Delaware | 001-36674 | 30-0831007 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | 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)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits. |
USD Partners LP | ||||
By: | USD Partners GP LLC, | |||
its general partner | ||||
Dated: August 7, 2017 | By: | /s/ Adam Altsuler | ||
Name: | Adam Altsuler | |||
Title: | Vice President and Chief Financial Officer |
Exhibit Number | Description | |
99.1 | Press release of USD Partners LP dated August 7, 2017. |
• | Established rail-to-pipeline solution from Western Canada with the Stroud terminal acquisition, which ~$25 million in total acquisition and other costs represents approximately 2.5x the estimated 2018 Adjusted EBITDA expected to be generated by the three-year, take-or-pay contract signed concurrently with the transaction |
• | Extended contracted term for 25% of Hardisty terminal’s available capacity through mid-2020 |
• | Generated Net cash provided by operating activities of $9.3 million, Adjusted EBITDA of $15.1 million and Distributable cash flow of $11.7 million |
• | Reported Net income of $8.4 million |
• | Raised $33.7 million from public equity offering of 3,000,000 units |
• | Increased quarterly cash distribution for ninth consecutive quarter to $0.34 per unit ($1.36 per unit annualized) |
• | Ended quarter with $201.2 million of available liquidity |
• | the Partnership’s liquidity and the ability of the Partnership’s businesses to produce sufficient cash flows to make distributions to the Partnership’s unitholders; and |
• | the Partnership’s ability to incur and service debt and fund capital expenditures. |
• | the amount of cash available for making distributions to the Partnership’s unitholders; |
• | the excess cash being retained for use in enhancing the Partnership’s existing businesses; and |
• | the sustainability of the Partnership’s current distribution rate per unit. |
USD Partners LP | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
For the Three and Six Months Ended June 30, 2017 and 2016 | |||||||||||||||
(unaudited) | |||||||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenues | |||||||||||||||
Terminalling services | $ | 21,977 | $ | 23,459 | $ | 45,536 | $ | 45,482 | |||||||
Terminalling services — related party | 2,518 | 1,756 | 4,258 | 3,406 | |||||||||||
Railroad incentives | 6 | 22 | 21 | 37 | |||||||||||
Fleet leases | 643 | 647 | 1,286 | 1,290 | |||||||||||
Fleet leases — related party | 891 | 891 | 1,781 | 1,781 | |||||||||||
Fleet services | 467 | 69 | 935 | 138 | |||||||||||
Fleet services — related party | 279 | 684 | 558 | 1,368 | |||||||||||
Freight and other reimbursables | 208 | 350 | 365 | 733 | |||||||||||
Freight and other reimbursables — related party | — | — | 1 | — | |||||||||||
Total revenues | 26,989 | 27,878 | 54,741 | 54,235 | |||||||||||
Operating costs | |||||||||||||||
Subcontracted rail services | 1,795 | 2,026 | 3,808 | 4,069 | |||||||||||
Pipeline fees | 5,369 | 5,338 | 10,786 | 10,052 | |||||||||||
Fleet leases | 1,534 | 1,538 | 3,067 | 3,071 | |||||||||||
Freight and other reimbursables | 208 | 350 | 366 | 733 | |||||||||||
Operating and maintenance | 594 | 783 | 1,301 | 1,653 | |||||||||||
Selling, general and administrative | 2,362 | 2,073 | 4,677 | 4,967 | |||||||||||
Selling, general and administrative — related party | 1,396 | 1,439 | 2,828 | 2,931 | |||||||||||
Depreciation and amortization | 4,969 | 4,914 | 9,910 | 9,819 | |||||||||||
Total operating costs | 18,227 | 18,461 | 36,743 | 37,295 | |||||||||||
Operating income | 8,762 | 9,417 | 17,998 | 16,940 | |||||||||||
Interest expense | 2,513 | 2,533 | 5,120 | 4,716 | |||||||||||
Loss (gain) associated with derivative instruments | 401 | (253 | ) | 612 | 1,270 | ||||||||||
Foreign currency transaction gain | (100 | ) | (15 | ) | (70 | ) | (145 | ) | |||||||
Other expense, net | 3 | — | 8 | — | |||||||||||
Income before provision for income taxes | 5,945 | 7,152 | 12,328 | 11,099 | |||||||||||
Provision for (benefit from) income taxes | (2,434 | ) | 1,917 | (1,249 | ) | 3,714 | |||||||||
Net income | $ | 8,379 | $ | 5,235 | $ | 13,577 | $ | 7,385 |
USD Partners LP | |||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||
For the Three and Six Months Ended June 30, 2017 and 2016 | |||||||||||||||
(unaudited) | |||||||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 8,379 | $ | 5,235 | $ | 13,577 | $ | 7,385 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 4,969 | 4,914 | 9,910 | 9,819 | |||||||||||
Loss (gain) associated with derivative instruments | 401 | (253 | ) | 612 | 1,270 | ||||||||||
Settlement of derivative contracts | 91 | 546 | 390 | 1,036 | |||||||||||
Unit based compensation expense | 1,218 | 969 | 2,016 | 1,697 | |||||||||||
Other | 473 | 165 | 755 | 334 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | (459 | ) | 269 | (424 | ) | 207 | |||||||||
Accounts receivable — related party | (34 | ) | 54 | 179 | 1,760 | ||||||||||
Prepaid expenses and other current assets | (2,687 | ) | (790 | ) | (1,108 | ) | (460 | ) | |||||||
Accounts payable and accrued expenses | (1,409 | ) | (1,224 | ) | (1,316 | ) | (1,961 | ) | |||||||
Accounts payable and accrued expenses — related party | (77 | ) | 119 | 230 | 24 | ||||||||||
Deferred revenue and other liabilities | (2,425 | ) | 1,857 | (3,545 | ) | 2,729 | |||||||||
Deferred revenue — related party | 1,025 | (300 | ) | 1,025 | (629 | ) | |||||||||
Change in restricted cash | (209 | ) | 1,793 | (230 | ) | (633 | ) | ||||||||
Net cash provided by operating activities | 9,256 | 13,354 | 22,071 | 22,578 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Additions of property and equipment | (25,647 | ) | 27 | (25,773 | ) | (246 | ) | ||||||||
Net cash provided by (used in) investing activities | (25,647 | ) | 27 | (25,773 | ) | (246 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||
Distributions | (8,239 | ) | (7,366 | ) | (16,142 | ) | (14,396 | ) | |||||||
Vested phantom units used for payment of participant taxes | (2 | ) | — | (1,072 | ) | (77 | ) | ||||||||
Net proceeds from issuance of common units | 33,700 | — | 33,700 | — | |||||||||||
Proceeds from long-term debt | 35,000 | 5,000 | 40,000 | 10,000 | |||||||||||
Repayments of long-term debt | (41,000 | ) | (9,825 | ) | (57,342 | ) | (18,902 | ) | |||||||
Net cash provided by (used in) financing activities | 19,459 | (12,191 | ) | (856 | ) | (23,375 | ) | ||||||||
Effect of exchange rates on cash | (56 | ) | 114 | 49 | 439 | ||||||||||
Net change in cash and cash equivalents | 3,012 | 1,304 | (4,509 | ) | (604 | ) | |||||||||
Cash and cash equivalents – beginning of period | 4,184 | 8,592 | 11,705 | 10,500 | |||||||||||
Cash and cash equivalents – end of period | $ | 7,196 | $ | 9,896 | $ | 7,196 | $ | 9,896 |
USD Partners LP | ||||||||
Consolidated Balance Sheets | ||||||||
(unaudited) | ||||||||
June 30, | December 31, | |||||||
2017 | 2016 | |||||||
ASSETS | (in thousands) | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 7,196 | $ | 11,705 | ||||
Restricted cash | 5,861 | 5,433 | ||||||
Accounts receivable, net | 4,800 | 4,321 | ||||||
Accounts receivable — related party | — | 219 | ||||||
Prepaid expenses | 9,372 | 10,325 | ||||||
Other current assets | 5,361 | 2,562 | ||||||
Total current assets | 32,590 | 34,565 | ||||||
Property and equipment, net | 148,626 | 125,702 | ||||||
Intangible assets, net | 105,615 | 111,919 | ||||||
Goodwill | 33,589 | 33,589 | ||||||
Other non-current assets | 182 | 192 | ||||||
Total assets | $ | 320,602 | $ | 305,967 | ||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 976 | $ | 2,221 | ||||
Accounts payable and accrued expenses — related party | 419 | 214 | ||||||
Deferred revenue, current portion | 25,167 | 26,928 | ||||||
Deferred revenue, current portion — related party | 5,481 | 4,292 | ||||||
Other current liabilities | 2,904 | 3,513 | ||||||
Total current liabilities | 34,947 | 37,168 | ||||||
Long-term debt, net | 204,196 | 220,894 | ||||||
Deferred revenue, net of current portion | — | 264 | ||||||
Deferred income tax liability, net | 1,153 | 823 | ||||||
Total liabilities | 240,296 | 259,149 | ||||||
Commitments and contingencies | ||||||||
Partners’ capital | ||||||||
Common units | 136,838 | 122,802 | ||||||
Class A units | 1,416 | 1,811 | ||||||
Subordinated units | (58,378 | ) | (76,749 | ) | ||||
General partner units | 88 | 111 | ||||||
Accumulated other comprehensive income (loss) | 342 | (1,157 | ) | |||||
Total partners’ capital | 80,306 | 46,818 | ||||||
Total liabilities and partners’ capital | $ | 320,602 | $ | 305,967 |
USD Partners LP | ||||||||||||||||
GAAP to Non-GAAP Reconciliations | ||||||||||||||||
For the Three and Six Months Ended June 30, 2017 and 2016 | ||||||||||||||||
(unaudited) | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in thousands) | ||||||||||||||||
Net cash provided by operating activities | $ | 9,256 | $ | 13,354 | $ | 22,071 | $ | 22,578 | ||||||||
Add (deduct): | ||||||||||||||||
Amortization of deferred financing costs | (215 | ) | (215 | ) | (430 | ) | (430 | ) | ||||||||
Deferred income taxes | (249 | ) | 50 | (307 | ) | 96 | ||||||||||
Changes in accounts receivable and other assets | 3,180 | 467 | 1,353 | (1,507 | ) | |||||||||||
Changes in accounts payable and accrued expenses | 1,486 | 1,105 | 1,086 | 1,937 | ||||||||||||
Changes in deferred revenue and other liabilities | 1,400 | (1,557 | ) | 2,520 | (2,100 | ) | ||||||||||
Change in restricted cash | 209 | (1,793 | ) | 230 | 633 | |||||||||||
Interest expense, net | 2,513 | 2,533 | 5,116 | 4,716 | ||||||||||||
Provision for (benefit from) income taxes | (2,434 | ) | 1,917 | (1,249 | ) | 3,714 | ||||||||||
Foreign currency transaction gain (1) | (100 | ) | (15 | ) | (70 | ) | (145 | ) | ||||||||
Deferred revenue associated with minimum monthly commitment fees (2) | 62 | 424 | 142 | 1,187 | ||||||||||||
Adjusted EBITDA | 15,108 | 16,270 | 30,462 | 30,679 | ||||||||||||
Add (deduct): | ||||||||||||||||
Cash paid for income taxes (3) | (798 | ) | (1,486 | ) | (1,414 | ) | (3,196 | ) | ||||||||
Cash paid for interest | (2,575 | ) | (2,180 | ) | (4,937 | ) | (3,987 | ) | ||||||||
Maintenance capital expenditures | (72 | ) | (18 | ) | (198 | ) | (18 | ) | ||||||||
Distributable cash flow | $ | 11,663 | $ | 12,586 | $ | 23,913 | $ | 23,478 | ||||||||
(1) | Represents foreign exchange transaction gains and losses associated with activities between the Partnership's U.S. and Canadian subsidiaries. | |||||||||||||||
(2) | Represents deferred revenue associated with minimum monthly commitment fees in excess of throughput utilized, which fees are not refundable to the Partnership's customers. Amounts presented are net of: (a) the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue; (b) revenue recognized in the current period that was previously deferred; and (c) expense recognized for previously prepaid Gibson pipeline fees, which correspond with the revenue recognized that was previously deferred. | |||||||||||||||
(3) | Includes amounts we received as a partial refund of approximately $0.7 million (representing C$0.9 million) for our 2015 foreign income taxes. |
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