HCLP resumes distribution and authorizes buyback

[cmm3rd]

Hi-Crush Partners LP Resumes Distribution for the Third Quarter of 2017 and Announces Unit Buyback Program
GLOBENEWSWIRE 3:15 PM ET 10/17/2017
Symbol Last Price Change
HCLP 8.95down +0.25 (+2.87%)
QUOTES AS OF 04:02:02 PM ET 10/17/2017
HOUSTON, Oct. 17, 2017 (GLOBE NEWSWIRE) -- Hi-Crush Partners LP(HCLP) , or Hi-Crush(HCLP) or the Partnership, announced today that the Board of Directors of its general partner has declared a quarterly cash distribution of $0.15 per unit on all common units, or $0.60 on an annualized basis, for the third quarter of 2017. Separately, the Board of Directors also approved a unit buyback program of up to $100 million.


"The stabilization of market conditions, combined with strong demand for frac sand and logistics services has benefited our business," said Laura Fulton, Chief Financial Officer of Hi-Crush. "We prudently expanded our geographic reach and operational capabilities in response to continued strong customer demand, and our volumes and cash flow have improved markedly. With this in mind, our management, along with the Board of Directors, determined that the timing was appropriate to resume capital return to unitholders and to do so in two distinct ways. First, by reinstating cash quarterly distributions to unitholders, effective beginning the third quarter, payable in the fourth quarter of 2017. And second, by pursuing an opportunistic unit buyback on the open market of up to $100 million as authorized by our Board."

The buyback authorization is effective immediately, and the program will continue until otherwise modified or terminated by the Board of Directors in its sole discretion and without notice. The Partnership has authority at this time under its Term Loan and Revolving Credit Agreement for repurchases of up to $20 million which, over the near-term and combined with the initial quarterly distribution and its expected growth, is well-aligned with Hi-Crush's(HCLP) capital return intentions. The Partnership will seek consent allowing for the authorized amount of up to $100 million. The buyback program does not obligate the Partnership to repurchase any specific dollar amount or number of units and may be suspended or discontinued at any time.

"The third quarter cash distribution, augmented by the buyback program, reflects a thoughtful balance for our long-term capital return program and furthers our goal of maximizing value to our unitholders," said Robert E. Rasmus, Chief Executive Officer of Hi-Crush. "The proactive and prudent actions we took over the course of the industry downturn during the last two years, and the subsequent upturn in activity, have resulted in our ability to generate strong cash flow and positioned Hi-Crush(HCLP) to begin returning capital to unitholders. With this initial distribution, we are setting the foundation for sustainable and meaningful growth over the near and long term. We continue to see fundamentals for the frac sand industry improving and believe we are uniquely positioned to take advantage as we execute on our operational strategy of Mine. Move. Manage."

The distribution will be paid on November 14, 2017 to all common unitholders of record on October 31, 2017.

Distributions to Foreign Investors

The declaration of the distribution is intended to be a qualified notice to nominees under Treasury Regulation Section 1.1446-4(b), with 100% of the Partnership’s distributions to foreign investors attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.

About Hi-Crush(HCLP)

Hi-Crush (HCLP) is a premier provider of proppant and logistics solutions to the North American energy industry. Our portfolio of purpose-built production facilities are capable of producing 13.4 million tons per year of high-quality monocrystalline sand, a specialized mineral used as a proppant during the well completion process, necessary to facilitate the recovery of hydrocarbons from oil and natural gas wells. Our production facilities' direct access to major U.S. railroads enhance our delivery capabilities into consuming basins, while our strategically located owned and operated in-basin terminals as well as our in-basin production facility positions us within close proximity to significant activity in all major oil and gas basins for advantageous truck transportation. Our integrated distribution system, enhanced by our innovative PropStreamTM logistics solution, efficiently delivers proppant the "last mile" into the blender, providing customers surety of supply from mine to well site. For more information, visit www.hicrush.com.

[dan_s]

I told you so!

Hi-Crush is hosting our Houston luncheon on November 9.

Based on my forecast model, which you can find on the EPG website, this is just the first of many more distribution increases. Plus, I think my forecast is too conservative. Cash flow from operations should double from 2017 to 2018. Now go take a look at First Call's revenue, EPS and CFPS forecast for Hi-Crush.

My valuation is $22.50 / unit and that will be going up after they release Q3 results.