Fort Worth, Texas
- November 1, 2017 - Emerge Energy Services LP ("Emerge
Energy") today announced third quarter 2017 financial and operating
results.
Highlights
· Net
income of $5.0 million and diluted earnings per unit of $0.16 for
the third quarter.
·
Adjusted EBITDA improved 149% or $11.2 million sequentially to
$18.7 million for the third quarter.
· Total
volumes sold increased 6.3% sequentially to 1,480 thousand tons in
the third quarter.
Overview
Emerge Energy reported net income
of $5.0 million, or $0.16 per diluted unit, for the three months
ended September 30, 2017. For the three months ended
September 30, 2016, net income was $5.1 million, or $0.21 per
diluted unit, mainly due to a $31.7 million gain on sale of the
Fuel business last year. Adjusted EBITDA was $18.7 million
for the three months ended September 30, 2017 compared to
$(8.1) million for the three months ended September 30,
2016. Emerge Energy generated Distributable Cash Flow of
$14.1 million for the three months ended September 30,
2017. Adjusted EBITDA and Distributable Cash Flow are
non-GAAP financial measures that Emerge Energy uses to assess its
performance on an ongoing basis.
Emerge Energy will not make a cash
distribution on its common units for the three months ended
September 30, 2017 as the board of directors of its general
partner did not approve a cash distribution and it is restricted
from making distributions to its common unitholders under its
amended credit agreement.
The results of operations of the
Fuel business have been classified as discontinued operations for
all periods presented and we now operate our continuing business in
a single sand segment.
"The business performed at a high
level during the third quarter, and we are proud of our many
accomplishments," noted Ted W. Beneski, Chairman of the board of
directors of the general partner of Emerge Energy. "During
the third quarter, we achieved positive net income from continuing
operations for the first quarter in over two years, and our revenue
and profitability grew substantially over the second quarter.
Pricing increased at a faster rate than we had expected three
months ago, and both our total and frac sand volumes increased by
6% in the quarter compared to the second quarter of 2017.
Total cost per ton sold also declined due to operational
improvements and higher utilization of our production and logistics
assets. As a result, net income (loss) from continuing
operations and Adjusted EBITDA increased by nearly 260% and 150%
sequentially to $5.5 million and $18.7 million, respectively, for
the third quarter. We are well on track to meet or exceed our
previously announced guidance of $40 million in Adjusted EBITDA for
2017. Additionally, we are continuing to make progress on our
debt capital raise that will refinance our revolving credit
facility and provide growth capital for the build out of our San
Antonio operation. We broke ground on construction of the
phase three expansion last week, and we remain on track to have the
expansion operational by early second quarter next year. As
we look out to the rest of 2017 and into 2018, we believe that the
business will continue to post strong results based on sustained
high demand for frac sand and continued execution of our strategic
initiatives."
Conference Call
Emerge Energy will host its 2017
third quarter results conference call on Wednesday, November 1,
2017 at 3:00 p.m. CT. Callers may listen to the live
presentation, which will be followed by a question and answer
segment, by dialing (855) 850-4275 or (720) 634-2898 and entering
pass code 93023127. An audio webcast of the call will be
available at www.emergelp.com within the Investor Relations portion
of the website under the Webcasts & Presentations
section. A replay will be available by audio webcast and
teleconference for seven days following the conclusion of the
call. The replay teleconference will be available by dialing
(855) 859-2056 or (404) 537-3406 and the reservation number
93023127.
Operating Results
The following table summarizes
Emerge Energy's consolidated operating results for the three and
nine months ended September 30, 2017 and 2016 and three months
ended June 30, 2017:
|
Three Months
Ended |
|
Nine Months
Ended September 30, |
|
|
September 30, 2017 |
|
June 30, 2017 |
|
September 30, 2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
Frac
sand revenues |
$ |
101,795 |
|
|
$ |
80,916 |
|
|
$ |
31,147 |
|
|
$ |
258,055 |
|
|
$ |
85,384 |
|
|
Non-frac sand revenues |
1,420 |
|
|
1,686 |
|
|
138 |
|
|
3,106 |
|
|
396 |
|
|
Total
revenues |
103,215 |
|
|
82,602 |
|
|
31,285 |
|
|
261,161 |
|
|
85,780 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold (excluding depreciation, depletion and
amortization) |
80,239 |
|
|
71,428 |
|
|
40,500 |
|
|
223,978 |
|
|
122,644 |
|
|
Depreciation, depletion and amortization |
6,078 |
|
|
5,675 |
|
|
4,687 |
|
|
16,409 |
|
|
14,464 |
|
|
Selling, general and administrative expenses |
7,302 |
|
|
6,850 |
|
|
4,697 |
|
|
20,030 |
|
|
15,931 |
|
|
Contract and project terminations |
- |
|
|
- |
|
|
(25 |
) |
|
- |
|
|
4,011 |
|
|
Total
operating expenses |
93,619 |
|
|
83,953 |
|
|
49,859 |
|
|
260,417 |
|
|
157,050 |
|
|
Operating income (loss) |
9,596 |
|
|
(1,351 |
) |
|
(18,574 |
) |
|
744 |
|
|
(71,270 |
) |
|
Other
expense (income) |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
5,073 |
|
|
5,082 |
|
|
8,014 |
|
|
13,353 |
|
|
17,891 |
|
|
Other |
(901 |
) |
|
(3,008 |
) |
|
3,359 |
|
|
(3,218 |
) |
|
3,356 |
|
|
Total
other expense |
4,172 |
|
|
2,074 |
|
|
11,373 |
|
|
10,135 |
|
|
21,247 |
|
|
Income
(loss) from continuing operations before provision for income
taxes |
5,424 |
|
|
(3,425 |
) |
|
(29,947 |
) |
|
(9,391 |
) |
|
(92,517 |
) |
|
Provision (benefit) for income taxes |
(58 |
) |
|
- |
|
|
8 |
|
|
(58 |
) |
|
29 |
|
|
Net
income (loss) from continuing operations |
5,482 |
|
|
(3,425 |
) |
|
(29,955 |
) |
|
(9,333 |
) |
|
(92,546 |
) |
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
Income
(loss) from discontinued operations, net of taxes |
(468 |
) |
|
(2,657 |
) |
|
3,373 |
|
|
(3,125 |
) |
|
8,852 |
|
|
Gain
on sale of discontinued operations |
- |
|
|
- |
|
|
31,699 |
|
|
- |
|
|
31,699 |
|
|
Total
income (loss) from discontinued operations, net of taxes |
(468 |
) |
|
(2,657 |
) |
|
35,072 |
|
|
(3,125 |
) |
|
40,551 |
|
|
Net
income (loss) |
$ |
5,014 |
|
|
$ |
(6,082 |
) |
|
$ |
5,117 |
|
|
$ |
(12,458 |
) |
|
$ |
(51,995 |
) |
|
Adjusted EBITDA (a) |
$ |
18,743 |
|
|
$ |
7,534 |
|
|
$ |
(8,113 |
) |
|
$ |
26,345 |
|
|
$ |
(26,706 |
) |
|
Adjusted EBITDA from continuing operations (a) |
$ |
18,743 |
|
|
$ |
7,534 |
|
|
$ |
(10,872 |
) |
|
$ |
26,345 |
|
|
$ |
(39,882 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Volume
of frac sand sold (tons in thousands) |
1,361 |
|
|
1,284 |
|
|
487 |
|
|
3,890 |
|
|
1,313 |
|
|
Volume
of non-frac sand sold (tons in thousands) |
119 |
|
|
108 |
|
|
6 |
|
|
233 |
|
|
18 |
|
|
Total
volume of sand sold (tons in thousands) |
1,480 |
|
|
1,392 |
|
|
493 |
|
|
4,123 |
|
|
1,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
of frac sand produced (tons in thousands): |
|
|
|
|
|
|
|
|
|
|
Arland, Wisconsin facility |
463 |
|
|
508 |
|
|
21 |
|
|
1,339 |
|
|
21 |
|
|
Barron, Wisconsin facility |
497 |
|
|
518 |
|
|
383 |
|
|
1,547 |
|
|
1,094 |
|
|
New
Auburn, Wisconsin facility |
346 |
|
|
302 |
|
|
10 |
|
|
965 |
|
|
190 |
|
|
Kosse,
Texas facility |
53 |
|
|
47 |
|
|
44 |
|
|
165 |
|
|
87 |
|
|
San
Antonio, Texas facility (b) |
16 |
|
|
- |
|
|
- |
|
|
16 |
|
|
- |
|
|
Total
volume of frac sand produced |
1,375 |
|
|
1,375 |
|
|
458 |
|
|
4,032 |
|
|
1,392 |
|
|
(a) See section
entitled "Adjusted EBITDA and Distributable Cash Flow" that
includes a definition of Adjusted EBITDA and provides
reconciliation to GAAP net income and cash flows.
(b) Emerge Energy
commenced frac sand production at the San Antonio facility in July
2017.
Continuing Operations
Net income (loss) improved $8.9
million and Adjusted EBITDA improved $11.2 million in the third
quarter of 2017, compared to the second quarter of 2017. This
improvement was due to an increase in total volumes sold, higher
sales prices and lower production costs on a per-ton basis.
Volumes sold through our terminals totaled 45% of volume in the
third quarter of 2017 compared to 39% in the second quarter of
2017.
Net income (loss) improved $35.4
million and Adjusted EBITDA improved $29.6 million for the third
quarter of 2017, compared to same quarter in 2016, mainly due to an
increase in total volumes sold, higher prices, and lower production
costs on a per-ton basis. This was offset by higher selling,
general and administrative expenses in 2017 due to higher
employee-related expenses for increased staffing levels and bonus
accruals.
Discontinued
Operations
Emerge Energy completed the sale
of its Fuel business on August 31, 2016 and thus did not have any
operations for the Fuel business in 2017.
During the three months ended
September 30, 2017, Emerge Energy wrote off an estimated $0.5
million of the hydrotreator escrow receivables relating to
completion delays and cost overruns.
Capital Expenditures
For the three months ended
September 30, 2017, Emerge Energy's capital expenditures
totaled $2.0 million. This includes approximately $124
thousand of maintenance capital expenditures.
About Emerge Energy Services
LP
Emerge Energy Services LP (NYSE:
EMES) is a growth-oriented limited partnership engaged in the
businesses of mining, producing, and distributing silica sand, a
key input for the hydraulic fracturing of oil and natural gas
wells. Emerge Energy operates its Sand business through its
subsidiary Superior Silica Sands LLC. Emerge Energy also
processed transmix, distributed refined motor fuels, operated bulk
motor fuel storage terminals, and provided complementary fuel
services through its fuel division which was sold on August 31,
2016.
Forward-Looking
Statements
This release contains certain
statements that are "forward-looking statements." These statements
can be identified by the use of forward-looking terminology
including "may," "believe," "will," "expect," "anticipate," or
"estimate." These forward-looking statements involve risks and
uncertainties, and there can be no assurance that actual results
will not differ materially from those expected by management of
Emerge Energy Services LP. When considering these
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in Emerge Energy's Annual
Report on Form 10-K filed with the SEC. The risk factors and
other factors noted in the Annual Report could cause actual results
to differ materially from those contained in any forward-looking
statement. Except as required by law, Emerge Energy Services
LP does not undertake any obligation to update or revise such
forward-looking statements to reflect events or circumstances that
occur after the date hereof.
PRESS CONTACT
Investor Relations
(817) 618-4020
EMERGE ENERGY
SERVICES LP
CONSOLIDATED STATEMENTS OF
OPERATIONS
($ in thousands except per unit data)
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenues |
$ |
103,215 |
|
|
$ |
31,285 |
|
|
$ |
261,161 |
|
|
$ |
85,780 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Cost
of goods sold (excluding depreciation, depletion and
amortization) |
80,239 |
|
|
40,500 |
|
|
223,978 |
|
|
122,644 |
|
|
Depreciation, depletion and amortization |
6,078 |
|
|
4,687 |
|
|
16,409 |
|
|
14,464 |
|
|
Selling, general and administrative expenses |
7,302 |
|
|
4,697 |
|
|
20,030 |
|
|
15,931 |
|
|
Contract and project terminations |
- |
|
|
(25 |
) |
|
- |
|
|
4,011 |
|
|
Total
operating expenses |
93,619 |
|
|
49,859 |
|
|
260,417 |
|
|
157,050 |
|
|
Operating income (loss) |
9,596 |
|
|
(18,574 |
) |
|
744 |
|
|
(71,270 |
) |
|
Other
expense (income): |
|
|
|
|
|
|
|
|
Interest expense, net |
5,073 |
|
|
8,014 |
|
|
13,353 |
|
|
17,891 |
|
|
Other |
(901 |
) |
|
3,359 |
|
|
(3,218 |
) |
|
3,356 |
|
|
Total
other expense |
4,172 |
|
|
11,373 |
|
|
10,135 |
|
|
21,247 |
|
|
Income
(loss) from continuing operations before provision for income
taxes |
5,424 |
|
|
(29,947 |
) |
|
(9,391 |
) |
|
(92,517 |
) |
|
Provision (benefit) for income taxes |
(58 |
) |
|
8 |
|
|
(58 |
) |
|
29 |
|
|
Net
income (loss) from continuing operations |
5,482 |
|
|
(29,955 |
) |
|
(9,333 |
) |
|
(92,546 |
) |
|
Discontinued Operations |
|
|
|
|
|
|
|
|
Income
(loss) from discontinued operations, net of taxes |
(468 |
) |
|
3,373 |
|
|
(3,125 |
) |
|
8,852 |
|
|
Gain
on sale of discontinued operations |
- |
|
|
31,699 |
|
|
- |
|
|
31,699 |
|
|
Total
income (loss) from discontinued operations, net of taxes |
(468 |
) |
|
35,072 |
|
|
(3,125 |
) |
|
40,551 |
|
|
Net
income (loss) |
$ |
5,014 |
|
|
$ |
5,117 |
|
|
$ |
(12,458 |
) |
|
$ |
(51,995 |
) |
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per unit: |
|
|
|
|
|
|
|
|
Earnings (loss) per common unit from continuing operations |
$ |
0.19 |
|
|
$ |
(1.24 |
) |
|
$ |
(0.31 |
) |
|
$ |
(3.82 |
) |
|
Earnings (loss) per common unit from discontinued operations |
(0.02 |
) |
|
1.45 |
|
|
(0.10 |
) |
|
1.67 |
|
|
Basic
earnings (loss) per common unit |
$ |
0.17 |
|
|
$ |
0.21 |
|
|
$ |
(0.41 |
) |
|
$ |
(2.15 |
) |
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per unit: |
|
|
|
|
|
|
|
|
Earnings (loss) per common unit from continuing operations |
$ |
0.18 |
|
|
$ |
(1.24 |
) |
|
$ |
(0.42 |
) |
|
$ |
(3.82 |
) |
|
Earnings (loss) per common unit from discontinued operations |
(0.02 |
) |
|
1.45 |
|
|
(0.10 |
) |
|
1.67 |
|
|
Diluted earnings (loss) per common unit |
$ |
0.16 |
|
|
$ |
0.21 |
|
|
$ |
(0.52 |
) |
|
$ |
(2.15 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common units outstanding - basic |
30,270,572 |
|
|
24,159,038 |
|
|
30,120,216 |
|
|
24,136,642 |
|
|
Weighted average number of common units outstanding - diluted |
30,400,584 |
|
|
24,159,038 |
|
|
30,183,091 |
|
|
24,136,642 |
|
|
Adjusted EBITDA and Distributable
Cash Flow
We calculate Adjusted EBITDA, a
non-GAAP measure, in accordance with our current Credit Agreement
as: net income (loss) plus consolidated interest expense (net of
interest income), income tax expense, depreciation, depletion and
amortization expense, non-cash charges and losses that are unusual
or non-recurring less income tax benefits and gains that are
unusual or non-recurring and other adjustments allowable under our
existing credit agreement. We report Adjusted EBITDA to our
lenders under our revolving credit facility in determining our
compliance with certain financial covenants. Adjusted EBITDA
should not be considered as an alternative to net income, operating
income, cash flow from operating activities or any other measure of
financial performance presented in accordance with GAAP.
Moreover, our Adjusted EBITDA as presented may not be comparable to
similarly titled measures of other companies. The following
tables reconciles net income (loss) to Adjusted EBITDA for the
three months ended September 30, 2017, June 30, 2017 and
September 30, 2016:
|
Three Months
Ended September 30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing |
|
Discontinued |
|
Consolidated
(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Net
income (loss) |
$ |
5,482 |
|
|
$ |
(29,955 |
) |
|
$ |
(468 |
) |
|
$ |
35,072 |
|
|
$ |
5,014 |
|
|
$ |
5,117 |
|
|
|
|
Interest expense, net |
5,073 |
|
|
8,014 |
|
|
- |
|
|
444 |
|
|
5,073 |
|
|
8,458 |
|
|
|
|
Depreciation, depletion and amortization |
6,078 |
|
|
4,687 |
|
|
- |
|
|
- |
|
|
6,078 |
|
|
4,687 |
|
|
|
|
Provision (benefit) for income taxes |
(58 |
) |
|
8 |
|
|
- |
|
|
8 |
|
|
(58 |
) |
|
16 |
|
|
|
|
EBITDA |
16,575 |
|
|
(17,246 |
) |
|
(468 |
) |
|
35,524 |
|
|
16,107 |
|
|
18,278 |
|
|
|
|
Equity-based compensation expense |
343 |
|
|
235 |
|
|
- |
|
|
97 |
|
|
343 |
|
|
332 |
|
|
|
|
Contract and project terminations |
- |
|
|
(25 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(25 |
) |
|
|
|
Reduction in escrow receivable |
- |
|
|
- |
|
|
468 |
|
|
- |
|
|
468 |
|
|
- |
|
|
|
|
Provision for doubtful accounts |
- |
|
|
8 |
|
|
- |
|
|
(543 |
) |
|
- |
|
|
(535 |
) |
|
|
|
Accretion expense |
25 |
|
|
30 |
|
|
- |
|
|
- |
|
|
25 |
|
|
30 |
|
|
|
|
Retirement of assets |
- |
|
|
209 |
|
|
- |
|
|
- |
|
|
- |
|
|
209 |
|
|
|
|
Fuel
division selling expenses |
- |
|
|
- |
|
|
- |
|
|
(679 |
) |
|
- |
|
|
(679 |
) |
|
|
|
Other
state and local taxes |
477 |
|
|
483 |
|
|
- |
|
|
59 |
|
|
477 |
|
|
542 |
|
|
|
|
Non-cash deferred lease expense |
2,223 |
|
|
2,072 |
|
|
- |
|
|
- |
|
|
2,223 |
|
|
2,072 |
|
|
|
|
Unrealized (gain) loss on fair value of warrant |
(900 |
) |
|
2,975 |
|
|
- |
|
|
- |
|
|
(900 |
) |
|
2,975 |
|
|
|
|
Non-capitalized cost of private placement |
- |
|
|
387 |
|
|
- |
|
|
|
|
- |
|
|
387 |
|
|
|
|
Gain
on sale of discontinued operations, net of tax |
- |
|
|
- |
|
|
- |
|
|
(31,699 |
) |
|
- |
|
|
(31,699 |
) |
|
|
|
Adjusted EBITDA |
$ |
18,743 |
|
|
$ |
(10,872 |
) |
|
$ |
- |
|
|
$ |
2,759 |
|
|
$ |
18,743 |
|
|
$ |
(8,113 |
) |
|
|
|
|
|
Three Months Ended June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing |
|
Discontinued |
|
Consolidated (a) |
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Net income (loss) |
|
$ |
(3,425 |
) |
|
$ |
(2,657 |
) |
|
$ |
(6,082 |
) |
|
Interest expense, net |
|
5,082 |
|
|
- |
|
|
5,082 |
|
|
Depreciation, depletion and amortization |
|
5,675 |
|
|
- |
|
|
5,675 |
|
|
Provision (benefit) for income taxes |
|
- |
|
|
- |
|
|
- |
|
|
EBITDA |
|
7,332 |
|
|
(2,657 |
) |
|
4,675 |
|
|
Equity-based compensation expense |
|
330 |
|
|
- |
|
|
330 |
|
|
Contract and project terminations |
|
- |
|
|
- |
|
|
- |
|
|
Reduction in escrow receivable |
|
- |
|
|
2,657 |
|
|
2,657 |
|
|
Provision for doubtful accounts |
|
- |
|
|
- |
|
|
- |
|
|
Accretion expense |
|
29 |
|
|
- |
|
|
29 |
|
|
Retirement of assets |
|
66 |
|
|
- |
|
|
66 |
|
|
Fuel division selling expenses |
|
- |
|
|
- |
|
|
- |
|
|
Other state and local taxes |
|
456 |
|
|
- |
|
|
456 |
|
|
Non-cash deferred lease expense |
|
2,329 |
|
|
- |
|
|
2,329 |
|
|
Unrealized (gain) loss on fair value of warrant |
|
(3,008 |
) |
|
- |
|
|
(3,008 |
) |
|
Non-capitalized cost of private placement |
|
- |
|
|
- |
|
|
- |
|
|
Gain on sale of discontinued operations, net of tax |
|
- |
|
|
- |
|
|
- |
|
|
Adjusted EBITDA |
|
$ |
7,534 |
|
|
$ |
- |
|
|
$ |
7,534 |
|
|
The following tables reconciles net income (loss)
to Adjusted EBITDA for the nine months ended September 30,
2017 and 2016:
|
Continuing |
|
Discontinued |
|
Consolidated (a) |
|
|
Nine Months
Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
Net
income (loss) |
$ |
(9,333 |
) |
|
$ |
(92,546 |
) |
|
$ |
(3,125 |
) |
|
$ |
40,551 |
|
|
$ |
(12,458 |
) |
|
$ |
(51,995 |
) |
|
Interest expense, net |
13,353 |
|
|
17,891 |
|
|
- |
|
|
1,727 |
|
|
13,353 |
|
|
19,618 |
|
|
Depreciation, depletion and amortization |
16,409 |
|
|
14,464 |
|
|
- |
|
|
2,354 |
|
|
16,409 |
|
|
16,818 |
|
|
Provision (benefit) for income taxes |
(58 |
) |
|
29 |
|
|
- |
|
|
19 |
|
|
(58 |
) |
|
48 |
|
|
EBITDA |
20,371 |
|
|
(60,162 |
) |
|
(3,125 |
) |
|
44,651 |
|
|
17,246 |
|
|
(15,511 |
) |
|
Equity-based compensation expense |
1,020 |
|
|
137 |
|
|
- |
|
|
331 |
|
|
1,020 |
|
|
468 |
|
|
Write-down of sand inventory |
- |
|
|
5,394 |
|
|
- |
|
|
- |
|
|
- |
|
|
5,394 |
|
|
Contract and project terminations |
- |
|
|
4,011 |
|
|
- |
|
|
- |
|
|
- |
|
|
4,011 |
|
|
Reduction in escrow receivable |
- |
|
|
- |
|
|
3,125 |
|
|
- |
|
|
3,125 |
|
|
- |
|
|
Provision for doubtful accounts |
- |
|
|
1,680 |
|
|
- |
|
|
(469 |
) |
|
- |
|
|
1,211 |
|
|
Accretion expense |
83 |
|
|
89 |
|
|
- |
|
|
- |
|
|
83 |
|
|
89 |
|
|
Retirement of assets |
60 |
|
|
209 |
|
|
- |
|
|
67 |
|
|
60 |
|
|
276 |
|
|
Reduction in force |
- |
|
|
76 |
|
|
- |
|
|
- |
|
|
- |
|
|
76 |
|
|
Fuel
division selling expenses |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Other
state and local taxes |
1,357 |
|
|
1,435 |
|
|
- |
|
|
295 |
|
|
1,357 |
|
|
1,730 |
|
|
Non-cash deferred lease expense |
6,453 |
|
|
3,679 |
|
|
- |
|
|
- |
|
|
6,453 |
|
|
3,679 |
|
|
Unrealized (gain) Loss on fair value of warrant |
(3,212 |
) |
|
2,975 |
|
|
- |
|
|
- |
|
|
(3,212 |
) |
|
2,975 |
|
|
Non-capitalized cost of private placement |
- |
|
|
387 |
|
|
- |
|
|
- |
|
|
- |
|
|
387 |
|
|
Gain
on sale of discontinued operations, net of tax |
- |
|
|
- |
|
|
- |
|
|
(31,699 |
) |
|
- |
|
|
(31,699 |
) |
|
Other
adjustments allowable under our Credit Agreement |
213 |
|
|
208 |
|
|
- |
|
|
- |
|
|
213 |
|
|
208 |
|
|
Adjusted EBITDA |
$ |
26,345 |
|
|
$ |
(39,882 |
) |
|
$ |
- |
|
|
$ |
13,176 |
|
|
$ |
26,345 |
|
|
$ |
(26,706 |
) |
|
(a) Consolidated numbers for
Interest expense, net, Provision for income taxes, Depreciation,
depletion and amortization, Equity-based compensation expense,
Provision for doubtful accounts and Loss (gain) on disposal of
assets include discontinued operations.
The following table reconciles
Consolidated Adjusted EBITDA to our operating cash flows for the
three and nine months ended September 30, 2017 and 2016, and
June 30, 2017:
|
Three Months
Ended, |
|
Nine Months
Ended September 30, |
|
September 30, 2017 |
|
June 30, 2017 |
|
September 30, 2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
18,743 |
|
|
$ |
7,534 |
|
|
$ |
(8,113 |
) |
|
$ |
26,345 |
|
|
$ |
(26,706 |
) |
|
Interest expense, net |
(4,169 |
) |
|
(3,975 |
) |
|
(4,682 |
) |
|
(10,828 |
) |
|
(13,671 |
) |
|
Income
tax expense |
(419 |
) |
|
(456 |
) |
|
(558 |
) |
|
(1,299 |
) |
|
(1,778 |
) |
|
Contract and project terminations - non-cash |
- |
|
|
- |
|
|
25 |
|
|
- |
|
|
- |
|
|
Reduction in force |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(76 |
) |
|
Write-down of sand inventory |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(5,394 |
) |
|
Other
adjustments allowable under our Credit Agreement |
- |
|
|
- |
|
|
- |
|
|
(213 |
) |
|
(208 |
) |
|
Fuel
division selling expenses |
- |
|
|
|
|
679 |
|
|
|
|
- |
|
|
Cost
to retire assets |
- |
|
|
19 |
|
|
- |
|
|
19 |
|
|
9 |
|
|
Non-cash deferred lease expense |
(2,223 |
) |
|
(2,329 |
) |
|
(2,072 |
) |
|
(6,453 |
) |
|
(3,679 |
) |
|
Change
in other operating assets and liabilities |
(18,646 |
) |
|
4,973 |
|
|
(82 |
) |
|
(21,458 |
) |
|
23,668 |
|
|
Cash
flows from operating activities: |
$ |
(6,714 |
) |
|
$ |
5,766 |
|
|
$ |
(14,803 |
) |
|
$ |
(13,887 |
) |
|
$ |
(27,835 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
$ |
(2,036 |
) |
|
$ |
(22,230 |
) |
|
$ |
152,816 |
|
|
$ |
(25,658 |
) |
|
$ |
141,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities: |
$ |
9,110 |
|
|
$ |
14,554 |
|
|
$ |
(141,166 |
) |
|
$ |
40,090 |
|
|
$ |
(134,834 |
) |
|
We define Distributable Cash Flow
generally as net income plus (i) non-cash net interest
expense, (ii) depreciation, depletion and amortization
expense, (iii) non-cash charges, and (iv) selected losses
that are unusual or non-recurring; less (v) selected principal
repayments, (vi) selected gains that are unusual or
non-recurring, and (vii) maintenance capital
expenditures. In addition, our Board of Directors utilizes
reserves for future capital expenditures, compliance with law or
debt agreements, and to provide funds for distributions to
unitholders in respect to any one or more of the next four
quarters. Distributable Cash Flow does not reflect changes in
working capital balances. The following table (in thousands)
reconciles net income to Distributable Cash Flow:
|
|
Three Months Ended September 30,
2017 |
|
|
|
|
|
Net income (loss) |
|
$ |
5,014 |
|
|
|
|
|
|
Add
(less) reconciling items: |
|
|
|
Add
depreciation, depletion and amortization expense |
|
6,078 |
|
|
Add
non-cash deferred lease expense |
|
2,223 |
|
|
Add
amortization of deferred financing costs |
|
915 |
|
|
Add
non-cash escrow write-down |
|
468 |
|
|
Add
equity-based compensation, net |
|
343 |
|
|
Add
income taxes accrued, net of payments |
|
36 |
|
|
Add
accretion expense |
|
25 |
|
|
Less
unrealized gain on fair value of interest rate swaps |
|
(11 |
) |
|
Less
maintenance capital expenditures |
|
(124 |
) |
|
Less
unrealized gain on fair value of warrants |
|
(900 |
) |
|
Distributable cash flow |
|
$ |
14,067 |
|
|
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Emerge Energy Services LP via Globenewswire
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