USD Partners LP (NYSE: USDP) (the “Partnership”) announced today
its operating and financial results for the three and twelve months
ended December 31, 2016. Highlights with respect to the fourth
quarter of 2016 include the following:
- Generated Net Cash Provided by
Operating Activities of $16.0 million, Adjusted EBITDA of $16.8
million and Distributable Cash Flow of $16.0 million
- Reported Net Income of $4.0
million
- Increased quarterly cash distribution
to $0.33 per unit ($1.32 per unit on an annualized basis)
- Ended quarter with $188.6 million of
available liquidity
“We are pleased to report another strong quarter at USD Partners
and to announce our seventh consecutive distribution increase while
delivering over 2.0x distribution coverage,” said Dan Borgen, the
Partnership’s Chief Executive Officer. “We believe that our
high-quality customer base and strategically located assets will
continue to provide an excellent foundation for future growth. As
crude oil production in Western Canada and demand for our assets
increase, we expect to grow the distribution by 5-10% in 2017.”
Fourth Quarter 2016 Operational and Financial Results
Substantially all of the Partnership’s cash flows are generated
from multi-year, take-or-pay terminal service agreements related to
the Hardisty and Casper terminals, which include minimum monthly
commitment fees. The Partnership’s customers include major
integrated oil companies, refiners and marketers, the majority of
which are investment grade rated.
The Partnership achieved significant growth during the fourth
quarter of 2016 relative to the fourth quarter of 2015. Net Cash
Provided by Operating Activities increased by 61%, while Adjusted
EBITDA and Distributable Cash Flow increased by 31% and 56%,
respectively. This growth was primarily attributable to the
Partnership’s acquisition of the Casper terminal in November 2015
and was partially offset by higher interest expense on additional
borrowings used to fund the acquisition, as well as additional
operating costs associated with managing and operating the
terminal.
Distributable Cash Flow for the fourth quarter of 2016 also
benefited from a partial tax refund with respect to 2015 of
approximately $2.3 million related to the activities of its foreign
subsidiaries. Additionally, the Partnership received the remaining
outstanding tax refund of approximately C$0.9 million in February
of 2017. The Partnership expects to pay approximately C$5.7 million
in Canadian income taxes with respect to 2017. These estimates for
income taxes are based on the Partnership’s current operations and
are subject to fluctuations in the operating results of the
Partnership’s foreign subsidiaries and the exchange rate between
the U.S. dollar and the Canadian dollar, among other factors.
Net income for the quarter decreased by 41% as compared to the
fourth quarter of 2015, primarily as a result of a non-cash
impairment loss of $3.5 million associated with the Partnership’s
San Antonio ethanol terminal.
On February 1, 2017, the Partnership declared a quarterly cash
distribution of $0.33 per unit ($1.32 per unit on an annualized
basis), which represents growth of 2.3% relative to the third
quarter of 2016 and 10.0% relative to the fourth quarter of 2015.
The distribution was paid on February 17, 2017, to unitholders of
record as of February 13, 2017.
As of December 31, 2016, the Partnership had total available
liquidity of $188.6 million, including $11.7 million of
unrestricted cash and cash equivalents and undrawn borrowing
capacity of $176.9 million on its $400.0 million senior secured
credit facility, subject to continued compliance with financial
covenants. The Partnership is in compliance with its financial
covenants and has no maturities under its senior secured credit
facility until July 2019.
Fourth Quarter 2016 Conference Call Information
The Partnership will host a conference call and webcast
regarding fourth quarter 2016 results at 11:00 a.m. Eastern Time
(10:00 a.m. Central Time) on Thursday, March 9, 2017.
To listen live over the Internet, participants are advised to
log on to the Partnership’s website at www.usdpartners.com and
select the “Events & Presentations” sub-tab under the
“Investors” tab. To join via telephone, participants may dial (877)
266-7551 domestically or +1 (339) 368-5209 internationally,
conference ID 56583920. Participants are advised to dial in at
least five minutes prior to the call.
An audio replay of the conference call will be available for
thirty days by dialing (800) 585-8367 domestically or +1 (404)
537-3406 internationally, conference ID 56583920. In addition, a
replay of the audio webcast will be available by accessing the
Partnership's website after the call is concluded.
About USD Partners LP
USD Partners LP is a fee-based, growth-oriented master limited
partnership formed in 2014 by US Development Group LLC to acquire,
develop and operate energy-related logistics assets, including rail
terminals and other high-quality and complementary midstream
infrastructure. The Partnership’s assets consist primarily of: (i)
a crude oil origination terminal in Hardisty, Alberta, Canada, with
capacity to load up to two 120-railcar unit trains per day, (ii) a
crude oil terminal in Casper, Wyoming, with unit train-capable
railcar loading capacity in excess of 100,000 barrels per day and
six customer-dedicated storage tanks with 900,000 barrels of total
capacity and (iii) two unit train-capable ethanol destination rail
terminals in San Antonio, Texas, and West Colton, California. In
addition, the Partnership provides railcar services through the
management of a railcar fleet that is committed to customers on a
long-term basis.
Non-GAAP Financial Measures
The Partnership defines Adjusted EBITDA as Net Cash Provided by
Operating Activities adjusted for changes in working capital items,
changes in restricted cash, interest, income taxes, foreign
currency transaction gains and losses, adjustments related to
deferred revenue associated with minimum monthly commitment fees
and other items which do not affect the underlying cash flows
produced by the Partnership’s businesses. Adjusted EBITDA is a
non-GAAP, supplemental financial measure used by management and
external users of the Partnership’s financial statements, such as
investors and commercial banks, to assess:
- the Partnership’s liquidity and the
ability of the Partnership’s businesses to produce sufficient cash
flows to make distributions to the Partnership’s unitholders;
and
- the Partnership’s ability to incur and
service debt and fund capital expenditures.
The Partnership defines Distributable Cash Flow, or DCF, as
Adjusted EBITDA less net cash paid for interest, income taxes and
maintenance capital expenditures. DCF does not reflect changes in
working capital balances. DCF is a non-GAAP, supplemental financial
measure used by management and by external users of the
Partnership’s financial statements, such as investors and
commercial banks, to assess:
- the amount of cash available for making
distributions to the Partnership’s unitholders;
- the excess cash being retained for use
in enhancing the Partnership’s existing businesses; and
- the sustainability of the Partnership’s
current distribution rate per unit.
The Partnership believes that the presentation of Adjusted
EBITDA and DCF in this press release provides information that
enhances an investor's understanding of the Partnership’s ability
to generate cash for payment of distributions and other purposes.
The GAAP measure most directly comparable to Adjusted EBITDA and
DCF is Net Cash Provided by Operating Activities. Adjusted EBITDA
and DCF should not be considered alternatives to Net Cash Provided
by Operating Activities or any other measure of liquidity or
performance presented in accordance with GAAP. Adjusted EBITDA and
DCF exclude some, but not all, items that affect cash from
operations and these measures may vary among other companies. As a
result, Adjusted EBITDA and DCF may not be comparable to similarly
titled measures of other companies.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws, including statements
with respect to the ability of the Partnership to grow and the
amount and timing of future distribution payments. Words and
phrases such as “is expected,” “is planned,” “believes,”
“projects,” and similar expressions are used to identify such
forward-looking statements. However, the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements relating to the Partnership are based on
management’s expectations, estimates and projections about the
Partnership, its interests and the energy industry in general on
the date this press release was issued. These statements are not
guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecast in such forward-looking statements.
Factors that could cause actual results or events to differ
materially from those described in the forward-looking statements
include those as set forth under the heading “Risk Factors” in the
Partnership’s most recent Annual Report on Form 10-K and in our
subsequent filings with the Securities and Exchange Commission. The
Partnership is under no obligation (and expressly disclaims any
such obligation) to update or alter its forward-looking statements,
whether as a result of new information, future events or
otherwise.
USD Partners LP
Consolidated Statements of Operations For the Three
Months and the Year Ended December 31, 2016 and 2015
(unaudited) For the Three Months Ended For
the Year Ended December 31, December 31,
2016 2015 2016 2015 (in thousands)
Revenues Terminalling services $ 23,454 $ 20,202 $ 93,014 $
58,841 Terminalling services — related party 1,791 1,690 6,933
5,228 Railroad incentives 15 389 76 434 Fleet leases 644 1,890
2,577 7,710 Fleet leases — related party 889 889 3,560 4,123 Fleet
services 471 155 1,084 622 Fleet services — related party 279 617
1,926 2,840 Freight and other reimbursables 1,011 241 1,955 1,880
Freight and other reimbursables — related party -
(10 ) - 85
Total revenues
28,554 26,063
111,125 81,763 Operating
costs Subcontracted rail services 2,004 1,726 8,077 7,710
Pipeline fees 5,255 5,590 20,799 17,249 Fleet leases 1,569 2,779
6,174 11,833 Freight and other reimbursables 1,011 231 1,955 1,965
Operating and maintenance 562 558 2,962 2,062 Selling, general and
administrative 2,187 2,141 9,658 7,673 Selling, general and
administrative — related party 1,399 1,341 5,768 4,707 Depreciation
and amortization 8,367 2,866
23,092 6,110
Total operating costs
22,354 17,232
78,485 59,309 Operating
income 6,200 8,831 32,640 22,454
Interest expense, net 2,549 1,458 9,837 4,368 Loss (gain)
associated with derivative instruments (781 ) (1,089 ) 140 (5,161 )
Foreign currency transaction loss (gain) (630 ) 180
(750 ) (201 )
Income before provision for
income taxes 5,062 8,282 23,413
23,448 Provision for (benefit from) income taxes
1,106 1,607 (759 ) 5,755
Net income $ 3,956 $
6,675 $ 24,172 $
17,693
USD Partners LP Consolidated Statements of Cash Flows
For the Three Months and the Year Ended December 31, 2016 and
2015 (unaudited) For the Three Months
Ended For the Year Ended December 31, December
31, 2016 2015 2016 2015 Cash
flows from operating activities: (in thousands) Net income $
3,956 $ 6,675 $ 24,172 $ 17,693 Adjustments to reconcile net income
to net cash provided by operating activities: Depreciation and
amortization 8,367 2,866 23,092 6,110 Loss (gain) associated with
derivative instruments (781 ) (1,089 ) 140 (5,161 ) Settlement of
derivative contracts 759 1,398 2,399 4,283 Amortization of deferred
financing costs 215 188 861 659 Unit based compensation expense
1,250 293 4,074 2,461 Deferred income taxes 44 (23 ) 46 814 Changes
in operating assets and liabilities, net of acquisitions: Accounts
receivable (89 ) 179 79 1,647 Accounts receivable – related party
1,683 (1,637 ) 1,750 (1,805 ) Prepaid expenses and other current
assets 3,067 2,577 30 (572 ) Accounts payable and accrued expenses
(520 ) 452 (1,897 ) (336 ) Accounts payable and accrued expenses –
related party (1,487 ) 305 (20 ) (544 ) Deferred revenue and other
liabilities (430 ) (2,515 ) 1,854 9,500 Deferred revenue – related
party (67 ) (315 ) (2,850 ) 585 Change in restricted cash 10
573 (654 ) 870 Net cash
provided by operating activities
15,977
9,927 53,076
36,204 Cash flows from investing activities:
Additions of property and equipment (3 ) (247 ) (474 ) (1,671 )
Proceeds from settlement of purchase price 381
-
381
-
Acquisitions, net of cash received
-
(210,445 )
-
(210,445 ) Purchase of derivative contracts
-
-
-
(1,167 ) Net cash provided by (used in) investing
activities
378 (210,692 )
(93 ) (213,283 ) Cash
flows from financing activities: Payments for deferred
financing costs
-
(854 )
-
(854 ) Distributions (7,722 ) (6,337 ) (29,665 ) (24,032 ) Vested
phantom units used for payment of participant taxes
-
-
(77 )
-
Proceeds from issuance of units
-
335
-
335 Proceeds from long-term debt 5,000 185,000 20,000 203,000
Repayment of long-term debt (10,725 ) (7,764 )
(41,556 ) (30,492 ) Net cash provided by (used in) financing
activities
(13,447 ) 170,380
(51,298 ) 147,957
Effect of exchange rates on cash (1,039 ) (185 )
(480 ) (627 ) Net change in cash and cash equivalents
1,869 (30,570 ) 1,205 (29,749 ) Cash and cash equivalents –
beginning of period 9,836 41,070
10,500 40,249 Cash and cash equivalents – end
of period
$ 11,705 $ 10,500
$ 11,705 $ 10,500
USD Partners LP Consolidated
Balance Sheets (unaudited) December 31,
December 31, 2016 2015 ASSETS (in
thousands) Current assets Cash and cash equivalents $ 11,705 $
10,500 Restricted cash 5,433 4,640 Accounts receivable, net 4,321
4,333 Accounts receivable — related party 219 1,889 Prepaid
expenses 10,325 10,191 Other current assets 2,562
3,908 Total current assets 34,565 35,461 Property and
equipment, net 125,702 133,010 Intangible assets, net 111,919
124,581 Goodwill 33,589 33,970 Other non-current assets 192
1,376
Total assets $
305,967 $ 328,398
LIABILITIES AND PARTNERS’ CAPITAL Current liabilities
Accounts payable and accrued expenses $ 2,221 $ 4,092 Accounts
payable and accrued expenses — related party 214 232 Deferred
revenue, current portion 26,928 22,158 Deferred revenue, current
portion — related party 4,292 5,485 Other current liabilities
3,513 2,914 Total current liabilities
37,168 34,881 Long-term debt, net 220,894 239,444 Deferred revenue,
net of current portion 264 2,022 Deferred revenue, net of current
portion — related party - 1,542 Deferred income tax liability, net
823 749
Total liabilities
259,149 278,638 Commitments and
contingencies Partners’ capital Common units 122,802 141,374 Class
A units 1,811 1,749 Subordinated units (76,749 ) (93,445 ) General
partner units 111 220 Accumulated other comprehensive loss
(1,157 ) (138 )
Total partners' capital
46,818 49,760 Total
liabilities and partners' capital $ 305,967
$ 328,398
USD Partners LP GAAP to Non-GAAP
Reconciliations For the Three Months and the Year Ended
December 31, 2016 and 2015 (unaudited) For the
Three Months Ended For the Year Ended December
31, December 31, 2016 2015 2016
2015 (in thousands)
Net cash provided by operating
activities $ 15,977 $ 9,927
$ 53,076 $ 36,204 Add (deduct):
Amortization of deferred financing costs (215 ) (188 ) (861 ) (659
) Deferred income taxes (44 ) 23 (46 ) (814 ) Changes in accounts
receivable and other assets (4,661 ) (1,119 ) (1,859 ) 730 Changes
in accounts payable and accrued expenses 2,007 (757 ) 1,917 880
Changes in deferred revenue and other liabilities 497 2,830 996
(10,085 ) Change in restricted cash (10 ) (573 ) 654 (870 )
Interest expense, net 2,549 1,458 9,837 4,368 Provision for
(benefit from) income taxes 1,106 1,607 (759 ) 5,755 Foreign
currency transaction loss (gain) (1) (630 ) 180 (750 ) (201 )
Deferred revenue associated with minimum monthly commitment fees
(2) 255 (583 ) 1,485
7,444
Adjusted EBITDA 16,831 12,805
63,690 42,752 Add (deduct): Cash received (paid) for
income taxes (3) 1,315 (1,643 ) (845 ) (3,995 ) Cash paid for
interest (2,164 ) (908 ) (8,722 ) (3,695 ) Maintenance capital
expenditures 7 - (238 ) -
Distributable cash flow $ 15,989
$ 10,254 $ 53,885
$ 35,062 (1) Represents foreign
exchange transaction gains and losses associated with activities
between the Partnership's U.S. and Canadian subsidiaries.
(2) Represents deferred revenue associated with minimum monthly
commitment fees in excess of throughput utilized, which fees are
not refundable to the Partnership's customers. Amounts presented
are net of: (a) the corresponding prepaid Gibson pipeline fee that
will be recognized as expense concurrently with the recognition of
revenue; (b) revenue recognized in the current period that was
previously deferred; and (c) expense recognized for previously
prepaid Gibson pipeline fees, which correspond with the revenue
recognized that was previously deferred. (3) Includes
amounts we received as a partial refund of approximately $3.7
million (representing Canadian $4.9 million) for our 2015 foreign
income taxes.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170308006379/en/
USD Partners LPAdam Altsuler, (281) 291-3995Vice President,
Chief Financial Officeraaltsuler@usdg.comorAshley Means, (281)
291-3965Director, Finance & Investor
Relationsameans@usdg.com
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