HI-Crush's Q4 results beat my forecast. Updating my forecast model now and will post it to the EPG website later today. - Dan
Houston, Texas, February 23, 2016 - Hi-Crush Partners LP (HCLP), "Hi-Crush" or the "Partnership", today reported fourth quarter and full year 2015 results. The limited partners` interest in net income was $11.2 million for the fourth quarter of 2015, resulting in basic and diluted earnings of $0.30 per limited partner unit. In the fourth quarter of 2015, the Partnership received a settlement payment of $22.5 million for past and future obligations under a customer contract. The settlement payment is non-recurring income and $10.2 million was recognized as other revenue related to make-whole payments and the remainder as other operating income. Net income, adjusted earnings before interest, taxes and depreciation and amortization ("Adjusted EBITDA") and distributable cash flow each include the positive impact of the contract settlement payment.
The basic and diluted earnings per unit during the fourth quarter of 2015 was negatively impacted by $1.9 million of impairments and other expenses associated with the write-down of certain transload assets, as well as costs associated with reducing headcount. The limited partners` interest in adjusted net income, adjusted to exclude the impact of non-recurring items, was $13.2 million for the fourth quarter of 2015 and the diluted adjusted earnings were $0.35 per limited partner unit.
Non-cash charges represented $1.7 million of the $1.9 million of impairments and other expenses incurred during the fourth quarter of 2015. Excluding the non-cash portion of the impairments and other expenses, the Partnership reported Adjusted EBITDA of $19.7 million for the fourth quarter of 2015. Distributable cash flow attributable to the limited partners for the fourth quarter of 2015 was $15.7 million. No distributions to unitholders were declared for the fourth quarter as the Partnership continued its distribution suspension to conserve cash.
Revenues for the quarter ended December 31, 2015 totaled $72.1 million, including other revenues and payments of make-whole penalties, on sales of 1.2 million tons of frac sand. This compares to $81.5 million of revenues on sales of 1.4 million tons of frac sand in the third quarter of 2015. Approximately 52% of the volumes were sold in-basin for the fourth quarter of 2015, an increase from 49% in the third quarter of 2015. Average sales price per ton sold decreased to $52 per ton in the fourth quarter of 2015 from $57 per ton in the third quarter of 2015 and $67 per ton in the second quarter of 2015, reflecting continued pricing pressure as a result of the general slowdown in market activity, particularly for well completions.
Of the 1.2 million tons of frac sand sold during the fourth quarter of 2015, approximately 66% were produced and delivered from the Partnership`s facilities, with the remainder being purchased from the sponsor`s Whitehall facility. Contribution margin was $9.66 per ton in the fourth quarter of 2015, a decrease from the third quarter contribution margin of $14.00 per ton, or 31%, due primarily to the decrease in sales prices, particularly for sand sold FOB mine, as well as the impact of empty railcar storage costs.
"We benefited in the quarter from the contract settlement payment, but the fourth quarter was very challenging," said Robert E. Rasmus, Chief Executive Officer of Hi-Crush. "These difficult conditions have extended into the first quarter of 2016, and while pricing has not deteriorated further, it has not improved. We anticipate that the lower levels of activity we experienced late in the fourth quarter will continue at least through the first half of the year. Although, the trend forward into 2016 reflects the impact of further oil price declines with fewer wells being completed, we remain confident that the long-term fundamentals of the industry remain strong."