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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Emerge Energy Services LP Common Units Representing Limited Partner Interests | NYSE:EMES | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.2099 | 0.00 | 01:00:00 |
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Delaware
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90-0832937
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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180 State Street, Suite 225, Southlake, Texas 76092
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(817) 865-5830
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(Address of principal executive offices)
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(Registrant’s telephone number, including area code)
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Title of Each Class
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Name of Each Exchange On Which Registered
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Common Units Representing Limited Partner Interests
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New York Stock Exchange
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Large-Accelerated Filer
☒
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Accelerated Filer
o
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Non-Accelerated Filer
o
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Smaller Reporting Company
o
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•
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failure to secure or maintain contracts with our largest customers, or non-performance of any of those customers under the applicable contract;
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•
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competitive conditions in our industry;
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•
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the amount of frac sand we are able to excavate and process, which could be adversely affected by, among other things, operating difficulties and unusual or unfavorable geologic conditions;
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•
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the volume of frac sand we are able to sell;
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•
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the price at which we are able to sell frac sand;
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•
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changes in the long-term supply of and demand for oil and natural gas;
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•
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volatility of fuel prices;
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•
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unanticipated ground, grade or water conditions at our sand mines;
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•
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actions taken by our customers, competitors and third-party operators;
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•
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our ability to complete growth projects on time and on budget;
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•
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increasing costs and minimum contractual obligations relating to our transportation services and infrastructure;
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•
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inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change;
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•
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environmental hazards;
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•
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industrial accidents;
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•
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changes in laws and regulations (or the interpretation thereof) related to the mining and hydraulic fracturing industries, silica dust exposure or the environment;
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•
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inability to acquire or maintain necessary permits or mining or water rights;
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•
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facility shutdowns in response to environmental regulatory actions;
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•
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inability to obtain necessary production equipment or replacement parts;
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•
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reduction in the amount of water available for processing;
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•
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technical difficulties or failures;
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•
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labor disputes and disputes with our excavation contractor;
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•
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late delivery of supplies;
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•
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difficulty collecting receivables;
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•
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inability of our customers to take delivery of our products;
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•
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changes in the price and availability of transportation;
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•
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fires, explosions or other accidents;
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•
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pit wall failures or rock falls;
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•
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the effects of future litigation; and
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•
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other factors discussed in this Quarterly Report on Form 10-Q and the detailed factors discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2015
.
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March 31, 2016
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December 31, 2015
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||||
ASSETS
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|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
11,361
|
|
|
$
|
20,870
|
|
|
Trade and other receivables, net
|
9,948
|
|
|
28,955
|
|
|
||
Inventories
|
22,399
|
|
|
30,162
|
|
|
||
Prepaid expenses and other current assets
|
8,481
|
|
|
8,994
|
|
|
||
Assets held for sale
|
21,595
|
|
|
23,453
|
|
|
||
Total current assets
|
73,784
|
|
|
112,434
|
|
|
||
|
|
|
|
|
||||
Property, plant and equipment, net
|
176,205
|
|
|
179,520
|
|
|
||
Intangible assets, net
|
6,818
|
|
|
7,323
|
|
|
||
Other assets, net
|
12,542
|
|
|
13,230
|
|
|
||
Non-current assets held for sale
|
108,613
|
|
|
107,541
|
|
|
||
Total assets
|
$
|
377,962
|
|
|
$
|
420,048
|
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|
|
|
|
||||
LIABILITIES AND PARTNERS’ EQUITY
|
|
|
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|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
$
|
5,492
|
|
|
$
|
8,339
|
|
|
Accrued liabilities
|
9,593
|
|
|
13,294
|
|
|
||
Liabilities held for sale
|
10,932
|
|
|
15,195
|
|
|
||
Total current liabilities
|
26,017
|
|
|
36,828
|
|
|
||
|
|
|
|
|
||||
Long-term debt, net of current portion
|
294,547
|
|
|
295,938
|
|
|
||
Business acquisition obligation, net of current portion
|
7,786
|
|
|
7,772
|
|
|
||
Other long-term liabilities
|
8,712
|
|
|
4,732
|
|
|
||
Total liabilities
|
337,062
|
|
|
345,270
|
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||
|
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|
||||
Commitments and contingencies
|
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|
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|
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Partners’ equity:
|
|
|
|
|
||||
General partner
|
—
|
|
|
—
|
|
|
||
Limited partner common units (issued and outstanding 24,121,222 units and 24,119,972 units as of March 31, 2016 and December 31, 2015, respectively)
|
40,900
|
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|
74,778
|
|
|
||
Total partners’ equity
|
40,900
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|
74,778
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Total liabilities and partners’ equity
|
$
|
377,962
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|
$
|
420,048
|
|
|
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Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Revenues
|
$
|
29,670
|
|
|
$
|
96,244
|
|
|
Operating expenses:
|
|
|
|
|
|
|
||
Cost of goods sold (excluding depreciation, depletion and amortization)
|
43,790
|
|
|
66,255
|
|
|
||
Depreciation, depletion and amortization
|
4,907
|
|
|
3,801
|
|
|
||
Selling, general and administrative expenses
|
6,775
|
|
|
7,717
|
|
|
||
Contract and project terminations
|
4,026
|
|
|
6,719
|
|
|
||
Total operating expenses
|
59,498
|
|
|
84,492
|
|
|
||
Operating income (loss)
|
(29,828
|
)
|
|
11,752
|
|
|
||
Other expense (income):
|
|
|
|
|
||||
Interest expense, net
|
4,594
|
|
|
2,837
|
|
|
||
Other
|
(1
|
)
|
|
(21
|
)
|
|
||
Total other expense
|
4,593
|
|
|
2,816
|
|
|
||
Income (loss) from continuing operations before provision for income taxes
|
(34,421
|
)
|
|
8,936
|
|
|
||
Provision for income taxes
|
20
|
|
|
181
|
|
|
||
Net income (loss) from continuing operations
|
(34,441
|
)
|
|
8,755
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|
||
Income (loss) from discontinued operations, net of taxes
|
226
|
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|
736
|
|
|
||
Net income (loss)
|
$
|
(34,215
|
)
|
|
$
|
9,491
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|
||||
Earnings (loss) per common unit (1)
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|
||||
Basic:
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|
||||
Earnings (loss) per common unit from continuing operations
|
$
|
(1.42
|
)
|
|
$
|
0.36
|
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|
Earnings (loss) per common unit from discontinued operations
|
0.01
|
|
|
0.03
|
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|
||
Basic earnings (loss) per common unit (1)
|
$
|
(1.41
|
)
|
|
$
|
0.39
|
|
|
Diluted:
|
|
|
|
|
||||
Earnings (loss) per common unit from continuing operations
|
$
|
(1.42
|
)
|
|
$
|
0.36
|
|
|
Earnings (loss) per common unit from discontinued operations
|
0.01
|
|
|
0.03
|
|
|
||
Diluted earnings (loss) per common unit (1)
|
$
|
(1.41
|
)
|
|
$
|
0.39
|
|
|
|
|
|
|
|
||||
Weighted average number of common units outstanding including participating securities (basic) (1)
|
24,181,071
|
|
|
24,128,009
|
|
|
||
Weighted average number of common units outstanding (diluted) (1)
|
24,181,071
|
|
|
24,130,565
|
|
|
||
|
|
|
|
|
||||
(1) See Note 9.
|
|
|
|
|
|
Limited Partner Common Units
|
|
General Partner
(non-economic
interest)
|
|
Total Partners’ Equity
|
|
||||||
Balance at December 31, 2015
|
$
|
74,778
|
|
|
$
|
—
|
|
|
$
|
74,778
|
|
|
Net income (loss)
|
(34,215
|
)
|
|
—
|
|
|
(34,215
|
)
|
|
|||
Equity-based compensation expense
|
340
|
|
|
—
|
|
|
340
|
|
|
|||
Other
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
|||
Balance at March 31, 2016
|
$
|
40,900
|
|
|
$
|
—
|
|
|
$
|
40,900
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
$
|
(34,215
|
)
|
|
$
|
9,491
|
|
|
Adjustments to reconcile net income (loss) to cash flows from operating activities
|
|
|
|
|
|
|
||
Depreciation, depletion and amortization
|
7,261
|
|
|
6,440
|
|
|
||
Equity-based compensation expense
|
340
|
|
|
2,292
|
|
|
||
Project and contract terminations costs - non-cash portion
|
4,001
|
|
|
6,719
|
|
|
||
Provision for doubtful accounts
|
1,708
|
|
|
38
|
|
|
||
Loss on disposal of assets
|
—
|
|
|
8
|
|
|
||
Amortization of debt discount/premium and deferred financing costs
|
465
|
|
|
266
|
|
|
||
Write-down of inventory
|
5,394
|
|
|
—
|
|
|
||
Unrealized loss on derivative instruments
|
84
|
|
|
384
|
|
|
||
Other non-cash
|
29
|
|
|
19
|
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
14,513
|
|
|
8,574
|
|
|
||
Inventories
|
8,343
|
|
|
1,952
|
|
|
||
Prepaid expenses and other current assets
|
114
|
|
|
(3,456
|
)
|
|
||
Accounts payable and accrued liabilities
|
(11,016
|
)
|
|
13
|
|
|
||
Other assets
|
688
|
|
|
(3,578
|
)
|
|
||
Cash flows from operating activities:
|
(2,291
|
)
|
|
29,162
|
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of property, plant and equipment
|
(4,916
|
)
|
|
(8,940
|
)
|
|
||
Collection of notes receivable
|
3
|
|
|
3
|
|
|
||
Cash flows from investing activities:
|
(4,913
|
)
|
|
(8,937
|
)
|
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from line of credit borrowings
|
5,698
|
|
|
63,800
|
|
|
||
Repayment of line of credit borrowings
|
(6,500
|
)
|
|
(49,600
|
)
|
|
||
Repayment of other long-term debt
|
—
|
|
|
(53
|
)
|
|
||
Distributions to unitholders
|
—
|
|
|
(34,020
|
)
|
|
||
Payment of business acquisition obligation
|
(447
|
)
|
|
(404
|
)
|
|
||
Payments on capital lease obligation
|
—
|
|
|
(340
|
)
|
|
||
Payment of financing costs
|
(1,053
|
)
|
|
—
|
|
|
||
Other financing activities
|
(3
|
)
|
|
—
|
|
|
||
Cash flows from financing activities:
|
(2,305
|
)
|
|
(20,617
|
)
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Net decrease
|
(9,509
|
)
|
|
(392
|
)
|
|
||
Balance at beginning of period
|
20,870
|
|
|
6,876
|
|
|
||
Balance at end of period
|
$
|
11,361
|
|
|
$
|
6,484
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
||||||
|
($ in thousands)
|
|
||||||
Trade and other receivables, net
|
$
|
11,945
|
|
|
$
|
8,247
|
|
|
Inventories
|
6,482
|
|
|
12,457
|
|
|
||
Prepaid expenses and other current assets
|
3,168
|
|
|
2,749
|
|
|
||
Current assets held for sale
|
$
|
21,595
|
|
|
$
|
23,453
|
|
|
|
|
|
|
|
||||
Property, plant and equipment, net
|
$
|
56,627
|
|
|
$
|
54,110
|
|
|
Intangible assets, net
|
22,678
|
|
|
24,124
|
|
|
||
Goodwill
|
29,264
|
|
|
29,264
|
|
|
||
Other assets, net
|
44
|
|
|
43
|
|
|
||
Long-term assets held for sale
|
$
|
108,613
|
|
|
$
|
107,541
|
|
|
|
|
|
|
|
||||
Accounts payable
|
$
|
4,777
|
|
|
$
|
10,088
|
|
|
Accrued liabilities
|
6,155
|
|
|
5,107
|
|
|
||
Total liabilities held for sale
|
$
|
10,932
|
|
|
$
|
15,195
|
|
|
•
|
Interest on the revolver was allocated to the discontinued operation based on the allocation of debt between sand and fuel business.
|
•
|
Equity-based compensation costs recognized for the Fuel business employees was allocated to discontinued operations.
|
•
|
The taxes paid on behalf of the Fuel business were compiled by review of prior tax filings and payments. These amounts were allocated to discontinued operations.
|
•
|
General corporate overhead costs were not allocated to discontinued operations.
|
|
March 31, 2016
|
|
March 31, 2015
|
|
||||
|
|
|
||||||
|
($ in thousands)
|
|
||||||
Revenues (1)
|
$
|
80,481
|
|
|
$
|
107,717
|
|
|
Cost of goods sold (excluding depreciation, depletion and amortization) (1)
|
75,700
|
|
|
102,075
|
|
|
||
Depreciation and amortization
|
2,354
|
|
|
2,639
|
|
|
||
Selling, general and administrative expenses
|
1,598
|
|
|
1,886
|
|
|
||
Interest expense, net
|
597
|
|
|
288
|
|
|
||
Other
|
—
|
|
|
(4
|
)
|
|
||
Income (loss) from discontinued operations before provision for income taxes
|
232
|
|
|
833
|
|
|
||
Provision for income taxes
|
6
|
|
|
97
|
|
|
||
Income (loss) from discontinued operations, net of taxes
|
$
|
226
|
|
|
$
|
736
|
|
|
|
|
|
|
|
||||
(1) Fuel revenues and cost of goods sold include excise taxes and similar taxes:
|
$
|
13,083
|
|
|
$
|
11,795
|
|
|
•
|
$7 million
of the sales price was withheld as a general escrow associated with certain indemnification obligations. Any unutilized escrow balance, plus any accrued interest thereon, will be paid
54
months from the closing date;
|
•
|
$4 million
of the sales price was withheld as a hydrotreater escrow to satisfy any cost overruns of the Birmingham hydrotreater completion. Any unutilized escrow balance, along with any accrued interest thereon, will be paid
60
days after the substantial completion of the Birmingham hydrotreater;
|
•
|
$2.25 million
of the sales price was withheld as the Renewable Fuel Standard (“RFS") escrow account. The unutilized RFS escrow will be released, along with any accrued interest thereon, no later than
four
months from the closing date; and
|
•
|
$1 million
of the sales price was withheld as a pipeline escrow account. Any unutilized escrow balance, along with any accrued interest thereon, will be released with the general escrow.
|
Purchase price
|
$
|
167,736
|
|
|
Adjustments:
|
|
|
||
Working capital true-up
|
3,398
|
|
|
|
Other adjustments
|
(2,911
|
)
|
|
|
General escrow
|
(7,000
|
)
|
|
|
Hydrotreater escrow
|
(4,000
|
)
|
|
|
Other escrow
|
(3,250
|
)
|
|
|
Net proceeds
|
153,973
|
|
|
|
Less:
|
|
|
||
Net book value of assets and liabilities sold
|
(127,757
|
)
|
|
|
Escrow receivable
|
10,597
|
|
|
|
Transaction costs including commissions
|
(7,320
|
)
|
|
|
Gain on sale of Fuel business
|
$
|
29,493
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Sand finished goods
|
$
|
13,184
|
|
|
$
|
12,224
|
|
|
Sand work in process
|
9,122
|
|
|
17,796
|
|
|
||
Sand raw materials and supplies
|
93
|
|
|
142
|
|
|
||
Total
|
$
|
22,399
|
|
|
$
|
30,162
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Machinery and equipment (1)
|
$
|
87,357
|
|
|
$
|
87,357
|
|
|
Buildings and improvements (1)
|
66,280
|
|
|
66,215
|
|
|
||
Land and improvements (1)
|
45,065
|
|
|
45,065
|
|
|
||
Mineral reserves
|
30,181
|
|
|
30,181
|
|
|
||
Construction in progress
|
3,312
|
|
|
2,532
|
|
|
||
Capitalized reclamation costs
|
2,445
|
|
|
2,445
|
|
|
||
Total cost
|
234,640
|
|
|
233,795
|
|
|
||
Accumulated depreciation and depletion
|
58,435
|
|
|
54,275
|
|
|
||
Net property, plant and equipment
|
$
|
176,205
|
|
|
$
|
179,520
|
|
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
|
||||||
|
|
|
|
|
|
|
||||||
|
($ in thousands)
|
|
||||||||||
March 31, 2016:
|
|
|
|
|
|
|
||||||
Patents
|
$
|
7,170
|
|
|
$
|
950
|
|
|
$
|
6,220
|
|
|
Supply and transportation agreements
|
542
|
|
|
27
|
|
|
515
|
|
|
|||
Non-compete agreement
|
100
|
|
|
17
|
|
|
83
|
|
|
|||
Total
|
$
|
7,812
|
|
|
$
|
994
|
|
|
$
|
6,818
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2015:
|
|
|
|
|
|
|
||||||
Patents
|
$
|
7,000
|
|
|
$
|
234
|
|
|
$
|
6,766
|
|
|
Supply and transportation agreements
|
471
|
|
|
—
|
|
|
471
|
|
|
|||
Non-compete agreement
|
100
|
|
|
14
|
|
|
86
|
|
|
|||
Total
|
$
|
7,571
|
|
|
$
|
248
|
|
|
$
|
7,323
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Prepaid lease assets, net of current portion*
|
$
|
11,108
|
|
|
$
|
11,796
|
|
|
Other
|
1,434
|
|
|
1,434
|
|
|
||
Total
|
$
|
12,542
|
|
|
$
|
13,230
|
|
|
*
|
The cost to transport leased railcars from the manufacturer to our site for initial placement in service is capitalized and amortized over the term of the lease (typically
five
to
seven
years). This balance reflects the non-current portion of these capitalized costs.
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Current portion of business acquisition obligations
|
$
|
2,316
|
|
|
$
|
2,843
|
|
|
Logistics
|
1,636
|
|
|
2,486
|
|
|
||
Deferred compensation
|
1,191
|
|
|
1,191
|
|
|
||
Salaries and other employee-related
|
767
|
|
|
491
|
|
|
||
Sales, excise, property and income taxes
|
740
|
|
|
198
|
|
|
||
Accrued interest
|
734
|
|
|
947
|
|
|
||
Derivative contract liability
|
727
|
|
|
472
|
|
|
||
Current portion of contract termination
|
160
|
|
|
135
|
|
|
||
Sand purchases and royalties
|
145
|
|
|
520
|
|
|
||
Maintenance
|
76
|
|
|
—
|
|
|
||
Mining
|
57
|
|
|
—
|
|
|
||
Purchase of intangible assets
|
—
|
|
|
2,500
|
|
|
||
Other
|
1,044
|
|
|
1,511
|
|
|
||
Total
|
$
|
9,593
|
|
|
$
|
13,294
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Contract and project terminations
|
$
|
5,121
|
|
|
$
|
1,162
|
|
|
Asset retirement obligation due
|
2,591
|
|
|
2,570
|
|
|
||
Other
|
1,000
|
|
|
1,000
|
|
|
||
Total
|
$
|
8,712
|
|
|
$
|
4,732
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||
Customer A
|
12
|
%
|
|
11
|
%
|
|
Customer B
|
*
|
|
|
12
|
%
|
|
Customer C
|
*
|
|
|
12
|
%
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||
Customer A
|
27
|
%
|
|
16
|
%
|
|
Customer D
|
19
|
%
|
|
10
|
%
|
|
Customer E
|
15
|
%
|
|
13
|
%
|
|
Customer F
|
13
|
%
|
|
*
|
|
|
Customer G
|
12
|
%
|
|
*
|
|
|
Customer B
|
*
|
|
|
17
|
%
|
|
Customer C
|
*
|
|
|
18
|
%
|
|
|
March 31, 2016
|
|
March 31, 2015
|
|
||
Customer A
|
34
|
%
|
|
*
|
|
|
Customer E
|
18
|
%
|
|
13
|
%
|
|
Customer F
|
*
|
|
|
21
|
%
|
|
Customer C
|
*
|
|
|
27
|
%
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Revolving credit facility:
|
|
|
|
|
||||
Principal
|
$
|
301,261
|
|
|
$
|
302,063
|
|
|
Deferred financing costs
|
(6,714
|
)
|
|
(6,125
|
)
|
|
||
Total long-term debt
|
$
|
294,547
|
|
|
$
|
295,938
|
|
|
•
|
the
$350 million
total aggregate commitment under the Credit Agreement will be reduced in an amount equal to the net proceeds of any notes offerings we may make in the future;
|
•
|
we will be required to maintain at least
$25 million
of excess availability (as defined in the Credit Agreement) under the Credit Agreement; and
|
•
|
we will be required to generate consolidated EBITDA in certain minimum amounts beginning with the quarter ending December 31, 2015 and rolling forward thereafter.
|
•
|
our subsidiaries’ ability to make distributions to us (to permit us to make distributions to unitholders) if, after giving pro forma effect to such distribution, our total leverage ratio would be greater than or equal to
4.00
to 1.00, or the excess availability under the Credit Agreement would be less than the greater of
$43.75 million
or
12.5%
of the total aggregate commitments;
|
•
|
our ability to enter into certain substantial acquisition or merger agreements with third-party businesses or making certain other investments; and
|
•
|
our ability to make capital expenditures for growth and maintenance through March 31, 2019 above certain amounts per quarter.
|
•
|
we were restricted from making dividends or distributions to our unitholders, and the Borrowers were restricted from making dividends or distributions to us; and
|
•
|
we were restricted from making capital expenditures in our Sand business in excess of
$570,000
in the aggregate or from making capital expenditures in our Fuel business for purposes other than completing installation of hydro treaters at the facilities.
|
•
|
the total aggregate commitment under the Credit Agreement was reduced from
$350 million
to
$325 million
and the sublimit on letters of credit was reduced from
$30 million
to
$20 million
;
|
•
|
the dominion period (as defined in the Credit Agreement), whereby our and our subsidiaries’ cash receipts are swept on a daily basis and used to reduce outstanding borrowings, was extended until the revolving credit facility matures; and
|
•
|
the threshold amounts for an event of default upon the occurrence of judicial actions, judgments or cross defaults were decreased from
$10 million
to
$5 million
.
|
•
|
a covenant to maintain
$20 million
of excess availability (as defined in the Credit Agreement), subject to decrease to
$15 million
upon the satisfaction of certain conditions;
|
•
|
a covenant to limit capital expenditures (as defined in the Credit Agreement) to certain maximum amounts for each quarter through March 31, 2019;
|
•
|
beginning with the quarter ending June 30, 2017, a covenant to generate consolidated EBITDA (as defined in the Credit Agreement) in certain minimum amounts;
|
•
|
beginning with the quarter ending March 31, 2018, a covenant to maintain an interest coverage ratio (as defined in the Credit Agreement) of not less than
2.00
to 1.00, which is scheduled to increase to
3.00
to 1.00 for the fiscal quarter ending March 31, 2019; and
|
•
|
a covenant to raise at least
$31.2 million
of net proceeds from the issuance and sale of common equity by November 30, 2016.
|
|
Railcar Leases (1)
|
|
Other Operating Leases (2)
|
|
Royalty Commitments (3)
|
|
Purchase Commitments (4)
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
($ in thousands)
|
|||||||||||||||
Remainder of 2016
|
$
|
21,931
|
|
|
$
|
890
|
|
|
$
|
173
|
|
|
$
|
10,040
|
|
|
2017
|
27,921
|
|
|
597
|
|
|
230
|
|
|
21,026
|
|
|
||||
2018
|
37,027
|
|
|
332
|
|
|
230
|
|
|
24,241
|
|
|
||||
2019
|
37,995
|
|
|
259
|
|
|
230
|
|
|
22,439
|
|
|
||||
2020
|
39,560
|
|
|
254
|
|
|
230
|
|
|
21,342
|
|
|
||||
Thereafter
|
296,630
|
|
|
2,592
|
|
|
1,710
|
|
|
48,614
|
|
|
||||
Total
|
$
|
461,064
|
|
|
$
|
4,924
|
|
|
$
|
2,803
|
|
|
147,702
|
|
|
|
Less amount representing interest
|
|
|
|
|
|
|
(1,283
|
)
|
|
|||||||
Total less interest
|
|
|
|
|
|
|
$
|
146,419
|
|
|
(1)
|
Includes minimum amounts payable under various operating leases for railcars as well as estimated costs to transport leased railcars from the manufacturer to our site for initial placement in service. During the first six months of 2016, we completed negotiations with various railcar lessors pursuant to which we terminated a future order of railcars, deferred future railcar deliveries and reduced and deferred payments on existing leases. We accrued
$4 million
in contract termination charges during the first quarter of 2016. These liabilities are included in Other long-term liabilities in our Condensed Consolidated Balance Sheets. We also incurred
$8 million
for delivery deferrals in the second quarter of 2016. We issued warrants to purchase
370,000
common units representing limited partnership interests in the partnership in exchange of these concessions during the second quarter of 2016. The above amounts include the impact of all concessions.
|
(2)
|
Includes lease agreements for land, facilities and equipment.
|
(3)
|
Represents minimum royalty payments for various sand mining locations. The amounts paid will differ based on amounts extracted.
|
(4)
|
Includes minimum amounts payable under a business acquisition agreement, long-term rail transportation agreements, transload facility agreements, and other purchase commitments.
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Wages and employee-related costs (1)
|
$
|
4,436
|
|
|
$
|
8,754
|
|
|
Lease expense
|
$
|
6
|
|
|
$
|
6
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Accounts receivable
|
$
|
1,210
|
|
|
$
|
295
|
|
|
Accounts payable and accrued liabilities
|
$
|
858
|
|
|
$
|
553
|
|
|
(1)
|
We do not have any employees. Our general partner manages our human resource assets, including fringe benefits and other employee-related charges. We routinely and regularly reimburse our general partner for any employee-related costs paid on our behalf, and report such costs as operating expenses.
|
|
Total
Units |
|
Phantom
Units |
|
Restricted
Units |
|
Fair Value per Unit
at Award Date |
|
|||||
Outstanding at December 31, 2015
|
225,000
|
|
|
216,804
|
|
|
8,196
|
|
|
$
|
21.22
|
|
|
Granted
|
21,000
|
|
|
21,000
|
|
|
—
|
|
|
$
|
3.28
|
|
|
Vested
|
(2,000
|
)
|
|
(2,000
|
)
|
|
—
|
|
|
$
|
54.00
|
|
|
Forfeitures
|
(5,238
|
)
|
|
(5,238
|
)
|
|
—
|
|
|
$
|
38.18
|
|
|
Outstanding at March 31, 2016
|
238,762
|
|
|
230,566
|
|
|
8,196
|
|
|
$
|
19.00
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Texas margin tax
|
$
|
20
|
|
|
$
|
172
|
|
|
Canadian income tax
|
—
|
|
|
9
|
|
|
||
Total provision for income taxes
|
$
|
20
|
|
|
$
|
181
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands, except per unit data)
|
|
||||||
Net income (loss) from continuing operations
|
$
|
(34,441
|
)
|
|
$
|
8,755
|
|
|
Net income (loss) from discontinued operations
|
226
|
|
|
736
|
|
|
||
Net Income (loss)
|
$
|
(34,215
|
)
|
|
$
|
9,491
|
|
|
|
|
|
|
|
||||
Weighted average common units outstanding
|
24,121,222
|
|
|
23,718,961
|
|
|
||
Weighted average phantom units deemed participating securities
|
59,849
|
|
|
409,048
|
|
|
||
Weighted average number of common units outstanding including participating securities (basic)
|
24,181,071
|
|
|
24,128,009
|
|
|
||
Weighted average potentially dilutive units outstanding
|
—
|
|
|
2,556
|
|
|
||
Weighted average number of common units outstanding (diluted)
|
24,181,071
|
|
|
24,130,565
|
|
|
||
|
|
|
|
|
||||
Basic earnings (loss) per unit:
|
|
|
|
|
||||
Earnings (loss) per common unit from continuing operations
|
$
|
(1.42
|
)
|
|
$
|
0.36
|
|
|
Earnings (loss) per common unit from discontinued operations
|
0.01
|
|
|
0.03
|
|
|
||
Basic earnings (loss) per common unit
|
$
|
(1.41
|
)
|
|
$
|
0.39
|
|
|
|
|
|
|
|
||||
Diluted earnings (loss) per unit:
|
|
|
|
|
||||
Earnings (loss) per common unit from continuing operations
|
$
|
(1.42
|
)
|
|
$
|
0.36
|
|
|
Earnings (loss) per common unit from discontinued operations
|
0.01
|
|
|
0.03
|
|
|
||
Diluted earnings (loss) per common unit
|
$
|
(1.41
|
)
|
|
$
|
0.39
|
|
|
•
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
•
|
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
|
•
|
Level 3 inputs are measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources.
|
Agreement Date
|
|
Effective Date
|
|
Maturity Date
|
|
Notional Amount
|
|
Fixed Rate
|
|
Variable Rate
|
|
Nov. 1, 2013
|
|
Oct. 14, 2014
|
|
Oct. 16, 2017
|
|
$25,000,000
|
|
1.33200%
|
|
1 Month LIBOR
|
|
Nov. 7, 2013
|
|
Oct. 14, 2014
|
|
Oct. 16, 2017
|
|
$25,000,000
|
|
1.25500%
|
|
1 Month LIBOR
|
|
Nov. 21, 2013
|
|
Oct. 14, 2014
|
|
Oct. 16, 2017
|
|
$20,000,000
|
|
1.21875%
|
|
1 Month LIBOR
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
Classification
|
|
||||
|
|
|
|
|
|
|
||||
|
($ in thousands)
|
|
|
|
||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
$
|
640
|
|
|
$
|
621
|
|
|
Assets held for sale
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||
Interest rate swaps
|
$
|
727
|
|
|
$
|
472
|
|
|
Accrued liabilities
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
152
|
|
|
Liabilities held for sale
|
|
|
Three Months Ended March 31,
|
|
|
|
||||||
|
2016
|
|
2015
|
|
Classification
|
|
||||
|
|
|
|
|
|
|
||||
|
(expense $ in thousands)
|
|
|
|
||||||
Interest rate swaps
|
$
|
411
|
|
|
$
|
580
|
|
|
Interest expense, net
|
|
Commodity derivative contracts
|
19
|
|
|
571
|
|
|
Income from discontinued operations
|
|
||
|
$
|
430
|
|
|
$
|
1,151
|
|
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Cash paid for interest
|
$
|
6,326
|
|
|
$
|
2,485
|
|
|
Cash paid for income taxes, net of refunds
|
$
|
(67
|
)
|
|
$
|
244
|
|
|
Distribution equivalent rights accrued, net of payments
|
$
|
—
|
|
|
$
|
288
|
|
|
Purchases of PP&E and intangible assets accrued but not paid at period-end
|
$
|
2,986
|
|
|
$
|
316
|
|
|
Purchases of PP&E accrued in a prior period and paid in the current period
|
$
|
864
|
|
|
$
|
5,238
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|||||||
Revenues
|
$
|
29,670
|
|
|
$
|
96,244
|
|
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
||
Cost of goods sold (excluding depreciation, depletion and amortization)
|
43,790
|
|
|
66,255
|
|
|
||
Depreciation, depletion and amortization
|
4,907
|
|
|
3,801
|
|
|
||
Selling, general and administrative expenses
|
6,775
|
|
|
7,717
|
|
|
||
Contract and project terminations
|
4,026
|
|
|
6,719
|
|
|
||
Total operating expenses
|
59,498
|
|
|
84,492
|
|
|
||
Operating income (loss)
|
(29,828
|
)
|
|
11,752
|
|
|
||
Other expense (income):
|
|
|
|
|
|
|
||
Interest expense
|
4,594
|
|
|
2,837
|
|
|
||
Other
|
(1
|
)
|
|
(21
|
)
|
|
||
Total other expense
|
4,593
|
|
|
2,816
|
|
|
||
Income (loss) before provision for income taxes
|
(34,421
|
)
|
|
8,936
|
|
|
||
Provision for income taxes
|
20
|
|
|
181
|
|
|
||
Net income (loss) from continuing operations
|
(34,441
|
)
|
|
8,755
|
|
|
||
Income (loss) from discontinued operations, net of taxes
|
226
|
|
|
736
|
|
|
||
Net income (loss)
|
$
|
(34,215
|
)
|
|
$
|
9,491
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA (a)
|
$
|
(9,513
|
)
|
|
$
|
28,414
|
|
|
•
|
We reduced permanent headcount, with most of these reductions occurring in the fourth quarter of 2015.
|
•
|
We are minimizing the overall cost of sand sold by finding the lowest cost combinations of sand source, production location and transportation providers wherever possible.
|
•
|
We began shutting down our more expensive wet plants for winter earlier than normal in 2015, and we delayed opening our mines later than usual for the 2016 mining season.
|
•
|
We have temporarily idled our Wisconsin wet plants with the highest cost per ton, and we have strategically shifted sourcing of wet sand from higher cost sources to lower cost sources as demand for our frac sand has decreased.
|
•
|
In 2016, we have temporarily idled or significantly scaled back operations at two of our Wisconsin dry plants.
|
•
|
We began using new mining techniques at two of our Wisconsin mines in the third quarter of 2015, and introduced these techniques to our Kosse mine in July 2016. We expect to see over $1 per ton savings for frac sand sourced from these mines as these techniques are fully implemented and the resulting finished sand is sold.
|
•
|
We have negotiated, and continue to negotiate, price concessions and purchase commitment concessions from our major vendors, such as railcar lessors, rail transportation providers, mine operators, transload facilities operators, and professional services providers.
|
•
|
In 2016, we have minimized our capital expenditures to include only those projects with the potential for rapid returns, and comply with our bank covenants that limit capital expenditures.
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|||||||
Revenues
|
$
|
29,670
|
|
|
$
|
96,244
|
|
|
Operating expenses:
|
|
|
|
|
|
|
||
Cost of goods sold (excluding depreciation, depletion and amortization)
|
43,790
|
|
|
66,255
|
|
|
||
Depreciation, depletion and amortization
|
4,907
|
|
|
3,801
|
|
|
||
Selling, general and administrative expenses
|
6,775
|
|
|
7,717
|
|
|
||
Contract and project terminations
|
4,026
|
|
|
6,719
|
|
|
||
Operating income (loss)
|
$
|
(29,828
|
)
|
|
$
|
11,752
|
|
|
Adjusted EBITDA (a)
|
$
|
(12,982
|
)
|
|
$
|
24,322
|
|
|
|
|
|
|
|
||||
Volume of sand sold (tons in thousands)
|
439
|
|
|
1,151
|
|
|
||
Volume of sand produced by dry plant (tons in thousands):
|
|
|
|
|
||||
Arland, Wisconsin facility
|
—
|
|
|
405
|
|
|
||
Barron, Wisconsin facility
|
320
|
|
|
497
|
|
|
||
New Auburn, Wisconsin facility
|
169
|
|
|
305
|
|
|
||
Kosse, Texas facility
|
17
|
|
|
70
|
|
|
||
Total volume of sand produced
|
506
|
|
|
1,277
|
|
|
•
|
$39.7 million decrease in sales of Northern White sand (excluding estimated transportation markups and shortfall revenues), relating primarily to a 61% decrease in volumes sold as well as decreased pricing in light of current market conditions for frac sand;
|
•
|
an estimated $24.5 million decrease for significant reductions in markups per ton sold through transload sites; and
|
•
|
$2.4 million decrease in sales of native Texas sand (from our Kosse plant) due to lower sales prices.
|
•
|
$17.1 million decrease in the total cost to acquire and produce wet and dry sand, due mainly to lower sales volumes and lower-cost sources for wet sand;
|
•
|
$11.2 million decrease in rail transportation-related expense, primarily due to:
|
•
|
$14.0 million decreased rail shipping costs due to decreased volumes sold in-basin; offset by
|
•
|
$2.1 million increased rail lease expense; and
|
•
|
$0.7 million increased railcar storage costs;
|
•
|
$0.5 million increase in costs of transload facilities; and
|
•
|
$5.4 million write down of sand inventory in the first quarter of 2016 based on our lower or cost or market analysis. We attribute this write down to declining market conditions and significant decline in prices.
|
•
|
$1.7 million increase in bad debt expense; offset by
|
•
|
$0.6 million in decreased equity-based compensation expense; and
|
•
|
$0.3 million decrease in outside professional services.
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|||||||
Revenues
|
$
|
80,481
|
|
|
$
|
107,717
|
|
|
Cost of goods sold (excluding depreciation, depletion and amortization)
|
75,700
|
|
|
102,075
|
|
|
||
Depreciation and amortization
|
2,354
|
|
|
2,639
|
|
|
||
Selling, general and administrative expenses
|
1,598
|
|
|
1,886
|
|
|
||
Interest expense, net
|
597
|
|
|
288
|
|
|
||
Other
|
—
|
|
|
(4
|
)
|
|
||
Income (loss) from discontinued operations before provision for income taxes
|
232
|
|
|
833
|
|
|
||
Provision for income taxes
|
6
|
|
|
97
|
|
|
||
Income (loss) from discontinued operations, net of taxes
|
$
|
226
|
|
|
$
|
736
|
|
|
Adjusted EBITDA (a)
|
$
|
3,469
|
|
|
$
|
4,092
|
|
|
|
|
|
|
|
||||
Volume of refined fuels sold (gallons in thousands)
|
62,222
|
|
|
56,395
|
|
|
||
Volume of terminal throughput (gallons in thousands)
|
17,550
|
|
|
39,231
|
|
|
||
Volume of transmix refined (gallons in thousands)
|
24,448
|
|
|
21,354
|
|
|
||
Refined transmix as a percent of total refined fuels sold
|
39.3
|
%
|
|
37.9
|
%
|
|
•
|
$37.9 million decrease due to lower average fuel sales prices; offset by
|
•
|
$9.8 million increase for higher volumes of fuel sold; and
|
•
|
$1.3 million
increase
in excise and other transaction taxes.
|
•
|
$36.7 million decrease for lower average fuel purchase prices; offset by
|
•
|
$9.0 million increase for higher volumes of fuel sold; and
|
•
|
$1.3 million
increase
in excise and other transaction taxes.
|
•
|
the $350 million total aggregate commitment under the Credit Agreement will be reduced in an amount equal to the net proceeds of any notes offerings we may make in the future;
|
•
|
we will be required to maintain at least $25 million of excess availability (as defined in the Credit Agreement) under the Credit Agreement; and
|
•
|
we will be required to generate consolidated EBITDA in certain minimum amounts beginning with the quarter ending December 31, 2015 and rolling forward thereafter.
|
•
|
a covenant to maintain $20 million of excess availability (as defined in the Credit Agreement), subject to decrease to $15 million upon the satisfaction of certain conditions;
|
•
|
a covenant to limit capital expenditures (as defined in the Credit Agreement) to certain maximum amounts for each quarter through March 31, 2019;
|
•
|
beginning with the quarter ending June 30, 2017, a covenant to generate consolidated EBITDA (as defined in the Credit Agreement) in certain minimum amounts;
|
•
|
beginning with the quarter ending March 31, 2018, a covenant to maintain an interest coverage ratio (as defined in the Credit Agreement) of not less than 2.00 to 1.00, which is scheduled to increase to 3.00 to 1.00 for the fiscal quarter ending March 31, 2019; and
|
•
|
a covenant to raise at least $31.2 million of net proceeds from the issuance and sale of common equity by November 30, 2016.
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Cash flows from operating activities
|
$
|
(2,291
|
)
|
|
$
|
29,162
|
|
|
Cash flows from investing activities
|
$
|
(4,913
|
)
|
|
$
|
(8,937
|
)
|
|
Cash flows from financing activities
|
$
|
(2,305
|
)
|
|
$
|
(20,617
|
)
|
|
Cash and cash equivalents at beginning of period
|
$
|
20,870
|
|
|
$
|
6,876
|
|
|
Cash and cash equivalents at end of period
|
$
|
11,361
|
|
|
$
|
6,484
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Net debt proceeds (payments)
|
$
|
(802
|
)
|
|
$
|
14,147
|
|
|
Distributions to owners
|
—
|
|
|
(34,020
|
)
|
|
||
Other
|
(1,503
|
)
|
|
(744
|
)
|
|
||
Total
|
$
|
(2,305
|
)
|
|
$
|
(20,617
|
)
|
|
|
Payments Due By Period
|
|
||||||||||||||||||
|
Total
|
|
Remainder of 2016
|
|
2017 - 2018
|
|
2019 - 2020
|
|
Thereafter
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
($ in thousands)
|
|
||||||||||||||||||
Long-term debt (1)
|
$
|
353,880
|
|
|
$
|
12,465
|
|
|
$
|
32,374
|
|
|
$
|
309,041
|
|
|
$
|
—
|
|
|
Railcar leases (2)
|
461,064
|
|
|
21,931
|
|
|
64,948
|
|
|
77,555
|
|
|
296,630
|
|
|
|||||
Unsecured notes (2)
|
4,662
|
|
|
—
|
|
|
—
|
|
|
4,662
|
|
|
—
|
|
|
|||||
Other operating leases (3)
|
4,924
|
|
|
890
|
|
|
929
|
|
|
513
|
|
|
2,592
|
|
|
|||||
Purchase commitments (4)
|
147,702
|
|
|
10,040
|
|
|
45,267
|
|
|
43,781
|
|
|
48,614
|
|
|
|||||
Minimum royalty payments (5)
|
2,803
|
|
|
173
|
|
|
460
|
|
|
460
|
|
|
1,710
|
|
|
|||||
Total
|
$
|
975,035
|
|
|
$
|
45,499
|
|
|
$
|
143,978
|
|
|
$
|
436,012
|
|
|
$
|
349,546
|
|
|
(1)
|
Assumes balances outstanding as of
March 31, 2016
will be paid at maturity and includes interest using interest rates in effect at
March 31, 2016
.
|
(2)
|
Includes minimum amounts payable under various operating leases for railcars as well as estimated costs to transport leased railcars from the manufacturer to our site for initial placement in service. During the first six months of 2016, we completed negotiations with various railcar lessors pursuant to which we terminated a future order of railcars, deferred future railcar deliveries and reduced and deferred payments on existing leases. In exchange for these concessions, we issued at par an Unsecured Promissory Note in the aggregate principal amount of
$4 million
with interest payable in cash or, in certain situations, in-kind, when certain financial metrics have been met. These notes bears interest at a rate of five percent per annum and are due and payable within 30 days following the date on which financial statements are publicly available covering the first date on which these financial metrics have been met. These liabilities are included in Other long-term liabilities in our Condensed Consolidated Balance Sheets. We incurred $8 million for delivery deferrals in the second quarter of 2016. We also issued warrants to purchase 370,000 common units representing limited partnership interests in the partnership in exchange of these concessions during the second quarter of 2016. These amounts include the impact of all concessions.
|
(3)
|
Includes lease agreements for land, facilities and equipment.
|
(4)
|
Includes minimum amounts payable under a business acquisition agreement, long-term rail transportation agreements, transload facility agreements, asset purchase/construction agreements, and other purchase commitments.
|
(5)
|
Represents minimum royalty payments for various sand mining locations. The amounts paid will differ based on amounts extracted.
|
•
|
the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;
|
•
|
the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;
|
•
|
our liquidity position and the ability of our assets to generate cash sufficient to make debt payments and to make distributions;
|
•
|
our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure; and
|
•
|
our debt covenant compliance. Adjusted EBITDA is a key component of critical covenants to our Credit Agreement.
|
|
|
Continuing
|
|
Discontinued
|
|
Consolidated
|
|
||||||||||||||||||
|
|
|
|
||||||||||||||||||||||
|
|
Three Months Ended March 31,
|
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
($ in thousands)
|
|
||||||||||||||||||||||
Net income (loss)
|
|
$
|
(34,441
|
)
|
|
$
|
8,755
|
|
|
$
|
226
|
|
|
$
|
736
|
|
|
$
|
(34,215
|
)
|
|
$
|
9,491
|
|
|
Interest expense, net
|
|
4,594
|
|
|
2,837
|
|
|
597
|
|
|
288
|
|
|
5,191
|
|
|
3,125
|
|
|
||||||
Depreciation, depletion and amortization
|
|
4,907
|
|
|
3,801
|
|
|
2,354
|
|
|
2,639
|
|
|
7,261
|
|
|
6,440
|
|
|
||||||
Provision for income taxes
|
|
20
|
|
|
181
|
|
|
6
|
|
|
97
|
|
|
26
|
|
|
278
|
|
|
||||||
EBITDA
|
|
(24,920
|
)
|
|
15,574
|
|
|
3,183
|
|
|
3,760
|
|
|
(21,737
|
)
|
|
19,334
|
|
|
||||||
Equity-based compensation expense
|
|
237
|
|
|
2,006
|
|
|
103
|
|
|
286
|
|
|
340
|
|
|
2,292
|
|
|
||||||
Write down of sand inventory
|
|
5,394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,394
|
|
|
—
|
|
|
||||||
Contract and project terminations
|
|
4,026
|
|
|
6,719
|
|
|
—
|
|
|
—
|
|
|
4,026
|
|
|
6,719
|
|
|
||||||
Provision for doubtful accounts
|
|
1,672
|
|
|
—
|
|
|
36
|
|
|
38
|
|
|
1,708
|
|
|
38
|
|
|
||||||
Accretion expense
|
|
29
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
19
|
|
|
||||||
Retirement of assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
||||||
Reduction in force
|
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
||||||
Fuel division selling expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Other state and local taxes
|
|
469
|
|
|
—
|
|
|
147
|
|
|
—
|
|
|
616
|
|
|
—
|
|
|
||||||
Other adjustments allowable under our existing credit agreement
|
|
35
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
4
|
|
|
||||||
Adjusted EBITDA
|
|
$
|
(12,982
|
)
|
|
$
|
24,322
|
|
|
$
|
3,469
|
|
|
$
|
4,092
|
|
|
$
|
(9,513
|
)
|
|
$
|
28,414
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||
|
($ in thousands)
|
|
||||||
Adjusted EBITDA
|
$
|
(9,513
|
)
|
|
$
|
28,414
|
|
|
Non-cash interest expense, net
|
(4,642
|
)
|
|
(2,475
|
)
|
|
||
Non-cash income tax expense
|
(642
|
)
|
|
(278
|
)
|
|
||
Contract and project terminations - non-cash
|
(25
|
)
|
|
—
|
|
|
||
Reduction in force
|
(76
|
)
|
|
—
|
|
|
||
Write down of sand inventory
|
(5,394
|
)
|
|
—
|
|
|
||
Other adjustments allowable under our existing credit agreement
|
(35
|
)
|
|
(4
|
)
|
|
||
Change in other operating assets and liabilities
|
18,036
|
|
|
3,505
|
|
|
||
Cash flows from operating activities:
|
$
|
(2,291
|
)
|
|
$
|
29,162
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities:
|
$
|
(4,913
|
)
|
|
$
|
(8,937
|
)
|
|
|
|
|
|
|
||||
Cash flows from financing activities:
|
$
|
(2,305
|
)
|
|
$
|
(20,617
|
)
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Certificate of Limited Partnership of Emerge Energy Services LP (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.2
|
|
Amendment to Certificate of Limited Partnership of Emerge Energy Services LP (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.3
|
|
First Amended and Restated Limited Partnership Agreement of Emerge Energy Services LP, dated as of May 14, 2013 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 20, 2013).
|
|
|
|
3.4
|
|
Certificate of Limited Formation of Emerge Energy Services GP LLC (incorporated by reference to Exhibit 3.5 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.5
|
|
Amendment to Certificate of Formation of Emerge Energy Services GP LLC (incorporated by reference to Exhibit 3.6 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.6
|
|
Amended and Restated Limited Liability Company Agreement of Emerge Energy Services GP, LLC, dated as of May 14, 2013 (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 20, 2013).
|
|
|
|
10.1
|
|
Amendment No. 3 to Amended and Restated Revolving Credit and Security Agreement, dated March 1, 2016, among Emerge Energy Services LP, as parent guarantor, the Borrowers party thereto, PNC Bank, National Association, as administrative agent and collateral agent, and the Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on March 7, 2016).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2*
|
|
Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
95.1*
|
|
Mine Safety Disclosure Exhibit.
|
|
|
|
101*
|
|
Interactive Data Files - XBRL.
|
|
|
EMERGE ENERGY SERVICES LP
|
||
|
|
|
|
|
By:
|
EMERGE ENERGY SERVICES GP LLC, its general partner
|
|
|
|
|
|
|
By:
|
/s/ Rick Shearer
|
|
|
|
Rick Shearer
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
By:
|
/s/ Deborah Deibert
|
|
|
|
Deborah Deibert
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Certificate of Limited Partnership of Emerge Energy Services LP (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.2
|
|
Amendment to Certificate of Limited Partnership of Emerge Energy Services LP (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.3
|
|
First Amended and Restated Limited Partnership Agreement of Emerge Energy Services LP, dated as of May 14, 2013 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 20, 2013).
|
|
|
|
3.4
|
|
Certificate of Limited Formation of Emerge Energy Services GP LLC (incorporated by reference to Exhibit 3.5 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.5
|
|
Amendment to Certificate of Formation of Emerge Energy Services GP LLC (incorporated by reference to Exhibit 3.6 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-187487).
|
|
|
|
3.6
|
|
Amended and Restated Limited Liability Company Agreement of Emerge Energy Services GP, LLC, dated as of May 14, 2013 (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 20, 2013).
|
|
|
|
10.1
|
|
Amendment No. 3 to Amended and Restated Revolving Credit and Security Agreement, dated March 1, 2016, among Emerge Energy Services LP, as parent guarantor, the Borrowers party thereto, PNC Bank, National Association, as administrative agent and collateral agent, and the Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on March 7, 2016).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2*
|
|
Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
95.1*
|
|
Mine Safety Disclosure Exhibit.
|
|
|
|
101*
|
|
Interactive Data Files - XBRL.
|
1 Year EMERGE ENERGY SERVICES LP Chart |
1 Month EMERGE ENERGY SERVICES LP Chart |
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