|
|
|
|
|
001-35630
|
90-0840530
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
1330 Post Oak Blvd, Suite 600
Houston, Texas
|
77056
|
(Address of principal executive offices)
|
(Zip Code)
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
þ
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
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|
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|
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
99.1
|
|
|
99.2
|
|
|
99.3
|
|
|
|
|
Hi-Crush Partners LP
|
||
|
|
|
|
|
|
|
|
|
By:
|
|
Hi-Crush GP LLC, its general partner
|
|
|
|
|
|
|
Date:
|
February 5, 2019
|
|
By:
|
|
/s/ Laura C. Fulton
|
|
|
|
|
|
Laura C. Fulton
|
|
|
|
|
|
Chief Financial Officer
|
•
|
Revenues of
$162.2 million
in
4Q
2018
vs.
$214.0 million
in
3Q 2018
and
$216.5 million
in
4Q
2017
|
•
|
Net loss of
$(9.9) million
in
4Q
2018
vs. net income of
$27.1 million
in
3Q 2018
and
$41.9 million
in
4Q
2017
|
•
|
Adjusted EBITDA of
$10.2 million
in
4Q
2018
vs.
$51.3 million
in
3Q 2018
and
$57.9 million
in
4Q
2017
|
•
|
Contribution margin per ton of
$14.35
in
4Q
2018
vs.
$23.92
in
3Q 2018
and
$23.46
in
4Q
2017
|
•
|
Exited 4Q 2018 with
$114.3 million
of cash, no borrowings on ABL facility and total liquidity of
$172.5 million
|
•
|
51%
of 4Q 2018 sales volumes sold to E&Ps; executed additional sand supply and last mile service agreements
|
•
|
Completed construction of second Kermit facility; Wyeville expansion remains on target for 1Q 2019
|
|
Three Months Ended
|
||||||||||
|
December 31,
|
|
September 30,
|
||||||||
|
2018
|
|
2017 (a)
|
|
2018 (a)
|
||||||
Revenues
|
$
|
162,235
|
|
|
$
|
216,456
|
|
|
$
|
213,972
|
|
Cost of goods sold (excluding depreciation, depletion and amortization)
|
133,877
|
|
|
146,428
|
|
|
147,583
|
|
|||
Depreciation, depletion and amortization
|
9,762
|
|
|
8,220
|
|
|
10,241
|
|
|||
Gross profit
|
18,596
|
|
|
61,808
|
|
|
56,148
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
General and administrative expenses
|
18,582
|
|
|
12,023
|
|
|
15,634
|
|
|||
Accretion of asset retirement obligations
|
125
|
|
|
115
|
|
|
124
|
|
|||
Other operating expenses
|
929
|
|
|
522
|
|
|
631
|
|
|||
Income (loss) from operations
|
(1,040
|
)
|
|
49,148
|
|
|
39,759
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Earnings from equity method investments
|
1,250
|
|
|
217
|
|
|
1,624
|
|
|||
Interest expense
|
(10,140
|
)
|
|
(3,105
|
)
|
|
(8,012
|
)
|
|||
Loss on extinguishment of debt
|
—
|
|
|
(4,332
|
)
|
|
(6,233
|
)
|
|||
Net income (loss)
|
$
|
(9,930
|
)
|
|
$
|
41,928
|
|
|
$
|
27,138
|
|
Earnings (loss) per limited partner unit:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.08
|
)
|
|
$
|
0.48
|
|
|
$
|
0.30
|
|
Diluted
|
$
|
(0.08
|
)
|
|
$
|
0.47
|
|
|
$
|
0.29
|
|
|
Year Ended
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Revenues
|
$
|
842,840
|
|
|
$
|
602,623
|
|
Cost of goods sold (excluding depreciation, depletion and amortization)
|
577,974
|
|
|
438,348
|
|
||
Depreciation, depletion and amortization
|
38,284
|
|
|
29,449
|
|
||
Gross profit
|
226,582
|
|
|
134,826
|
|
||
Operating costs and expenses:
|
|
|
|
||||
General and administrative expenses
|
59,328
|
|
|
43,667
|
|
||
Accretion of asset retirement obligations
|
498
|
|
|
458
|
|
||
Other operating expenses
|
2,765
|
|
|
865
|
|
||
Other operating income
|
—
|
|
|
(3,554
|
)
|
||
Income from operations
|
163,991
|
|
|
93,390
|
|
||
Other income (expense):
|
|
|
|
||||
Earnings from equity method investments
|
5,184
|
|
|
75
|
|
||
Interest expense
|
(25,347
|
)
|
|
(12,971
|
)
|
||
Loss on extinguishment of debt
|
(6,233
|
)
|
|
(4,332
|
)
|
||
Net income
|
$
|
137,595
|
|
|
$
|
76,162
|
|
Earnings per limited partner unit:
|
|
|
|
||||
Basic
|
$
|
1.46
|
|
|
$
|
0.97
|
|
Diluted
|
$
|
1.42
|
|
|
$
|
0.96
|
|
(a)
|
Financial information has been recast to include the results attributable to our sponsor and general partner.
|
|
Three Months Ended
|
||||||||||
|
December 31,
|
|
September 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
||||||
Reconciliation of distributable cash flow to net income (loss):
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(9,930
|
)
|
|
$
|
41,928
|
|
|
$
|
27,138
|
|
Depreciation and depletion expense
|
9,901
|
|
|
8,357
|
|
|
10,373
|
|
|||
Amortization expense
|
1,318
|
|
|
419
|
|
|
1,215
|
|
|||
Interest expense
|
10,140
|
|
|
3,105
|
|
|
8,012
|
|
|||
EBITDA
|
11,429
|
|
|
53,809
|
|
|
46,738
|
|
|||
Earnings from equity method investments
|
(1,250
|
)
|
|
(217
|
)
|
|
(1,624
|
)
|
|||
Loss on extinguishment of debt
|
—
|
|
|
4,332
|
|
|
6,233
|
|
|||
Adjusted EBITDA
|
10,179
|
|
|
57,924
|
|
|
51,347
|
|
|||
Less: Cash interest paid, including accruals
|
(9,738
|
)
|
|
(2,833
|
)
|
|
(7,688
|
)
|
|||
Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (a)
|
(3,718
|
)
|
|
(5,553
|
)
|
|
(4,914
|
)
|
|||
Add: Accretion of asset retirement obligations
|
125
|
|
|
115
|
|
|
124
|
|
|||
Add: Unit-based compensation
|
1,931
|
|
|
1,808
|
|
|
1,897
|
|
|||
Distributable cash flow
|
(1,221
|
)
|
|
51,461
|
|
|
40,766
|
|
|||
Adjusted for: Distributable cash flow attributable to assets contributed from the sponsor, prior to the period in which the contribution occurred (b)
|
2,171
|
|
|
1,116
|
|
|
(725
|
)
|
|||
Distributable cash flow attributable to Hi-Crush Partners LP
|
950
|
|
|
52,577
|
|
|
40,041
|
|
|||
Less: Distributable cash flow attributable to the holder of incentive distribution rights
|
—
|
|
|
(593
|
)
|
|
—
|
|
|||
Distributable cash flow attributable to limited partner unitholders
|
$
|
950
|
|
|
$
|
51,984
|
|
|
$
|
40,041
|
|
(a)
|
Maintenance and replacement capital expenditures, including accrual for reserve replacement, were determined based on an estimated reserve replacement cost of $1.35 per ton produced and delivered through September 30, 2017. Effective October 1, 2017, we increased the estimated reserve replacement cost to $1.85 per ton produced and delivered, due to the addition of our first Kermit facility. Effective January 1, 2019, we revised our estimated reserve replacement cost to $2.10 per ton as a result of completion of construction of our second Kermit facility. Such expenditures include those associated with the replacement of equipment and sand reserves, to the extent that such expenditures are made to maintain our long-term operating capacity. The amount presented does not represent an actual reserve account or requirement to spend the capital.
|
(b)
|
The Partnership's historical financial information has been recast to consolidate our sponsor and general partner for the periods leading up to their contribution into the Partnership. For purposes of calculating distributable cash flow attributable to Hi-Crush Partners LP, the Partnership excludes the incremental amount of recast distributable cash flow earned during the periods prior to the contribution.
|
|
Year Ended
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Reconciliation of distributable cash flow to net income:
|
|
|
|
||||
Net income
|
$
|
137,595
|
|
|
$
|
76,162
|
|
Depreciation and depletion expense
|
38,775
|
|
|
29,872
|
|
||
Amortization expense
|
3,374
|
|
|
1,681
|
|
||
Interest expense
|
25,347
|
|
|
12,971
|
|
||
EBITDA
|
205,091
|
|
|
120,686
|
|
||
Earnings from equity method investments
|
(5,184
|
)
|
|
(75
|
)
|
||
Loss on extinguishment of debt
|
6,233
|
|
|
4,332
|
|
||
Adjusted EBITDA
|
206,140
|
|
|
124,943
|
|
||
Less: Cash interest paid, including accruals
|
(24,183
|
)
|
|
(10,950
|
)
|
||
Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (a)
|
(18,868
|
)
|
|
(13,742
|
)
|
||
Add: Accretion of asset retirement obligations
|
498
|
|
|
458
|
|
||
Add: Unit-based compensation
|
7,439
|
|
|
5,714
|
|
||
Distributable cash flow
|
171,026
|
|
|
106,423
|
|
||
Adjusted for: Distributable cash flow attributable to assets contributed from the sponsor, prior to the period in which the contribution occurred (b)
|
2,796
|
|
|
6,573
|
|
||
Distributable cash flow attributable to Hi-Crush Partners LP
|
173,822
|
|
|
112,996
|
|
||
Less: Distributable cash flow attributable to the holder of incentive distribution rights
|
(7,664
|
)
|
|
—
|
|
||
Distributable cash flow attributable to limited partner unitholders
|
$
|
166,158
|
|
|
$
|
112,996
|
|
(a)
|
Maintenance and replacement capital expenditures, including accrual for reserve replacement, were determined based on an estimated reserve replacement cost of $1.35 per ton produced and delivered through September 30, 2017. Effective October 1, 2017, we increased the estimated reserve replacement cost to $1.85 per ton produced and delivered, due to the addition of our first Kermit facility. Effective January 1, 2019, we revised our estimated reserve replacement cost to $2.10 per ton as a result of completion of construction of our second Kermit facility. Such expenditures include those associated with the replacement of equipment and sand reserves, to the extent that such expenditures are made to maintain our long-term operating capacity. The amount presented does not represent an actual reserve account or requirement to spend the capital.
|
(b)
|
The Partnership's historical financial information has been recast to consolidate our sponsor and general partner, Hi-Crush Whitehall LLC and Other Assets for the periods leading up to their contribution into the Partnership. For purposes of calculating distributable cash flow attributable to Hi-Crush Partners LP, the Partnership excludes the incremental amount of recast distributable cash flow earned during the periods prior to the contributions.
|
|
Year Ended
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Operating activities
|
$
|
237,303
|
|
|
$
|
83,975
|
|
Investing activities
|
(188,137
|
)
|
|
(325,120
|
)
|
||
Financing activities
|
57,367
|
|
|
244,026
|
|
||
Effects of exchange rate on cash
|
(1
|
)
|
|
—
|
|
||
Net increase in cash
|
$
|
106,532
|
|
|
$
|
2,881
|
|
(a)
|
Financial information has been recast to include the financial position and results attributable to our sponsor and general partner.
|
|
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
114,256
|
|
|
$
|
7,724
|
|
Accounts receivable, net
|
101,029
|
|
|
139,486
|
|
||
Inventories
|
57,089
|
|
|
44,272
|
|
||
Prepaid expenses and other current assets
|
13,239
|
|
|
4,969
|
|
||
Total current assets
|
285,613
|
|
|
196,451
|
|
||
Property, plant and equipment, net
|
1,031,188
|
|
|
900,010
|
|
||
Goodwill and intangible assets, net
|
71,575
|
|
|
8,416
|
|
||
Equity method investments
|
37,354
|
|
|
17,475
|
|
||
Other assets
|
8,108
|
|
|
5,877
|
|
||
Total assets
|
$
|
1,433,838
|
|
|
$
|
1,128,229
|
|
Liabilities, Equity and Partners’ Capital
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
71,039
|
|
|
$
|
48,289
|
|
Accrued and other current liabilities
|
61,337
|
|
|
33,450
|
|
||
Current portion of deferred revenues
|
19,940
|
|
|
4,399
|
|
||
Current portion of long-term debt
|
2,194
|
|
|
4,140
|
|
||
Total current liabilities
|
154,510
|
|
|
90,278
|
|
||
Deferred revenues
|
9,845
|
|
|
7,384
|
|
||
Long-term debt
|
443,283
|
|
|
194,462
|
|
||
Asset retirement obligations
|
10,677
|
|
|
10,179
|
|
||
Other liabilities
|
8,276
|
|
|
156
|
|
||
Total liabilities
|
626,591
|
|
|
302,459
|
|
||
Commitments and contingencies
|
|
|
|
||||
Equity and partners' capital:
|
|
|
|
||||
Limited partners interest, 100,874,988 and 89,009,188 units outstanding, respectively
|
811,477
|
|
|
1,239,282
|
|
||
Accumulated other comprehensive loss
|
(4,230
|
)
|
|
—
|
|
||
Total partners’ capital
|
807,247
|
|
|
1,239,282
|
|
||
Non-controlling interest
|
—
|
|
|
(413,512
|
)
|
||
Total equity and partners' capital
|
807,247
|
|
|
825,770
|
|
||
Total liabilities, equity and partners' capital
|
$
|
1,433,838
|
|
|
$
|
1,128,229
|
|
(a)
|
Financial information has been recast to include the financial position and results attributable to our sponsor and general partner.
|
|
Three Months Ended
|
||||||||||
|
December 31,
|
|
September 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
||||||
Sand sold
|
1,976,805
|
|
|
2,985,115
|
|
|
2,775,360
|
|
|||
Sand produced and delivered
|
2,009,855
|
|
|
3,001,744
|
|
|
2,655,831
|
|
|||
Contribution margin
|
$
|
28,358
|
|
|
$
|
70,028
|
|
|
$
|
66,389
|
|
Contribution margin per ton sold
|
$
|
14.35
|
|
|
$
|
23.46
|
|
|
$
|
23.92
|
|
|
Year Ended
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Sand sold
|
10,407,296
|
|
|
8,938,713
|
|
||
Sand produced and delivered
|
10,198,814
|
|
|
9,067,584
|
|
||
Contribution margin
|
$
|
264,866
|
|
|
$
|
164,275
|
|
Contribution margin per ton sold
|
$
|
25.45
|
|
|
$
|
18.38
|
|
|
Three Months Ended
|
|
Year Ended
|
||||||||
|
December 31,
|
|
December 31,
|
||||||||
Weighted average limited partner units outstanding:
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Basic common units outstanding
|
98,359,616
|
|
|
90,201,488
|
|
|
91,248,042
|
|
|
86,518,249
|
|
Potentially dilutive common units
|
—
|
|
|
1,382,733
|
|
|
2,390,138
|
|
|
1,382,733
|
|
Diluted common units outstanding
|
98,359,616
|
|
|
91,584,221
|
|
|
93,638,180
|
|
|
87,900,982
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
|
General Partner and IDRs
|
|
Limited Partner Units
|
|
Total
|
||||||
Declared distribution
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Assumed allocation of distribution in excess of loss
|
—
|
|
|
(9,930
|
)
|
|
(9,930
|
)
|
|||
Add back recast losses attributable to our sponsor and general partner through October 21, 2018
|
—
|
|
|
2,218
|
|
|
2,218
|
|
|||
Assumed allocation of net loss
|
$
|
—
|
|
|
$
|
(7,712
|
)
|
|
$
|
(7,712
|
)
|
|
|
|
|
|
|
||||||
Loss per limited partner unit - basic
|
|
|
$
|
(0.08
|
)
|
|
|
||||
Loss per limited partner unit - diluted
|
|
|
$
|
(0.08
|
)
|
|
|
|
Three Months Ended December 31, 2017
|
||||||||||
|
General Partner and IDRs
|
|
Limited Partner Units
|
|
Total
|
||||||
Declared distribution
|
$
|
—
|
|
|
$
|
17,802
|
|
|
$
|
17,802
|
|
Assumed allocation of earnings in excess of distribution
|
—
|
|
|
24,126
|
|
|
24,126
|
|
|||
Add back recast losses attributable to our sponsor and general partner
|
—
|
|
|
1,250
|
|
|
1,250
|
|
|||
Assumed allocation of net income
|
$
|
—
|
|
|
$
|
43,178
|
|
|
$
|
43,178
|
|
|
|
|
|
|
|
||||||
Earnings per limited partner unit - basic
|
|
|
$
|
0.48
|
|
|
|
||||
Earnings per limited partner unit - diluted
|
|
|
$
|
0.47
|
|
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
General Partner and IDRs
|
|
Limited Partner Units
|
|
Total
|
||||||
Declared distribution
|
$
|
7,664
|
|
|
$
|
109,836
|
|
|
$
|
117,500
|
|
Assumed allocation of earnings in excess of distributions
|
—
|
|
|
20,095
|
|
|
20,095
|
|
|||
Add back recast losses attributable to our sponsor and general partner through October 21, 2018
|
—
|
|
|
3,195
|
|
|
3,195
|
|
|||
Assumed allocation of net income
|
$
|
7,664
|
|
|
$
|
133,126
|
|
|
$
|
140,790
|
|
|
|
|
|
|
|
||||||
Earnings per limited partner unit - basic
|
|
|
$
|
1.46
|
|
|
|
||||
Earnings per limited partner unit - diluted
|
|
|
$
|
1.42
|
|
|
|
|
Year Ended December 31, 2017
|
||||||||||
|
General Partner and IDRs
|
|
Limited Partner Units
|
|
Total
|
||||||
Declared distribution
|
$
|
—
|
|
|
$
|
31,457
|
|
|
$
|
31,457
|
|
Assumed allocation of earnings in excess of distributions
|
—
|
|
|
44,705
|
|
|
44,705
|
|
|||
Add back recast losses attributable to our sponsor and general partner
|
—
|
|
|
6,372
|
|
|
6,372
|
|
|||
Add back recast losses attributable to Whitehall and Other Assets through March 15, 2017
|
—
|
|
|
1,471
|
|
|
1,471
|
|
|||
Assumed allocation of net income
|
$
|
—
|
|
|
$
|
84,005
|
|
|
$
|
84,005
|
|
|
|
|
|
|
|
||||||
Earnings per limited partner unit - basic
|
|
|
$
|
0.97
|
|
|
|
||||
Earnings per limited partner unit - diluted
|
|
|
$
|
0.96
|
|
|
|