JP Energy Partners LP (NYSE: JPEP) (“JP Energy”, “we,” “our,” or
“us”) today announced first quarter 2015 financial and operating
results.
JP Energy reported Adjusted EBITDA of $15.2 million for the
first quarter of 2015, compared to $8.5 million for the first
quarter of 2014 and reported net income of $0.7 million for the
first quarter of 2015, compared to a net loss of $8.6 million for
the first quarter of 2014. Distributable Cash Flow was $13.3
million for the first quarter of 2015, resulting in a distribution
coverage ratio for the quarter of 1.11x.
“We had a great first quarter and we are on track to meet our
full year guidance,” said J. Patrick Barley, Executive Chairman and
Chief Executive Officer of JP Energy. “Our first quarter
performance demonstrated the diversity of our operating platform as
our NGL business benefited from the lower commodity price
environment, and even though rig counts fell significantly across
all of the major shale plays due to lower crude oil prices, we
still experienced increased volumes through our crude oil gathering
platform. In addition, we also announced three expansions in the
first four months of this year; two organic opportunities to expand
and improve our Silver Dollar pipeline and an accretive acquisition
in the NGL segment. We will continue to execute our business
strategy and we look forward to building on the success of the
first quarter.”
Review of Segment Performance
NGL Distribution and Sales – Adjusted EBITDA for the NGL
Distribution and Sales segment was $12.1 million for the first
quarter of 2015, compared to $5.3 million for the first quarter of
2014. The increase was primarily due to a $6.9 million increase in
adjusted gross margin as a result of an increase in sales volumes
from the expansion of our customer base as well as an increase in
the average sales margin of NGL and refined products from more
favorable market conditions.
Crude Oil Pipelines and Storage – Adjusted EBITDA for the Crude
Oil Pipelines and Storage segment was $5.5 million for the first
quarter of 2015, compared to $5.0 million for the first quarter of
2014. The increase was primarily due to a $0.6 million increase in
adjusted gross margin as a result of significantly increased
volumes from the expansion of the Silver Dollar Pipeline System in
the fourth quarter of 2014.
Crude Oil Supply and Logistics – Adjusted EBITDA for the Crude
Oil Supply and Logistics segment was $2.0 million for the first
quarter of 2015, compared to $0.7 million for the first quarter of
2014. The increase was primarily due to a $1.9 million increase in
adjusted gross margin in the Permian Basin related to the expansion
of the Silver Dollar Pipeline System in the fourth quarter of 2014.
This was partially offset by higher operating expenses and lower
margin per barrel due to the competitive environment.
Refined Products Terminals and Storage – Adjusted EBITDA for the
Refined Products Terminals and Storage segment was $2.8 million for
the first quarter of 2015, compared to $4.9 million for the first
quarter of 2014. The decrease was primarily due to a $2.2 million
decrease in adjusted gross margin from lower volumes and realized
prices for refined products sold.
Cash Distributions
On April 28, 2015, JP Energy announced that it would pay on May
14, 2015, to unitholders of record on May 7, 2015, a cash
distribution of $0.3250 per common and subordinated unit for the
three month period ended March 31, 2015.
Earnings Conference Call Information
We will hold a conference call on Wednesday, May 13, 2015, at
9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss our
first quarter 2015 financial results. The call can be accessed live
over the telephone by dialing (877) 407-0784, or for international
callers, (201) 689-8560. A replay will be available shortly after
the call and can be accessed by dialing (877) 870-5176, or for
international callers (858) 384-5517. The passcode for the replay
is 13607518. The replay of the conference call will be available
for approximately two weeks following the call.
Interested parties may also listen to a simultaneous webcast of
the call on our website at www.jpenergypartners.com under the
“Investors” section. A replay of the webcast will also be available
for approximately two weeks following the call.
About JP Energy Partners LP
JP Energy Partners LP (JPEP) is a publicly traded,
growth-oriented limited partnership that owns, operates, develops
and acquires a diversified portfolio of midstream energy assets.
Our operations currently consist of: (i) crude oil pipelines and
storage; (ii) crude oil supply and logistics; (iii) refined
products terminals and storage; and (iv) NGL distribution and
sales, which together provide midstream infrastructure solutions
for the growing supply of crude oil, refined products and NGLs in
the United States. To learn more, please visit our website at
www.jpenergypartners.com.
Use of Non-GAAP Financial Measures
Adjusted EBITDA, distributable cash flow and adjusted gross
margin are supplemental, non-GAAP financial measures used by
management and by external users of our financial statements, such
as investors and commercial banks, to assess:
- our operating performance as compared
to those of other companies in the midstream sector, without regard
to financing methods, historical cost basis or capital
structure;
- the ability of our assets to generate
sufficient cash flow to make distributions to our unitholders;
- our ability to incur and service debt
and fund capital expenditures; and
- the viability of acquisitions and other
capital expenditure projects and the returns on investment of
various investment opportunities.
We believe that the presentation of Adjusted EBITDA,
distributable cash flow and adjusted gross margin provides
information useful to investors in assessing our financial
condition and results of operations. The GAAP measures most
directly comparable to Adjusted EBITDA and distributable cash flow
are net income (loss) and cash flow from operating activities,
respectively, and the GAAP measure most directly comparable to
adjusted gross margin is operating income (loss). These non-GAAP
measures should not be considered as alternatives to the most
directly comparable GAAP financial measure. Each of these non-GAAP
financial measures exclude some, but not all, items that affect the
most directly comparable GAAP financial measure. Because Adjusted
EBITDA, distributable cash flow and adjusted gross margin may be
defined differently by other companies in the our industry, our
definitions of these non-GAAP financial measures may not be
comparable to similarly titled measures of other companies, thereby
diminishing their utility.
We define Adjusted EBITDA as net income (loss) plus (minus)
interest expense (income), income tax expense (benefit),
depreciation and amortization expense, asset impairments, (gains)
losses on asset sales, certain non-cash charges such as non-cash
equity compensation, non-cash vacation expense, non-cash (gains)
losses on commodity derivative contracts (total (gain) loss on
commodity derivatives less net cash flow associated with commodity
derivatives settled during the period) and selected (gains) charges
and transaction costs that are unusual or non-recurring. We define
distributable cash flow as Adjusted EBITDA less net cash interest
paid, income taxes paid and maintenance capital expenditures. We
define adjusted gross margin as total revenues minus cost of sales,
excluding depreciation and amortization, and certain non-cash
charges such as non-cash vacation expense and non-cash gains
(losses) on derivative contracts (total gain (losses) on commodity
derivatives less net cash flow associated with commodity
derivatives settled during the period).
Forward-Looking Statements
Disclosures in this press release contain “forward-looking
statements.” The words “believe,” “expect,” “anticipate,” “plan,”
“intend,” “foresee,” “should,” “would,” “could” or other similar
expressions are intended to identify forward-looking statements,
which are generally not historical in nature. These forward-looking
statements are based on our current expectations and beliefs
concerning future developments and their potential effect on us.
While management believes that these forward-looking statements are
reasonable as and when made, there can be no assurance that future
developments affecting us will be those that we anticipate. All
comments concerning our expectations for future revenues and
operating results are based on our forecasts for our existing
operations and do not include the potential impact of any future
acquisitions. Our forward-looking statements involve significant
risks and uncertainties (some of which are beyond our control) and
assumptions that could cause actual results to differ materially
from our historical experience and our present expectations or
projections. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to the price of, and the demand for,
crude oil, refined products and NGLs in the markets we serve; the
volumes of crude oil that we gather, transport and store, the
throughput volumes at our refined products terminals and our NGL
sales volumes; the fees we receive for the crude oil, refined
products and NGL volumes we handle; pressures from our competitors,
some of which may have significantly greater resources than us; the
cost of propane that we buy for resale, including due to
disruptions in its supply, and whether we are able to pass along
cost increases to our customers; competitive pressures from other
energy sources such as natural gas, which could reduce existing
demand for propane; the risk of contract cancellation, non-renewal
or failure to perform by our customers, and our inability to
replace such contracts and/or customers; leaks or releases of
hydrocarbons into the environment that result in significant costs
and liabilities; the level of our operating, maintenance and
general and administrative expenses; regulatory action affecting
our existing contracts, our operating costs or our operating
flexibility; failure to secure or maintain contracts with our
largest customers, or non-performance of any of those customers
under the applicable contract; competitive conditions in our
industry; changes in the long-term supply of and demand for oil and
natural gas; volatility of fuel prices; actions taken by our
customers, competitors and third-party operators; our ability to
complete growth projects on time and on budget; inclement or
hazardous weather conditions, including flooding, and the physical
impacts of climate change; environmental hazards; industrial
accidents; changes in laws and regulations (or the interpretation
thereof) related to the transportation, storage or terminaling of
crude oil and refined products or the distribution and sales of
NGLs; fires, explosions or other accidents; the effects of future
litigation; and other factors discussed from time to time in each
of our documents and reports filed with the Securities and Exchange
Commission. Any forward-looking statement applies only as of the
date on which such statement is made and we do not intend to
correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise, except as
required by law.
JP ENERGY PARTNERS LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
March 31, December 31,
2015 2014 ASSETS (in thousands, except unit
data) Current assets Cash and cash equivalents $
2,152 $ 3,325 Restricted cash 600 600 Accounts receivable, net
84,915 108,725 Receivables from related parties 8,497 10,548
Inventory 30,938 20,826 Prepaid expenses and other current assets
11,659 4,915 Total Current Assets 138,761
148,939
Non-current assets Property, plant and
equipment, net 272,645 262,148 Goodwill 248,721 248,721 Intangible
assets, net 143,979 148,311 Deferred financing costs and other
assets, net 4,848 5,054 Total Non-Current Assets
670,193 664,234 Total Assets $ 808,954 $ 813,173
LIABILITIES AND PARTNERS' CAPITAL Current
liabilities Accounts payable $ 73,468 $ 88,052 Accrued
liabilities 24,773 28,971 Capital leases and short-term debt 305
229 Customer deposits and advances 2,255 5,050 Current portion of
long-term debt 386 383 Total Current Liabilities
101,187 122,685
Non-current liabilities Long-term
debt 110,995 84,125 Other long-term liabilities 4,868
5,683 Total Liabilities 217,050 212,493
Commitments and Contingencies
Partners' capital
General partner interest 1,350 - Common units (21,852,219 units
authorized; 18,198,894 and 18,209,519 units issued and outstanding
as of March 31, 2015 and December 31, 2014, respectively) 310,488
315,630 Subordinated units (18,197,249 units authorized; 18,153,897
and 18,197,249 units issued and outstanding as of March 31, 2015
and December 31, 2014, respectively) 280,066 285,050
Total Partners' Capital 591,904 600,680 Total
Liabilities and Partners' Capital $ 808,954 $ 813,173
JP ENERGY PARTNERS LP
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended March 31,
2015 2014 (in thousands, except unit and
per unit data) REVENUES: Crude oil sales $ 231,917 $
341,005 Gathering, transportation and storage fees 6,951 8,096 NGL
and refined product sales 54,185 63,801 Refined products terminals
and storage fees 3,108 2,663 Other revenues 3,125
3,102 Total revenues 299,286
418,667
COSTS AND EXPENSES: Cost of sales,
excluding depreciation and amortization 254,890 382,889 Operating
expense 16,611 16,153 General and administrative 14,475 12,633
Depreciation and amortization 11,339 10,094 Loss on disposal of
assets, net 130 356 Total costs and
expenses 297,445 422,125
OPERATING INCOME (LOSS) 1,841 (3,458 )
OTHER
INCOME (EXPENSE) Interest expense (1,173 ) (3,259 ) Loss on
extinguishment of debt - (1,634 ) Other income, net 19
111
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 687 (8,240 ) Income tax (expense)
benefit (22 ) 57
INCOME (LOSS) FROM CONTINUING
OPERATIONS 665 (8,183 )
DISCONTINUED OPERATIONS
Net loss from discontinued operations - (405 )
NET
INCOME (LOSS) $ 665 $ (8,588 )
Basic and
diluted loss per unit Net income allocated to common units $
342 Weighted average number of common units outstanding - basic
18,206,669 Weighted average number of common units outstanding -
diluted 18,224,336 Basic and diluted income per common unit $ 0.02
Net income allocated to subordinated units $ 323 Weighted
average number of subordinated units outstanding - basic and
diluted 18,185,621 Basic and diluted income per subordinated unit $
0.02 Distribution declared per common and subordinated unit
$ 0.325
JP ENERGY PARTNERS LP
NON-GAAP RECONCILIATIONS
(Unaudited)
Three months ended March
31, 2015 2014 (in thousands)
Segment Adjusted EBITDA Crude oil pipelines and storage $
5,476 $ 4,968 Crude oil supply and logistics 1,982 695 Refined
products terminals and storage 2,822 4,853 NGLs distribution and
sales 12,098 5,252 Discontinued operations - 79 Corporate and other
(7,189 ) (7,349 )
Total Adjusted EBITDA 15,189
8,498 Depreciation and amortization (11,339 ) (10,094 ) Interest
expense (1,173 ) (3,259 ) Loss on extinguishment of debt - (1,634 )
Income tax (expense) benefit (22 ) 57 Loss on disposal of assets,
net (130 ) (356 ) Unit-based compensation (431 ) (282 ) Total gain
on commodity derivatives 771 135 Net cash (receipts) payments for
commodity derivatives
settled during the period
3,192 (633 ) Non-cash inventory costing adjustment (2,915 ) -
Transaction costs and other (2,477 ) (536 ) Discontinued operations
- (484 )
Net income (loss) $ 665
$ (8,588 )
Three months ended March
31, 2015 2014 (in thousands)
Segment Adjusted gross margin Crude oil pipelines and
storage $ 6,667 $ 6,096 Crude oil supply and logistics 4,992 3,070
Refined products terminals and storage 3,632 5,862 NGL distribution
and sales 28,358 21,443
Total
Adjusted gross margin 43,649 36,471 Operating expenses (16,611
) (16,153 ) General and administrative (14,475 ) (12,633 )
Depreciation and amortization (11,339 ) (10,094 ) Loss on disposal
of assets, net (130 ) (356 ) Total gain on commodity derivatives
771 135 Net cash (receipts) payments for commodity derivatives
settled during the period
3,192 (633 ) Non-cash inventory costing adjustment (2,915 ) - Other
(301 ) (195 )
Operating income (loss) $ 1,841
$ (3,458 )
JP ENERGY PARTNERS LP
NON-GAAP RECONCILIATION
(CONTINUED)
(Unaudited)
Three months ended March 31, 2015
(in thousands) Net cash provided by operating
activities $ 3,440 Depreciation and amortization (11,339 )
Derivative valuation changes 4,008 Amortization of deferred
financing costs (227 ) Unit-based compensation (431 ) Loss on
disposal of assets (130 ) Bad debt expense (467 ) Other non-cash
items (71 ) Changes in assets and liabilities 5,882
Net income $ 665 Depreciation and amortization 11,339
Interest expense 1,173 Income tax expense 22 Loss on disposal of
assets, net 130 Unit-based compensation 431 Total gain on commodity
derivatives (771 ) Net cash receipts (payments) for commodity
derivatives settled during the period
(3,192 ) Non-cash inventory costing adjustment 2,915 Transaction
costs and other 2,477
Adjusted EBITDA $ 15,189
Less: Cash interest paid, net of interest income 887 Maintenance
capital expenditures 990
Distributable cash
flow $ 13,312 Less: Distributions 11,966
Amount in excess of distributions $ 1,346
Distribution coverage 1.11x
JP ENERGY PARTNERS LP
SUPPLEMENTAL OPERATIONAL DATA
(Unaudited)
Three months ended March 31, Segment
Key Operational Data 2015 2014
Change Crude oil pipelines and storage Crude oil
pipeline throughput (Bbls/d) 28,329 18,129 10,200 Crude oil supply
and logistics Crude oil sales (Bbls/d) 73,779 43,356 30,423 Refined
products terminals and storage Terminal and storage throughput
(Bbls/d) 63,787 61,619 2,168 NGLs distribution and sales NGL and
refined product sales (Mgal/d) 274 236 38
JP Energy Partners LPInvestor Relations,
866-912-3714investorrelations@jpep.com
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