures from the budget set at the beginning
of the year and are intensely focused on free cash flow generation.
The asset base we have assembled, managed according to these
priorities, gives us the tools to generate near- and long-term
value for customers and investors."
Third Quarter 2019 Results
Revenues during the third quarter of 2019
totaled $173.0 million, compared to $178.0 million in the second
quarter of 2019. Revenues associated with logistics services
were $57.4 million in the third quarter of 2019, reflecting an
increase of 12% compared to $51.1 million in the second quarter of
2019. The improvements were due primarily to increased demand
for logistics services, including through the acquisition of
Pronghorn Logistics in May 2019. Revenues from the sale of
logistics equipment were $1.4 million in the third quarter of 2019,
compared to $1.0 million in the second quarter of 2019.
Revenues from sales of frac sand totaled $114.2
million in the third quarter of 2019, compared to $125.9 million in
the second quarter of 2019. Total volumes sold were 2.69
million tons, a slight increase compared to the second quarter of
2019 and at the high end of the previously guided range of 2.4 to
2.7 million tons. Average sales price was $43 per ton for the
third quarter of 2019 compared to $47 per ton in the second quarter
of 2019, driven by customer mix and continued pricing pressure.
Volumes sold directly to E&Ps during the
third quarter of 2019 were 63%, compared to 66% in the second
quarter of 2019 and 40% in the third quarter of 2018. Volumes
sold through Pronghorn Energy Services represented 34% of total
volumes in the third quarter of 2019, compared to 28% in the second
quarter of 2019.
Contribution margin was $10.99 per ton in the
third quarter of 2019, compared to $13.80 per ton in the second
quarter of 2019. The sequential decrease in contribution
margin per ton primarily resulted from lower pricing due to
continued oversupply of frac sand and increased competition.
General and administrative expenses totaled
$11.5 million in the third quarter of 2019, excluding non-recurring
expenses of $0.5 million associated with business development
activities and costs associated with the Conversion. General
and administrative expenses totaled $12.1 million in the second
quarter of 2019, excluding $3.1 million of similar expenses. The
sequential decline in general and administrative expenses was
primarily driven by cost reductions, decreased headcount and
related compensation expense.
During the third quarter of 2019, the Company
completed an impairment assessment of goodwill and long-lived
assets, including Northern White production facilities,
right-of-use assets and intangible assets based on current and
expected utilization of the assets and market conditions. As a
result, during the third quarter of 2019, the Company recorded
total asset impairments of $346.4 million primarily driven by
$215.5 million for the write-down of the Augusta and Whitehall
facilities to their estimated fair value, $76.3 million for railcar
operating lease right-of-use assets, and $48.6 million for goodwill
and certain intangible assets.
During the three and nine months ended
September 30, 2019, the Company incurred $0.7 million and $1.6
million of other operating expenses primarily associated with
staffing reductions to better align with market conditions.
"Market conditions for frac sand softened late
in the third quarter, driven by continued oversupply and further
declines in activity, resulting in lower pricing and
profitability," said Laura C. Fulton, Chief Financial Officer of
Hi-Crush Inc. "We remained proactive in further rationalizing costs
and spending across the organization, resulting in additional
reductions in G&A and lower capex for the remainder of 2019 and
into 2020. The non-cash impairment charges incurred for certain of
our assets during the third quarter reflect market conditions, but
do not impact our ability to efficiently execute on our strategy
and deliver quality customer service."
Operational Update
For the third quarter of 2019, Hi-Crush sold
2.69 million tons of frac sand from its operating production
facilities, including Blair, Whitehall and Wyeville in Wisconsin,
and the Kermit Complex in West Texas. Sales occurred at the
minegate, at the Company’s in-basin terminals, and at the
wellsite.
NexStage Systems continued to deploy upgraded
silo sets, alongside additional equipment sales, which increased to
$1.4 million in the third quarter of 2019, up from $1.0 million in
the second quarter of 2019.
Including the last mile operations acquired on
May 7, 2019, on a pro-forma basis from January 1, 2019 forward,
truckloads delivered by Pronghorn Energy Services increased by 36%
in the second quarter of 2019 over the first quarter of 2019, and a
further 7% in the third quarter of 2019 over the second quarter of
2019, reflecting continued strong utilization of deployed
crews. As of September 30, 2019, the Company had last mile
crews operating in the Permian, Eagle Ford, Marcellus / Utica,
Powder River, Mid-Con and Bakken regions.
The Company continues to focus on additional
improvements to PropDispatch, its proprietary tracking, monitoring
and invoicing software suite. Updates made during the third quarter
of 2019 focused on the simplification and automation of various
processes, including silo inventory tracking, driver-dispatch
communication, load measurement, and integration of inventory data
flows across the supply chain.
"The strength of our operations during the third
quarter reflects the merits of our strategy, and would not have
been possible without the great team we have assembled," said M.
Alan Oehlert, Chief Operating Officer of Hi-Crush Inc. "We are
positioned to succeed across a range of market environments,
supported by our focus on delivering quality customer service
through enhanced logistics offerings, increased integration of
technology, and consistent execution."
Liquidity
As of September 30, 2019, Hi-Crush Inc. had
total liquidity of $95.9 million, comprised of $48.4 million of
cash and $47.5 million in available borrowing capacity under its
senior secured revolving credit facility (the "ABL
Facility"). As of September 30, 2019, Hi-Crush Inc. remains
completely undrawn on its ABL Facility.
"We maintain strong liquidity, as we remain
undrawn on our asset-backed facility and ended the quarter with
nearly $100 million in cash and availability," continued Ms.
Fulton. "Market conditions and the outlook for the remainder of
2019 resulted in our Board’s decision to focus on cash conservation
and financial flexibility over the near-term."
Capital Expenditures
Total capital expenditures for the three and
nine months ended September 30, 2019 totaled $8.4 million and
$66.3 million, respectively. For the fourth quarter of 2019,
maintenance and growth capital expenditures are expected to range
between $7 and $10 million. The Company expects a significant
reduction in its 2020 capital expenditures, and is preliminarily
announcing maintenance and growth capital expenditures of less than
$25 million.
Free Cash Flow
Free cash flow was $(5.1) million and $(23.0)
million for the three and nine months ended September 30,
2019, respectively, reflecting $21.4 million and $42.8 million,
respectively, related to the semi-annual interest payments made in
each of February 2019 and August 2019 on the Senior Notes.
"We continue to forecast being free cash flow
positive in 2020, as we remain disciplined in our capital spending
and strive to structurally reduce our cost profile through the use
of technology and realization of other efficiencies," said Ms.
Fulton. "Our focus on cost reductions and significantly reduced
capex plans are a reflection of our commitment to capital
discipline."
Outlook
For the fourth quarter of 2019, the Company
expects sand sales volumes, contribution margin per ton, and
Adjusted EBITDA to decline as compared to the third quarter of
2019, driven by the impacts of E&P budget exhaustion and other
seasonal factors on demand for frac sand and logistics services.
The Company expects continued deployment of last mile and wellsite
equipment and crews during the remainder of 2019 based on customer
conversations and recent field trials.
"The fourth quarter will be influenced by
remaining customer capital budgets, holiday schedules and other
year-end factors," said Mr. Rasmus. "As a result, we expect sand
volumes to decline by ten percent or more. In response, we are
elevating our strategy of prioritizing profitability over market
share, as we remain committed to making business decisions that
benefit our stakeholders. We will continue to turn
down volumes and other activity that we do not believe
reflects reasonable profitability for our services, and expect this
dynamic to continue through the remainder of 2019. Our future
success will be driven by execution and controlling what we can
control, as evidenced by significantly lowering capital
expenditures for the remainder of 2019 and 2020, pursuing further
cost reductions, and focusing on generating free cash flow. We will
continue to leverage the platform of assets we have developed to
create value for our customers and investors over the near and
long-term."
Conference Call
On Wednesday, November 6, 2019, Hi-Crush
Inc. will hold a conference call for investors at 8:00 a.m. Central
Time (9:00 a.m. Eastern Time) to discuss Hi-Crush Inc.’s third
quarter 2019 results. Hosting the call will be Robert E. Rasmus,
Chairman and Chief Executive Officer, M. Alan Oehlert, Chief
Operating Officer, and Laura C. Fulton, Chief Financial Officer.
The call can be accessed live over the telephone by dialing (877)
407-0789, or for international callers, (201) 689-8562. A replay
will be available shortly after the call and can be accessed by
dialing (844) 512-2921, or for international callers, (412)
317-6671. The passcode for the replay is 13694766. The replay will
be available until November 20, 2019.
Interested parties may also listen to a
simultaneous webcast of the conference call by logging onto
Hi-Crush Inc.’s website at www.hicrushinc.com under the
Investors-Event Calendar and Presentations section. A replay of the
webcast will also be available for approximately 30 days following
the call. The slide presentation to be referenced on the call will
also be on Hi-Crush Inc.’s website at www.hicrushinc.com under
the Investors-Event Calendar and Presentations section.
Non-GAAP Financial Measures
This news release and the accompanying schedules
include the non-GAAP financial measure of adjusted net income,
adjusted earnings per share, EBITDA, Adjusted EBITDA, free cash
flow and contribution margin, which may be used periodically by
management when discussing our financial results with investors and
analysts. The accompanying schedules of this news release
provide reconciliations of these non-GAAP financial measures to
their most directly comparable financial measures calculated and
presented in accordance with generally accepted accounting
principles in the United States of America ("GAAP"). Our
non-GAAP financial measures should not be considered as
alternatives to the most directly comparable GAAP financial
measure.
We define adjusted net income (loss) as net
income (loss) adjusted for certain unusual and/or infrequent
transactions, such as non-cash asset impairments, the tax impacts
related to asset impairments and non-cash charge for deferred taxes
related to the corporate conversion to a C-Corporation. We
define adjusted earnings per common share as adjusted net income
(loss) divided by the basic and diluted weighted average number of
shares of common stock outstanding during the reporting
period. Adjusted net income (loss) and adjusted earnings per
common share are utilized by our management and other users of our
financial statements, such as investors, commercial banks and
research analysts, to assess the recurring historical financial
performance of our assets.
We define EBITDA as net income, plus; (i)
depreciation, depletion and amortization; (ii) interest expense,
net of interest income; and (iii) income tax expense
(benefit). We define Adjusted EBITDA as EBITDA, plus; (i)
non-cash impairments of goodwill and other assets; (ii) change in
estimated fair value of contingent consideration; (iii) earnings
(loss) from equity method investments; (iv) gain on remeasurement
of equity method investments; (v) loss on extinguishment of debt;
and (vi) non-recurring business development costs and other
items. EBITDA and Adjusted EBITDA are supplemental measures
utilized by our management and other users of our financial
statements, such as investors, commercial banks and research
analysts, to assess the financial performance of our assets without
regard to financing methods, capital structure or historical cost
basis.
We define free cash flow as net cash provided by
(used in) operating activities less maintenance and growth capital
expenditures. Free cash flow is a supplemental measure
utilized by our management and other users of our financial
statements, such as investors, commercial banks and research
analysts, to assess our ability to generate cash from operations
for mandatory obligations, including debt repayment, and
discretionary investment opportunities.
We use contribution margin, which we define as
total revenues less costs of goods sold excluding depreciation,
depletion and amortization, to measure our financial and operating
performance. Contribution margin excludes other operating
expenses and income, including costs not directly associated with
the operations of our business such as accounting, human resources,
information technology, legal, sales and other administrative
activities. We believe contribution margin is a meaningful
measure because it provides an operating and financial measure of
our ability to generate margin in excess of our operating cost
base.
About Hi-Crush Inc.
Hi-Crush Inc. is a fully-integrated provider of
proppant and logistics services for hydraulic fracturing
operations, offering frac sand production, advanced wellsite
storage systems, flexible last mile services, and innovative
software for real-time visibility and management across the entire
supply chain. Our strategic suite of solutions provides
operators and service companies in all major U.S. oil and gas
basins with the ability to build safety, reliability and efficiency
into every completion.
Forward-Looking Statements
Some of the information in this news release may
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking
statements give our current expectations, and contain projections
of results of operations or of financial condition, or forecasts of
future events. Words such as "may," "should," "assume," "forecast,"
"position," "predict," "strategy," "expect," "intend," "hope,"
"plan," "estimate," "anticipate," "could," "believe," "project,"
"budget," "potential," "likely," or "continue," and similar
expressions are used to identify forward-looking statements. They
can be affected by assumptions used or by known or unknown risks or
uncertainties. Consequently, no forward-looking statements can be
guaranteed. When considering these forward-looking
statements, you should keep in mind the risk factors and other
cautionary statements in Hi-Crush Inc.’s reports filed with the
Securities and Exchange Commission (the "SEC"), including those
described under Item 1A of Hi-Crush Inc.’s Form 10-K for the year
ended December 31, 2018 and any subsequently filed 10-Q.
Actual results may vary materially. You are cautioned not to
place undue reliance on any forward-looking statements. You
should also understand that it is not possible to predict or
identify all such factors and should not consider the risk factors
in our reports filed with the SEC or the following list to be a
complete statement of all potential risks and uncertainties.
Factors that could cause our actual results to differ materially
from the results contemplated by such forward looking statements
include: the volume of frac sand we are able to sell; the price at
which we are able to sell frac sand; the outcome of any pending
litigation, claims or assessments, including unasserted claims;
changes in the price and availability of natural gas or
electricity; changes in prevailing economic conditions; difficulty
collecting receivables. All forward-looking statements are
expressly qualified in their entirety by the foregoing cautionary
statements. Hi-Crush Inc.’s forward-looking statements speak
only as of the date made and Hi-Crush Inc. undertakes no obligation
to update or revise its forward-looking statements, whether as a
result of new information, future events or otherwise.
Investor contact:Caldwell
Bailey, Manager, Investor RelationsMarc Silverberg,
ICRir@hicrushinc.com(713) 980-6270
Unaudited Condensed Consolidated Balance
Sheets(Amounts in thousands, except unit and share
amounts)
|
September 30, 2019 |
|
December 31, 2018 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
48,352 |
|
|
$ |
114,256 |
|
Accounts receivable, net |
95,122 |
|
|
101,029 |
|
Inventories |
45,168 |
|
|
57,089 |
|
Prepaid expenses and other current assets |
13,396 |
|
|
13,239 |
|
Total current assets |
202,038 |
|
|
285,613 |
|
Property, plant and equipment,
net |
825,320 |
|
|
1,031,188 |
|
Operating lease right-of-use
assets |
49,577 |
|
|
— |
|
Goodwill and intangible
assets, net |
39,227 |
|
|
71,575 |
|
Equity method investments |
35,440 |
|
|
37,354 |
|
Other assets |
1,756 |
|
|
8,108 |
|
Total assets |
$ |
1,153,358 |
|
|
$ |
1,433,838 |
|
Liabilities and Stockholders'
Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
47,370 |
|
|
$ |
71,039 |
|
Accrued and other current liabilities |
36,596 |
|
|
61,337 |
|
Current portion of deferred revenues |
11,711 |
|
|
19,940 |
|
Current portion of long-term debt |
3,964 |
|
|
2,194 |
|
Current portion of operating lease liabilities |
38,155 |
|
|
— |
|
Total current liabilities |
137,796 |
|
|
154,510 |
|
Deferred revenues |
18,684 |
|
|
9,845 |
|
Long-term debt |
445,211 |
|
|
443,283 |
|
Operating lease liabilities |
81,283 |
|
|
— |
|
Asset retirement obligations |
10,836 |
|
|
10,677 |
|
Deferred tax liabilities |
33,508 |
|
|
— |
|
Other liabilities |
3,840 |
|
|
8,276 |
|
Total liabilities |
731,158 |
|
|
626,591 |
|
Commitments and
contingencies |
|
|
|
Stockholders' equity: |
|
|
|
Limited partners interest, 100,874,988 units issued and outstanding
at December 31, 2018 |
— |
|
|
811,477 |
|
Preferred stock, $0.01 par value, 100,000,000 shares authorized;
zero issued and outstanding at September 30, 2019 |
— |
|
|
— |
|
Common stock, $0.01 par value, 500,000,000 shares authorized;
100,909,799 issued and outstanding at September 30, 2019 |
1,009 |
|
|
— |
|
Additional paid-in-capital |
804,180 |
|
|
— |
|
Retained deficit |
(382,030 |
) |
|
— |
|
Accumulated other comprehensive loss |
(959 |
) |
|
(4,230 |
) |
Total stockholders' equity |
422,200 |
|
|
807,247 |
|
Total liabilities and stockholders' equity |
$ |
1,153,358 |
|
|
$ |
1,433,838 |
|
|
Unaudited Condensed Consolidated Statements of
Operations(Amounts in thousands, except shares and per
share amounts)
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
2019 |
|
2018 (1) |
|
2019 |
Revenues |
$ |
172,972 |
|
|
$ |
213,972 |
|
|
$ |
178,001 |
|
Cost of goods sold (excluding
depreciation, depletion and amortization) |
143,460 |
|
|
147,583 |
|
|
141,272 |
|
Depreciation, depletion and
amortization |
14,320 |
|
|
10,241 |
|
|
14,062 |
|
Gross profit |
15,192 |
|
|
56,148 |
|
|
22,667 |
|
Operating costs and
expenses: |
|
|
|
|
|
General and administrative expenses |
12,020 |
|
|
14,164 |
|
|
15,210 |
|
Depreciation and amortization |
1,773 |
|
|
1,347 |
|
|
1,697 |
|
Accretion of asset retirement obligations |
107 |
|
|
124 |
|
|
130 |
|
Asset impairments |
346,384 |
|
|
— |
|
|
— |
|
Change in estimated fair value of contingent consideration |
(5,181 |
) |
|
— |
|
|
(672 |
) |
Other operating expenses, net |
658 |
|
|
754 |
|
|
469 |
|
Income (loss) from operations |
(340,569 |
) |
|
39,759 |
|
|
5,833 |
|
Other income (expense): |
|
|
|
|
|
Earnings from equity method investments |
1,880 |
|
|
1,624 |
|
|
1,284 |
|
Gain on remeasurement of equity method investment |
— |
|
|
— |
|
|
3,612 |
|
Interest expense |
(11,790 |
) |
|
(8,012 |
) |
|
(11,806 |
) |
Loss on extinguishment of debt |
— |
|
|
(6,233 |
) |
|
— |
|
Income (loss) before income
tax |
(350,479 |
) |
|
27,138 |
|
|
(1,077 |
) |
Income tax expense
(benefit): |
|
|
|
|
|
Current tax expense |
1,087 |
|
|
— |
|
|
259 |
|
Deferred tax expense (benefit) |
(83,069 |
) |
|
— |
|
|
660 |
|
Deferred tax resulting from conversion to a corporation |
— |
|
|
— |
|
|
115,488 |
|
Income tax expense (benefit) |
(81,982 |
) |
|
— |
|
|
116,407 |
|
Net income (loss) |
$ |
(268,497 |
) |
|
$ |
27,138 |
|
|
$ |
(117,484 |
) |
Earnings (loss) per common
share: |
|
|
|
|
|
Basic |
$ |
(2.67 |
) |
|
$ |
0.30 |
|
|
$ |
(1.16 |
) |
Diluted |
$ |
(2.67 |
) |
|
$ |
0.29 |
|
|
$ |
(1.16 |
) |
Weighted average common stock outstanding: |
|
|
|
|
|
Basic |
100,711,426 |
|
|
89,277,833 |
|
|
101,312,754 |
|
Diluted |
100,711,426 |
|
|
90,814,714 |
|
|
101,312,754 |
|
(1)Financial information has been recast to include the results
attributable to the sponsor and general partner.
|
|
|
Nine Months Ended |
|
September 30, |
|
2019 |
|
2018 (1) |
Revenues |
$ |
510,883 |
|
|
$ |
680,605 |
|
Cost of goods sold (excluding
depreciation, depletion and amortization) |
415,254 |
|
|
444,097 |
|
Depreciation, depletion and
amortization |
39,654 |
|
|
28,522 |
|
Gross profit |
55,975 |
|
|
207,986 |
|
Operating costs and
expenses: |
|
|
|
General and administrative expenses |
39,843 |
|
|
38,050 |
|
Depreciation and amortization |
5,146 |
|
|
2,408 |
|
Accretion of asset retirement obligations |
366 |
|
|
373 |
|
Asset impairments |
346,384 |
|
|
— |
|
Change in estimated fair value of contingent consideration |
(5,853 |
) |
|
— |
|
Other operating expenses, net |
1,558 |
|
|
2,124 |
|
Income (loss) from operations |
(331,469 |
) |
|
165,031 |
|
Other income (expense): |
|
|
|
Earnings from equity method investments |
4,280 |
|
|
3,934 |
|
Gain on remeasurement of equity method investment |
3,612 |
|
|
— |
|
Interest expense |
(34,186 |
) |
|
(15,207 |
) |
Loss on extinguishment of debt |
— |
|
|
(6,233 |
) |
Income (loss) before income
tax |
(357,763 |
) |
|
147,525 |
|
Income tax expense
(benefit): |
|
|
|
Current tax expense |
1,346 |
|
|
— |
|
Deferred tax benefit |
(82,409 |
) |
|
— |
|
Deferred tax resulting from conversion to a corporation |
115,488 |
|
|
— |
|
Income tax expense (benefit) |
34,425 |
|
|
— |
|
Net income (loss) |
$ |
(392,188 |
) |
|
$ |
147,525 |
|
Earnings (loss) per common
share: |
|
|
|
Basic |
$ |
(3.88 |
) |
|
$ |
1.67 |
|
Diluted |
$ |
(3.88 |
) |
|
$ |
1.64 |
|
Weighted average common stock outstanding: |
|
|
|
Basic |
101,012,753 |
|
|
88,848,290 |
|
Diluted |
101,012,753 |
|
|
90,385,171 |
|
(1)Financial information has been recast to include the results
attributable to the sponsor and general partner.
Unaudited Adjusted Net Income and Adjusted Earnings Per
Common Share(Amounts in thousands, except shares and per
share amounts)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2019 |
|
September 30, 2019 |
Net loss |
$ |
(268,497 |
) |
|
$ |
(392,188 |
) |
Adjustments to reconcile to
adjusted net loss: |
|
|
|
Asset impairments |
346,384 |
|
|
346,384 |
|
Income tax benefit related to asset impairments |
(81,400 |
) |
|
(81,400 |
) |
Deferred tax resulting from conversion to a corporation |
— |
|
|
115,488 |
|
Adjusted net loss |
$ |
(3,513 |
) |
|
$ |
(11,716 |
) |
|
|
|
|
Basic weighted average common
shares outstanding |
100,711,426 |
|
|
101,012,753 |
|
Potentially dilutive common
shares |
— |
|
|
— |
|
Diluted weighted average
common shares outstanding |
100,711,426 |
|
|
101,012,753 |
|
|
|
|
|
Adjusted loss per share -
basic |
$ |
(0.03 |
) |
|
$ |
(0.12 |
) |
Adjusted loss per share -
diluted |
$ |
(0.03 |
) |
|
$ |
(0.12 |
) |
|
Unaudited EBITDA and Adjusted EBITDA(Amounts in
thousands)
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
2019 |
|
2018 |
|
2019 |
Reconciliation of
Adjusted EBITDA to net income (loss): |
|
|
|
|
|
Net income (loss) |
$ |
(268,497 |
) |
|
$ |
27,138 |
|
|
$ |
(117,484 |
) |
Depreciation, depletion and amortization expense |
16,093 |
|
|
11,588 |
|
|
15,759 |
|
Interest expense |
11,790 |
|
|
8,012 |
|
|
11,806 |
|
Income tax expense (benefit) |
(81,982 |
) |
|
— |
|
|
116,407 |
|
EBITDA |
(322,596 |
) |
|
46,738 |
|
|
26,488 |
|
Non-cash impairment of assets |
346,384 |
|
|
— |
|
|
— |
|
Change in estimated fair value of contingent consideration |
(5,181 |
) |
|
— |
|
|
(672 |
) |
Earnings from equity method investments |
(1,880 |
) |
|
(1,624 |
) |
|
(1,284 |
) |
Gain on remeasurement of equity method investment |
— |
|
|
— |
|
|
(3,612 |
) |
Loss on extinguishment of debt |
— |
|
|
6,233 |
|
|
— |
|
Non-recurring business development costs and other items (1) |
1,173 |
|
|
701 |
|
|
3,781 |
|
Adjusted EBITDA |
$ |
17,900 |
|
|
$ |
52,048 |
|
|
$ |
24,701 |
|
(1)Non-recurring business development costs and
other items for the three months ended September 30, 2019 and
June 30, 2019, are primarily associated with the Conversion,
business acquisitions and severance costs. Non-recurring
business development costs and other items for the three months
ended September 30, 2018, are primarily associated with
business development and legal costs.
|
|
|
Nine Months Ended |
|
September 30, |
|
2019 |
|
2018 |
Reconciliation of
Adjusted EBITDA to net income (loss): |
|
|
|
Net income (loss) |
$ |
(392,188 |
) |
|
$ |
147,525 |
|
Depreciation, depletion and amortization expense |
44,800 |
|
|
30,930 |
|
Interest expense |
34,186 |
|
|
15,207 |
|
Income tax expense |
34,425 |
|
|
— |
|
EBITDA |
(278,777 |
) |
|
193,662 |
|
Non-cash impairment of assets |
346,384 |
|
|
— |
|
Change in estimated fair value of contingent consideration |
(5,853 |
) |
|
— |
|
Earnings from equity method investments |
(4,280 |
) |
|
(3,934 |
) |
Gain on remeasurement of equity method investment |
(3,612 |
) |
|
— |
|
Loss on extinguishment of debt |
— |
|
|
6,233 |
|
Non-recurring business development costs and other items (1) |
6,313 |
|
|
1,785 |
|
Adjusted EBITDA |
$ |
60,175 |
|
|
$ |
197,746 |
|
(1)Non-recurring business development costs and
other items for the nine months ended September 30, 2019, are
primarily associated with the Conversion, business acquisitions and
severance costs. Non-recurring business development costs and
other items for the nine months ended September 30, 2018, are
primarily associated with lease termination fees and expenses
associated with the relocation of our corporate offices, following
displacement from Hurricane Harvey and business development
and legal costs.
Unaudited Condensed Consolidated Cash Flow
Information(Amounts in thousands)
|
Nine Months Ended |
|
September 30, |
|
2019 |
|
2018 (1) |
Operating activities |
$ |
12,098 |
|
|
$ |
195,332 |
|
Investing activities |
(69,385 |
) |
|
(109,183 |
) |
Financing activities |
(8,623 |
) |
|
87,132 |
|
Effects of exchange rate on
cash |
6 |
|
|
— |
|
Net change in cash |
$ |
(65,904 |
) |
|
$ |
173,281 |
|
(1)Financial information has been recast to include the results
attributable to the sponsor and general partner.
Unaudited Free Cash Flow(Amounts in
thousands)
The following table presents a reconciliation of
free cash flow to the most directly comparable GAAP financial
measure, as applicable, for each of the periods indicated:
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2019 |
|
September 30, 2019 |
Net cash provided by operating activities |
$ |
3,123 |
|
|
$ |
12,098 |
|
Less: Maintenance capital expenditures |
(3,328 |
) |
|
(11,051 |
) |
Less: Growth capital expenditures (1) |
(4,893 |
) |
|
(24,060 |
) |
Free cash flow |
$ |
(5,098 |
) |
|
$ |
(23,013 |
) |
(1)We have excluded growth capital expenditures
of $174 and $31,219 spent during the three and nine months ended
September 30, 2019, respectively, related to construction
projects associated with completion of our second Kermit facility
and expansion at our Wyeville facility, both of which were
fully-funded in 2018. All other growth capital expenditures
related to investments in our logistics and wellsite operations are
included in the above.
Unaudited Per Ton Operating Activity(Amounts in
thousands, except tons and per ton amounts)
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
2019 |
|
2018 |
|
2019 |
Sand sold |
2,685,736 |
|
|
2,775,360 |
|
|
2,662,086 |
|
Contribution margin |
$ |
29,512 |
|
|
$ |
66,389 |
|
|
$ |
36,729 |
|
Contribution margin per ton
sold |
$ |
10.99 |
|
|
$ |
23.92 |
|
|
$ |
13.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
September 30, |
|
2019 |
|
2018 |
Sand sold |
7,759,084 |
|
|
8,430,491 |
|
Contribution margin |
$ |
95,629 |
|
|
$ |
236,508 |
|
Contribution margin per ton
sold |
$ |
12.32 |
|
|
$ |
28.05 |
|
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