Southlake, Texas
- August 8, 2016 - Emerge Energy Services LP ("Emerge
Energy") today announced second quarter 2016 financial and
operating results.
Highlights
-
Net Loss of $(22.9) million and Adjusted EBITDA
of $(10.7) million for the three months ended June 30,
2016.
-
Full quarter sales of 399,000 tons of
sand.
-
Entered into a Purchase and Sale Agreement for
our Fuel business.
Overview
Emerge Energy reported net loss of
$(22.9) million, or $(0.95) per diluted unit, for the three months
ended June 30, 2016. For that same period, Emerge Energy
reported Adjusted EBITDA of $(10.7) million and Distributable Cash
Flow of $(17.3) million. Net income, net income per unit and
Adjusted EBITDA for the three months ended June 30, 2015, were
$2.9 million, $0.12 per diluted unit and $17.0 million,
respectively. Adjusted EBITDA and Distributable Cash Flow are
non-GAAP financial measures that Emerge Energy uses to assess its
performance on an ongoing basis.
As previously announced, we
entered into a Purchase and Sale Agreement (the "Purchase
Agreement") with Susser Petroleum Operating Company LLC and Sunoco
LP, (together, "Sunoco") on June 23, 2016. Pursuant to the
terms of the Purchase Agreement, we agreed to sell to Sunoco all of
the issued and outstanding limited liability company interests in
our fuel segment. In consideration for the sale of the
Companies, Sunoco will pay us a purchase price of approximately
$178.5 million in cash, subject to certain working capital and
other adjustments in accordance with the terms of the Purchase
Agreement. We expect to close this transaction during the
third quarter of 2016.
Accordingly, 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. Net
loss and net loss per diluted unit for continuing operations for
the three months ended June 30, 2016 were $(28.2) million and
$(1.17) per diluted unit, respectively, compared to net income and
net income per diluted unit for continuing operations for the three
months ended June 30, 2015 of $0.7 million and $0.03 per
diluted unit, respectively.
Emerge Energy will not make a cash
distribution on its common units for the three months ended
June 30, 2016. Emerge Energy did not generate available
cash to distribute for the three months ended June 30, 2016
due to the challenging oil and natural gas frac sand market during
this period. In addition, Emerge Energy is restricted from
making distributions to its common unitholders until certain
financial covenants are met under its amended credit agreement.
"The oil and gas markets presented
further industry difficulties during the second quarter," said Ted
W. Beneski, Chairman of the Board of Directors of the general
partner of Emerge Energy. "However, we made considerable
progress on our strategic plan to improve our competitive
positioning during the quarter. We announced our Fuel
business divestiture in June, and upon close, this transaction will
significantly deleverage our balance sheet. We also continued
to lower our cost structure and develop our technology-driven
proppant products. Finally, we are pleased to announce a $20
million private placement equity offering, which will help
strengthen our balance sheet and improve our liquidity."
Conference Call
Emerge Energy will host its 2016
second quarter results conference call later today, Monday, August
8, 2016, at 9:00 a.m. CST. Callers may listen to the live
presentation, which will be followed by a question and answer
segment, by dialing (855) 850-4275 or (720) 634-2898 and entering
pass code 59351877. An audio webcast of the call will be
available at www.emergelp.com within the Investor Relations portion
of the website under the Webcasts & Presentations
section. A replay will be available by audio webcast and
teleconference for seven days following the conclusion of the
call. The replay teleconference will be available by dialing
(855) 859-2056 or (404) 537-3406 and the reservation number
59351877.
Operating Results
The following table summarizes
Emerge Energy's unaudited consolidated operating results for the
three months ended June 30, 2016, March 31, 2016 and June 30,
2015.
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2016 |
|
March 31, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
Revenues |
$ |
24,825 |
|
|
$ |
29,670 |
|
|
$ |
68,118 |
|
|
$ |
54,495 |
|
|
$ |
164,362 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold (excluding depreciation, depletion and
amortization) |
38,354 |
|
|
43,790 |
|
|
50,738 |
|
|
82,144 |
|
|
116,993 |
|
|
Depreciation, depletion and amortization |
4,870 |
|
|
4,907 |
|
|
4,721 |
|
|
9,777 |
|
|
8,522 |
|
|
Selling, general and administrative expenses |
4,459 |
|
|
6,775 |
|
|
6,872 |
|
|
11,234 |
|
|
14,589 |
|
|
Contract and project terminations |
10 |
|
|
4,026 |
|
|
2,693 |
|
|
4,036 |
|
|
9,412 |
|
|
Total
operating expenses |
47,693 |
|
|
59,498 |
|
|
65,024 |
|
|
107,191 |
|
|
149,516 |
|
|
Operating income (loss) |
(22,868 |
) |
|
(29,828 |
) |
|
3,094 |
|
|
(52,696 |
) |
|
14,846 |
|
|
Other
expense (income) |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
5,283 |
|
|
4,594 |
|
|
2,328 |
|
|
9,877 |
|
|
5,165 |
|
|
Other |
(2 |
) |
|
(1 |
) |
|
(8 |
) |
|
(3 |
) |
|
(29 |
) |
|
Total
other expense |
5,281 |
|
|
4,593 |
|
|
2,320 |
|
|
9,874 |
|
|
5,136 |
|
|
Income
(loss) from continuing operations before provision for income
taxes |
(28,149 |
) |
|
(34,421 |
) |
|
774 |
|
|
(62,570 |
) |
|
9,710 |
|
|
Provision for income taxes |
1 |
|
|
20 |
|
|
87 |
|
|
21 |
|
|
268 |
|
|
Net
income (loss) from continuing operations |
(28,150 |
) |
|
(34,441 |
) |
|
687 |
|
|
(62,591 |
) |
|
9,442 |
|
|
Income
from discontinued operations, net of taxes |
5,253 |
|
|
226 |
|
|
2,197 |
|
|
5,479 |
|
|
2,933 |
|
|
Net
income (loss) |
$ |
(22,897 |
) |
|
$ |
(34,215 |
) |
|
$ |
2,884 |
|
|
$ |
(57,112 |
) |
|
$ |
12,375 |
|
|
Adjusted EBITDA (a) |
$ |
(10,683 |
) |
|
$ |
(9,513 |
) |
|
$ |
16,968 |
|
|
$ |
(20,196 |
) |
|
$ |
45,382 |
|
|
(a) See section entitled
"Adjusted EBITDA and Distributable Cash Flow" that includes a
definition of Adjusted EBITDA and provides reconciliation to GAAP
net income.
Continuing operations
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2016 |
|
March 31, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
Revenues |
$ |
24,825 |
|
|
$ |
29,670 |
|
|
$ |
68,118 |
|
|
$ |
54,495 |
|
|
$ |
164,362 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold (excluding depreciation, depletion and
amortization) |
38,354 |
|
|
43,790 |
|
|
50,738 |
|
|
82,144 |
|
|
116,993 |
|
|
Depreciation, depletion and amortization |
4,870 |
|
|
4,907 |
|
|
4,721 |
|
|
9,777 |
|
|
8,522 |
|
|
Selling, general and administrative expenses |
4,459 |
|
|
6,775 |
|
|
6,872 |
|
|
11,234 |
|
|
14,589 |
|
|
Contract and project terminations |
10 |
|
|
4,026 |
|
|
2,693 |
|
|
4,036 |
|
|
9,412 |
|
|
Operating income (loss) |
$ |
(22,868 |
) |
|
$ |
(29,828 |
) |
|
$ |
3,094 |
|
|
$ |
(52,696 |
) |
|
$ |
14,846 |
|
|
Adjusted EBITDA (a) |
$ |
(17,631 |
) |
|
$ |
(12,982 |
) |
|
$ |
11,591 |
|
|
$ |
(30,613 |
) |
|
$ |
35,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
of sand sold (tons in thousands) |
399 |
|
|
439 |
|
|
861 |
|
|
838 |
|
|
2,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
of sand produced (tons in thousands): |
|
|
|
|
|
|
|
|
|
|
Arland, Wisconsin facility |
- |
|
|
- |
|
|
248 |
|
|
- |
|
|
653 |
|
|
Barron, Wisconsin facility |
391 |
|
|
320 |
|
|
353 |
|
|
711 |
|
|
850 |
|
|
New
Auburn, Wisconsin facility |
11 |
|
|
169 |
|
|
178 |
|
|
180 |
|
|
483 |
|
|
Kosse,
Texas facility |
26 |
|
|
17 |
|
|
59 |
|
|
43 |
|
|
129 |
|
|
Total
volume of sand produced |
428 |
|
|
506 |
|
|
838 |
|
|
934 |
|
|
2,115 |
|
|
(a) See section entitled
"Adjusted EBITDA and Distributable Cash Flow" that includes a
definition of Adjusted EBITDA and provides reconciliation to GAAP
net income.
Operating results improved for the
quarter ended June 30, 2016, compared to the quarter ended
March 31, 2016. This decrease in loss was primarily due
to a $5.4 million write down of sand inventory and $4.0 million
contract termination charges related to railcar lease negotiations
in the first quarter of 2016, offset by a $1.2 million charge for
volume commitment shortfalls at one of our transload sites during
the second quarter of 2016. We also recorded $1.7 million of
bad debt expense in the quarter ended March 31, 2016.
Operating income for continuing operations decreased for the second
quarter of 2016, compared to same quarter in 2015 mainly due to the
decrease in total sand sales at all company facilities, lower
realized pricing for FOB plant sales and in-basin sales, and higher
logistics costs.
Adjusted EBITDA for continuing
operations decreased for the quarter ended June 30, 2016,
compared to the quarter ended March 31, 2016. This
decrease in Adjusted EBITDA was due to the decrease in total sand
sales at all company facilities and a $1.2 million charge for
volume commitment shortfalls at one of our transload sites.
Adjusted EBITDA for continuing operations decreased in the second
quarter of 2016, compared to same quarter in 2015 mainly due to the
decrease in total sand sales at all company facilities, lower
realized pricing for FOB plant sales and in-basin sales, and higher
logistics costs.
During the first six months of
2016, we negotiated significant concessions on the majority of our
railcar leases, including:
·
cancellation or deferral of deliveries on a total of 4,855 rail
cars;
· cash
payment reductions on a substantial portion of the existing rail
cars in our fleet; and
· cash
payment reductions on several of our transload facilities.
In return for these concessions, we have:
·
issued a total of $12 million of unsecured notes with interest
payable in-kind until certain financial metrics have been met;
·
issued warrants to purchase a total of 370,000 of our common units;
and
·
extended the maturity of various of our leases with partners who
have worked to support us.
Discontinued operations
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2016 |
|
March 31, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
Revenues |
$ |
101,982 |
|
|
$ |
80,481 |
|
|
$ |
132,734 |
|
|
$ |
182,463 |
|
|
$ |
240,451 |
|
|
Cost
of goods sold (excluding depreciation, depletion and
amortization) |
93,844 |
|
|
75,700 |
|
|
126,195 |
|
|
169,544 |
|
|
228,270 |
|
|
Depreciation and amortization |
- |
|
|
2,354 |
|
|
2,634 |
|
|
2,354 |
|
|
5,273 |
|
|
Selling, general and administrative expenses |
2,194 |
|
|
1,598 |
|
|
1,307 |
|
|
3,792 |
|
|
3,193 |
|
|
Interest expense, net |
686 |
|
|
597 |
|
|
302 |
|
|
1,283 |
|
|
590 |
|
|
Other |
- |
|
|
- |
|
|
(5 |
) |
|
- |
|
|
(9 |
) |
|
Income
from discontinued operations before provision for income taxes |
5,258 |
|
|
232 |
|
|
2,301 |
|
|
5,490 |
|
|
3,134 |
|
|
Provision for income taxes |
5 |
|
|
6 |
|
|
104 |
|
|
11 |
|
|
201 |
|
|
Income
from discontinued operations, net of taxes |
$ |
5,253 |
|
|
$ |
226 |
|
|
$ |
2,197 |
|
|
$ |
5,479 |
|
|
$ |
2,933 |
|
|
Adjusted EBITDA (a) |
$ |
6,948 |
|
|
$ |
3,469 |
|
|
$ |
5,377 |
|
|
$ |
10,417 |
|
|
$ |
9,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
of refined fuels sold (gallons in thousands) |
61,549 |
|
|
62,222 |
|
|
63,402 |
|
|
123,771 |
|
|
119,797 |
|
|
Volume
of terminal throughput (gallons in thousands) |
39,874 |
|
|
17,550 |
|
|
43,331 |
|
|
57,424 |
|
|
82,562 |
|
|
Volume
of transmix refined (gallons in thousands) |
24,936 |
|
|
24,448 |
|
|
25,245 |
|
|
49,384 |
|
|
46,599 |
|
|
Refined transmix as a percent of total refined fuels sold |
40.5 |
% |
|
39.3 |
% |
|
39.8 |
% |
|
39.9 |
% |
|
38.9 |
% |
|
(a) See section entitled
"Adjusted EBITDA and Distributable Cash Flow" that includes a
definition of Adjusted EBITDA and provides reconciliation to GAAP
net income.
Discontinued operations comprises
what we previously classified as our fuel segment along with
certain allocated corporate costs such as interest, taxes and
equity-based compensation. Income and Adjusted EBITDA from
discontinued operations increased in the quarter ended
June 30, 2016, compared to March 31, 2016, mainly due to
higher fuel prices and increase in the average margin for
fuel. Income and Adjusted EBITDA also increased for the
second quarter 2016, compared to the same quarter in 2015.
This increase was mainly due to increase in the average margin for
fuel.
Capital Expenditures
For the three months ended
June 30, 2016, Emerge Energy's capital expenditures totaled
$6.1 million. This includes approximately $264,000 of
maintenance capital expenditures.
About Emerge Energy Services
LP
Emerge Energy Services LP (NYSE:
EMES) is a growth-oriented limited partnership engaged in the
businesses of mining, producing, and distributing silica sand, a
key input for the hydraulic fracturing of oil and natural gas
wells. Emerge Energy also processes transmix, distributes
refined motor fuels, operates bulk motor fuel storage terminals,
and provides complementary fuel services. Emerge Energy
operates its sand business through its subsidiary Superior Silica
Sands LLC and its fuel division through its subsidiaries Direct
Fuels LLC and Allied Energy Company LLC.
Forward-Looking
Statements
This release contains certain
statements that are "forward-looking statements." These statements
can be identified by the use of forward-looking terminology
including "may," "believe," "will," "expect," "anticipate," or
"estimate." These forward-looking statements involve risks and
uncertainties, and there can be no assurance that actual results
will not differ materially from those expected by management of
Emerge Energy Services LP. When considering these
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in Emerge Energy's Annual
Report on Form 10-K filed with the SEC. The risk factors and
other factors noted in the Annual Report could cause actual results
to differ materially from those contained in any forward-looking
statement. Except as required by law, Emerge Energy Services
LP does not undertake any obligation to update or revise such
forward-looking statements to reflect events or circumstances that
occur after the date hereof.
PRESS CONTACT
Investor Relations
(817) 865-5830
EMERGE ENERGY
SERVICES LP
CONSOLIDATED STATEMENTS OF
OPERATIONS
($ in thousands except per unit data)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Revenues |
$ |
24,825 |
|
|
$ |
68,118 |
|
|
$ |
54,495 |
|
|
$ |
164,362 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Cost
of goods sold (excluding depreciation, depletion and
amortization) |
38,354 |
|
|
50,738 |
|
|
82,144 |
|
|
116,993 |
|
|
Depreciation, depletion and amortization |
4,870 |
|
|
4,721 |
|
|
9,777 |
|
|
8,522 |
|
|
Selling, general and administrative expenses |
4,459 |
|
|
6,872 |
|
|
11,234 |
|
|
14,589 |
|
|
Contract and project terminations |
10 |
|
|
2,693 |
|
|
4,036 |
|
|
9,412 |
|
|
Total
operating expenses |
47,693 |
|
|
65,024 |
|
|
107,191 |
|
|
149,516 |
|
|
Operating income (loss) |
(22,868 |
) |
|
3,094 |
|
|
(52,696 |
) |
|
14,846 |
|
|
|
|
|
|
|
|
|
|
|
Other
expense (income): |
|
|
|
|
|
|
|
|
Interest expense, net |
5,283 |
|
|
2,328 |
|
|
9,877 |
|
|
5,165 |
|
|
Other |
(2 |
) |
|
(8 |
) |
|
(3 |
) |
|
(29 |
) |
|
Total
other expense |
5,281 |
|
|
2,320 |
|
|
9,874 |
|
|
5,136 |
|
|
Income
(loss) from continuing operations before provision for income
taxes |
(28,149 |
) |
|
774 |
|
|
(62,570 |
) |
|
9,710 |
|
|
Provision for income taxes |
1 |
|
|
87 |
|
|
21 |
|
|
268 |
|
|
Net
income (loss) from continuing operations |
(28,150 |
) |
|
687 |
|
|
(62,591 |
) |
|
9,442 |
|
|
Income
from discontinued operations, net of taxes |
5,253 |
|
|
2,197 |
|
|
5,479 |
|
|
2,933 |
|
|
Net
income (loss) |
$ |
(22,897 |
) |
|
$ |
2,884 |
|
|
$ |
(57,112 |
) |
|
$ |
12,375 |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common unit |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Earnings (loss) per common unit from continuing operations |
$ |
(1.17 |
) |
|
$ |
0.03 |
|
|
$ |
(2.59 |
) |
|
$ |
0.39 |
|
|
Earnings (loss) per common unit from discontinued operations |
0.22 |
|
|
0.09 |
|
|
0.23 |
|
|
0.12 |
|
|
Basic
earnings (loss) per common unit |
$ |
(0.95 |
) |
|
$ |
0.12 |
|
|
$ |
(2.36 |
) |
|
$ |
0.51 |
|
|
Diluted: |
|
|
|
|
|
|
|
|
Earnings (loss) per common unit from continuing operations |
$ |
(1.17 |
) |
|
$ |
0.03 |
|
|
$ |
(2.59 |
) |
|
$ |
0.39 |
|
|
Earnings (loss) per common unit from discontinued operations |
0.22 |
|
|
0.09 |
|
|
0.23 |
|
|
0.12 |
|
|
Diluted earnings (loss) per common unit |
$ |
(0.95 |
) |
|
$ |
0.12 |
|
|
$ |
(2.36 |
) |
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common units outstanding including
participating securities (basic) |
24,188,605 |
|
|
24,131,302 |
|
|
24,184,838 |
|
|
24,129,664 |
|
|
Weighted average number of common units outstanding (diluted) |
24,188,605 |
|
|
24,133,813 |
|
|
24,184,838 |
|
|
24,131,682 |
|
|
Adjusted EBITDA and Distributable
Cash Flow
Adjusted EBITDA is defined in our
revolving 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. The following tables
reconcile net income (loss) to Adjusted EBITDA for the three months
ended June 30, 2016, March 31, 2016 and June 30, 2015.
|
Three Months Ended June 30, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing |
|
Discontinued |
|
Consolidated (a)
|
|
|
|
|
|
|
|
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
$ |
(28,150 |
) |
|
$ |
687 |
|
|
$ |
5,253 |
|
|
$ |
2,197 |
|
|
$ |
(22,897 |
) |
|
$ |
2,884 |
|
|
|
|
|
Interest expense, net |
5,283 |
|
|
2,328 |
|
|
686 |
|
|
302 |
|
|
5,969 |
|
|
2,630 |
|
|
|
|
|
Depreciation, depletion and amortization |
4,870 |
|
|
4,721 |
|
|
- |
|
|
2,634 |
|
|
4,870 |
|
|
7,355 |
|
|
|
|
|
Provision for income taxes |
1 |
|
|
87 |
|
|
5 |
|
|
104 |
|
|
6 |
|
|
191 |
|
|
|
|
|
EBITDA |
(17,996 |
) |
|
7,823 |
|
|
5,944 |
|
|
5,237 |
|
|
(12,052 |
) |
|
13,060 |
|
|
|
|
|
Equity-based compensation expense |
(335 |
) |
|
832 |
|
|
131 |
|
|
103 |
|
|
(204 |
) |
|
935 |
|
|
|
|
|
Write
down of sand inventory |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
Contract and project terminations |
10 |
|
|
2,693 |
|
|
- |
|
|
- |
|
|
10 |
|
|
2,693 |
|
|
|
|
|
Provision for doubtful accounts |
- |
|
|
221 |
|
|
38 |
|
|
37 |
|
|
38 |
|
|
258 |
|
|
|
|
|
Accretion expense |
30 |
|
|
20 |
|
|
- |
|
|
- |
|
|
30 |
|
|
20 |
|
|
|
|
|
Retirement of assets |
- |
|
|
- |
|
|
67 |
|
|
- |
|
|
67 |
|
|
- |
|
|
|
|
|
Reduction in force |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
Fuel
division selling expenses |
- |
|
|
- |
|
|
679 |
|
|
- |
|
|
679 |
|
|
- |
|
|
|
|
|
Other
state and local taxes |
483 |
|
|
- |
|
|
89 |
|
|
- |
|
|
572 |
|
|
- |
|
|
|
|
|
Non-cash deferred lease expense |
4 |
|
|
- |
|
|
- |
|
|
- |
|
|
4 |
|
|
- |
|
|
|
|
|
Other
adjustments allowable under our existing credit agreement |
173 |
|
|
2 |
|
|
- |
|
|
- |
|
|
173 |
|
|
2 |
|
|
|
|
|
Adjusted EBITDA |
$ |
(17,631 |
) |
|
$ |
11,591 |
|
|
$ |
6,948 |
|
|
$ |
5,377 |
|
|
$ |
(10,683 |
) |
|
$ |
16,968 |
|
|
|
|
|
|
|
Three Months ended March 31, |
|
|
|
|
2016 |
|
2016 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing |
|
Discontinued |
|
Consolidated (a) |
|
|
|
|
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
|
$ |
(34,441 |
) |
|
$ |
226 |
|
|
$ |
(34,215 |
) |
|
Interest expense, net |
|
|
4,594 |
|
|
597 |
|
|
5,191 |
|
|
Depreciation, depletion and amortization |
|
|
4,907 |
|
|
2,354 |
|
|
7,261 |
|
|
Provision for income taxes |
|
|
20 |
|
|
6 |
|
|
26 |
|
|
EBITDA |
|
|
(24,920 |
) |
|
3,183 |
|
|
(21,737 |
) |
|
Equity-based compensation expense |
|
|
237 |
|
|
103 |
|
|
340 |
|
|
Write
down of sand inventory |
|
|
5,394 |
|
|
- |
|
|
5,394 |
|
|
Contract and project terminations |
|
|
4,026 |
|
|
- |
|
|
4,026 |
|
|
Provision for doubtful accounts |
|
|
1,672 |
|
|
36 |
|
|
1,708 |
|
|
Accretion expense |
|
|
29 |
|
|
- |
|
|
29 |
|
|
Retirement of assets |
|
|
- |
|
|
- |
|
|
- |
|
|
Reduction in force |
|
|
76 |
|
|
- |
|
|
76 |
|
|
Fuel
division selling expenses |
|
|
- |
|
|
- |
|
|
- |
|
|
Other
state and local taxes |
|
|
469 |
|
|
147 |
|
|
616 |
|
|
Non-cash deferred lease expense |
|
|
- |
|
|
- |
|
|
- |
|
|
Other
adjustments allowable under our existing credit agreement |
|
|
35 |
|
|
- |
|
|
35 |
|
|
Adjusted EBITDA |
|
|
$ |
(12,982 |
) |
|
$ |
3,469 |
|
|
$ |
(9,513 |
) |
|
The following tables reconcile net
income (loss) to Adjusted EBITDA for the six months ended June 30,
2016 and 2015.
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing |
|
Discontinued |
|
Consolidated (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
Net
income (loss) |
$ |
(62,591 |
) |
|
$ |
9,442 |
|
|
$ |
5,479 |
|
|
$ |
2,933 |
|
|
$ |
(57,112 |
) |
|
$ |
12,375 |
|
|
Interest expense, net |
9,877 |
|
|
5,165 |
|
|
1,283 |
|
|
590 |
|
|
11,160 |
|
|
5,755 |
|
|
Depreciation, depletion and amortization |
9,777 |
|
|
8,522 |
|
|
2,354 |
|
|
5,273 |
|
|
12,131 |
|
|
13,795 |
|
|
Provision for income taxes |
21 |
|
|
268 |
|
|
11 |
|
|
201 |
|
|
32 |
|
|
469 |
|
|
EBITDA |
(42,916 |
) |
|
23,397 |
|
|
9,127 |
|
|
8,997 |
|
|
(33,789 |
) |
|
32,394 |
|
|
Equity-based compensation expense |
(98 |
) |
|
2,838 |
|
|
234 |
|
|
389 |
|
|
136 |
|
|
3,227 |
|
|
Write
down of sand inventory |
5,394 |
|
|
- |
|
|
- |
|
|
- |
|
|
5,394 |
|
|
- |
|
|
Contract and project terminations |
4,036 |
|
|
9,412 |
|
|
- |
|
|
- |
|
|
4,036 |
|
|
9,412 |
|
|
Provision for doubtful accounts |
1,672 |
|
|
221 |
|
|
74 |
|
|
75 |
|
|
1,746 |
|
|
296 |
|
|
Accretion expense |
59 |
|
|
39 |
|
|
- |
|
|
- |
|
|
59 |
|
|
39 |
|
|
Retirement of assets |
- |
|
|
- |
|
|
67 |
|
|
8 |
|
|
67 |
|
|
8 |
|
|
Reduction in force |
76 |
|
|
- |
|
|
- |
|
|
- |
|
|
76 |
|
|
- |
|
|
Fuel
division selling expenses |
- |
|
|
- |
|
|
679 |
|
|
- |
|
|
679 |
|
|
- |
|
|
Other
state and local taxes |
952 |
|
|
- |
|
|
236 |
|
|
- |
|
|
1,188 |
|
|
- |
|
|
Non-cash deferred lease expense |
4 |
|
|
- |
|
|
- |
|
|
- |
|
|
4 |
|
|
- |
|
|
Other
adjustments allowable under our existing credit agreement |
208 |
|
|
6 |
|
|
- |
|
|
- |
|
|
208 |
|
|
6 |
|
|
Adjusted EBITDA |
$ |
(30,613 |
) |
|
$ |
35,913 |
|
|
$ |
10,417 |
|
|
$ |
9,469 |
|
|
$ |
(20,196 |
) |
|
$ |
45,382 |
|
|
(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 months
ended June 30, 2016, March 31, 2016 and June 30, 2015 and six
months ended June 30, 2016 and 2015:
|
Three Months Ended, |
|
Six Months Ended June 30, |
|
|
June 30, 2016 |
|
March 31, 2016 |
|
June 30, 2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
Adjusted EBITDA |
$ |
(10,683 |
) |
|
$ |
(9,513 |
) |
|
$ |
16,968 |
|
|
$ |
(20,196 |
) |
|
$ |
45,382 |
|
|
Interest expense, net |
(4,347 |
) |
|
(4,642 |
) |
|
(2,334 |
) |
|
(8,989 |
) |
|
(4,809 |
) |
|
Income
tax expense |
(578 |
) |
|
(642 |
) |
|
(191 |
) |
|
(1,220 |
) |
|
(469 |
) |
|
Contract and project terminations |
- |
|
|
(25 |
) |
|
(728 |
) |
|
(25 |
) |
|
(728 |
) |
|
Reduction in force |
- |
|
|
(76 |
) |
|
- |
|
|
(76 |
) |
|
- |
|
|
Write
down of sand inventory |
- |
|
|
(5,394 |
) |
|
- |
|
|
(5,394 |
) |
|
- |
|
|
Other
adjustments allowable under our existing credit agreement |
(173 |
) |
|
(35 |
) |
|
(2 |
) |
|
(208 |
) |
|
(6 |
) |
|
Fuel
division selling expenses |
(679 |
) |
|
- |
|
|
- |
|
|
(679 |
) |
|
- |
|
|
Cost
to retire assets |
9 |
|
|
- |
|
|
- |
|
|
9 |
|
|
- |
|
|
Non-cash deferred lease expense |
(4 |
) |
|
- |
|
|
- |
|
|
(4 |
) |
|
- |
|
|
Change
in other operating assets and liabilities |
5,714 |
|
|
18,036 |
|
|
(2,962 |
) |
|
23,750 |
|
|
543 |
|
|
Cash
flows from operating activities: |
$ |
(10,741 |
) |
|
$ |
(2,291 |
) |
|
$ |
10,751 |
|
|
(13,032 |
) |
|
$ |
39,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
$ |
(6,099 |
) |
|
$ |
(4,913 |
) |
|
$ |
(6,606 |
) |
|
$ |
(11,012 |
) |
|
$ |
(15,543 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities: |
$ |
8,637 |
|
|
$ |
(2,305 |
) |
|
$ |
(7,388 |
) |
|
$ |
6,332 |
|
|
$ |
(28,005 |
) |
|
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 June 30, 2016 |
|
|
|
|
|
Net income (loss) |
|
$ |
(22,897 |
) |
|
|
|
|
|
Add
(less) reconciling items: |
|
|
|
Add
depreciation, depletion and amortization expense |
|
4,870 |
|
|
Add
amortization of deferred financing costs |
|
1,041 |
|
|
Add
loss on disposal |
|
76 |
|
|
Add
provision for doubtful accounts |
|
38 |
|
|
Add
accretion expense |
|
30 |
|
|
Add
income taxes accrued, net of payments |
|
6 |
|
|
Add
non-cash deferred lease expense |
|
4 |
|
|
Less
unrealized gain on fair value of interest rate swaps |
|
(3 |
) |
|
Less
equity-based compensation, net |
|
(204 |
) |
|
Less
maintenance capital expenditures |
|
(264 |
) |
|
Distributable cash flow |
|
$ |
(17,303 |
) |
|
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX 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
HUG#2033821
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