Hi-Crush Partners LP: Hi-Crush Partners LP Reports Third Quarter 2013 Results

Hi-Crush Partners LP: Hi-Crush Partners LP Reports Third Quarter 2013 Results

News Release

           Hi-Crush Partners LP Reports Third Quarter 2013 Results

Houston, Texas,  November  6,  2013  -  Hi-Crush  Partners  LP  (NYSE:  HCLP), 
"Hi-Crush" or the  "Partnership", today reported  third quarter results.  Net 
income was $15.0  million, or $0.52  per limited partner  unit, for the  third 
quarter of 2013 and $40.5 million, or $1.45 per limited partner unit, for  the 
nine months ended September 30, 2013. 

The Partnership reported earnings before interest, taxes and depreciation  and 
amortization ("EBITDA") of  $19.2 million for  the third quarter  of 2013  and 
$47.0 million  for the  nine  months ended  September  30, 2013.  EBITDA  was 
impacted by  an estimated  $1.5 million  due  to delays  in volumes  taken  by 
contract customers at  the end  of the  quarter, as  well as  $1.1 million  of 
litigation costs and non-cash inventory  costs related to the D&I  acquisition 
that are not expected to reoccur in the fourth quarter.

The Partnership's distributable  cash flow for  the third quarter  of 2013  of 
$17.6 million corresponds  to distribution  coverage of 1.24  times the  total 
$14.1 million in total distributions to be paid on November 15, 2013.

"We are seeing the benefits of the D&I acquisition flow through our results as
we sold over 530,000 tons of frac sand in the third quarter and increased  the 
number of customers we are  serving to more than 25.  We were also excited  to 
announce the  amicable settlement  of  the Baker  Hughes litigation  in  early 
October and, in  connection with  the settlement,  the entry  into a  six-year 
supply agreement with Baker Hughes." said James M. Whipkey, Co-Chief Executive
Officer of  Hi-Crush. "During  the quarter,  our Wyeville  plant operated  at 
close to  nameplate  capacity and  began  producing 100-mesh  sand.  With  our 
distribution network,  we see  many opportunities  ahead to  increase  volumes 
across our consolidated company."

Revenues for the  quarter ended September  30, 2013 totaled  $43.5 million  on 
sales of  533,239 tons  of frac  sand and  transload services.   The  average 
selling price of frac sand, reflecting the mix between pricing for delivery at
the production facility and at the destination, was $73 per ton.  

"New technology  continues to  drive  demand for  high quality  proppant  ever 
higher." said Robert E. Rasmus, Co-Chief Executive Officer of Hi-Crush. "With
our low-cost operations, strategic niche in the Marcellus and Utica, and broad
logistics capabilities, we  are well-positioned  to continue  to increase  our 
market share."  Production cost  for  sand produced  and delivered  from  the 
Wyeville facility was $13.10 per ton during the quarter.

On October 17, 2013, Hi-Crush declared its third quarter cash distribution  of 
$0.49 per  unit  for  all  common  and subordinated  units,  or  $1.96  on  an 
annualized basis. This amount corresponds to  a 3% increase from the  minimum 
quarterly cash distribution of $0.475 per  unit, and will be paid on  November 
15, 2013 to all common and  subordinated unitholders of record on November  1, 
2013.

Conference Call

A conference call for investors will be held on Wednesday, November 6, 2013 at
9:00 a.m. Central Time (10:00 a.m.  Eastern Time) to discuss Hi-Crush's  third 
quarter results  and forward  outlook. Hosting  the call  will be  Robert  E. 
Rasmus, Co-Chief  Executive  Officer,  James M.  Whipkey,  Co-Chief  Executive 
Officer and Laura C. Fulton, Chief Financial Officer.

The call can be accessed live over the telephone by dialing (877) 407-3982, or
for international callers, (201) 493-6780. A replay will be available shortly
after the  call  and  can  be  accessed by  dialing  (877)  870-5176,  or  for 
international callers (858) 384-5517. The passcode for the replay is 10000594.
The replay will be available until November 20, 2013.

Interested parties may also listen to a simultaneous webcast of the conference
call by  logging onto  Hi-Crush's website  at www.hicrushpartners.com  in  the 
Investors-Event Calendar and  Presentations section. A  replay of the  webcast 
will also be available for approximately 30 days following the call.

The slide presentation to be referenced on the call will also be on Hi-Crush's
website  at  www.hicrushpartners.com  in  the  Investors-Event  Calendar   and 
Presentations section.

Non-GAAP Financial Measures

This  news  release  and  the  accompanying  schedules  include  the  non-GAAP 
financial measure of  EBITDA, Distributable  Cash Flow  and Production  Costs, 
which may be  used periodically  by management when  discussing our  financial 
results with investors and analysts. The accompanying schedules of this  news 
release provide reconciliations of these non-GAAP financial measures to  their 
most directly  comparable  financial  measures  calculated  and  presented  in 
accordance with generally accepted accounting principles in the United  States 
of America ("GAAP"). EBITDA, Distributable Cash Flow and Production Costs are
presented as  management believes  the data  provides a  measure of  operating 
performance  that  is  unaffected  by  historical  cost  basis  and   provides 
additional  information  and  metrics  relative  to  the  performance  of  our 
business.

About Hi-Crush

Hi-Crush is an integrated producer,  transporter, marketer and distributor  of 
high-quality monocrystalline  and, a  specialized mineral  that is  used as  a 
"proppant" (frac sand) to enhance the recovery rates of hydrocarbons from  oil 
and natural gas wells. Our reserves, which are located in Wyeville, Wisconsin,
consist of  "Northern White"  sand, a  resource that  exists predominately  in 
Wisconsin and  limited portions  of the  upper Midwest  region of  the  United 
States. Hi-Crush owns  and operates  the largest distribution  network in  the 
Marcellus and Utica shales, and has distribution capabilities throughout North
America. For more information, visit www.hicrushpartners.com.

Forward-Looking Statements

Some of  the information  in  this news  release may  contain  forward-looking 
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E  of the Securities Exchange  Act of 1934, as  amended 
(the  "Exchange   Act").   Forward-looking  statements   give   our   current 
expectations, and contain projections of results of operations or of financial
condition, or  forecasts of  future  events. Words  such as  "may,"  "assume," 
"forecast," "position,"  "predict,"  "strategy," "expect,"  "intend,"  "plan," 
"estimate,"   "anticipate,"   "could,"    "believe,"   "project,"    "budget," 
"potential," or  "continue,"  and similar  expressions  are used  to  identify 
forward-looking statements. They  can be  affected by assumptions  used or  by 
known or  unknown risks  or uncertainties.  Consequently, no  forward-looking 
statements  can  be  guaranteed.   When  considering  these   forward-looking 
statements, you should  keep in  mind the  risk factors  and other  cautionary 
statements in  Hi-Crush's  reports  filed with  the  Securities  and  Exchange 
Commission ("SEC"), including those described under 1A of Hi-Crush's Form 10-K
for the year ended December 31, 2012 and any subsequently filed 10-Q.  Actual 
results may vary materially. You are cautioned not to place undue reliance  on 
any forward-looking statements.  You should  also understand that  it is  not 
possible to predict or identify all  such factors and should not consider  the 
risk factors in our reports filed with the  SEC or the following list to be  a 
complete statement of  all potential  risks and  uncertainties. Factors  that 
could  cause  our  actual  results  to  differ  materially  from  the  results 
contemplated by such  forward-looking statements include:  the volume of  frac 
sand we are able to sell;  the price at which we  are able to sell frac  sand; 
the outcome of any pending litigation;  changes in the price and  availability 
of natural gas or electricity; changes in prevailing economic conditions;  and 
difficulty  collecting  receivables.   All  forward-looking  statements   are 
expressly qualified in their entirety by the foregoing cautionary  statements. 
Hi-Crush's forward-looking  statements speak  only as  of the  date made  and 
Hi-Crush undertakes  no obligation  to update  or revise  its  forward-looking 
statements,  whether  as  a  result  of  new  information,  future  events  or 
otherwise.

Investor contact:
Investor Relations
ir@hicrushpartners.com
(713) 960-4811

Unaudited Condensed Consolidated Statement of Operations
(Amounts in thousands, except tons, units and per unit amounts)



                                                   Period from   Period from
                                  Three Months      August 16      July 1
                                      Ended          Through       Through
                                  September 30,     September    August 15,
                                      2013          30, 2012        2012
                                    Successor       Successor    Predecessor
Revenues                       $          43,515 $      12,643 $      12,601
Cost of goods sold (including
depreciation, depletion, and
amortization)                             25,958         2,832         3,065
    Gross profit                          17,557         9,811         9,536
Operating costs and expenses:
    General and administrative             5,030           592         1,494
    Exploration expense                        -            27           120
    Accretion of asset
    retirement obligation                     29             3             4
              Income from
              operations                  12,498         9,189         7,918
Other income (expense):
    Income from preferred
    interest in Hi-Crush
    Augusta LLC                            3,750             -               -
    Other income                               -             -               6
    Interest expense                     (1,208)          (80)           (855)
              Net income     $            15,040 $       9,109 $        7,069
Net income per limited
partner unit:
    Common units - basic and
    diluted                   $             0.52 $        0.33
    Subordinated units -
    basic and diluted         $             0.52 $        0.33
Weighted average limited
partner units outstanding:
    Common units - basic and
    diluted                           15,224,820    13,640,351
    Subordinated units -
    basic and diluted                 13,640,351    13,640,351

Unaudited Condensed Consolidated Statement of Operations
(Amounts in thousands, except tons, units and per unit amounts)



                                                   Period from   Period from
                                   Nine Months      August 16     January 1
                                      Ended          Through       Through
                                  September 30,     September    August 15,
                                      2013          30, 2012        2012
                                    Successor       Successor    Predecessor
Revenues                       $          90,244 $      12,643 $      46,776
Cost of goods sold (including
depreciation, depletion, and
amortization)                             43,325         2,832        13,336
    Gross profit                          46,919         9,811        33,440
Operating costs and expenses:
    General and administrative            11,596           592         4,631
    Exploration expense                       46            27           539
    Accretion of asset
    retirement obligation                     88             3            16
              Income from
              operations                  35,189         9,189        28,254
Other income (expense):
    Income from preferred
    interest in Hi-Crush
    Augusta LLC                            7,500             -               -
    Other income                               -             -               6
    Interest expense                     (2,185)          (80)         (3,240)
              Net income     $            40,504 $       9,109 $       25,020
Net income per limited
partner unit:
    Common units - basic and
    diluted                   $             1.45 $        0.33
    Subordinated units -
    basic and diluted         $             1.45 $        0.33
Weighted average limited
partner units outstanding:
    Common units - basic and
    diluted                           14,293,060    13,640,351
    Subordinated units -
    basic and diluted                 13,640,351    13,640,351

Unaudited EBITDA and Distributable Cash Flow



                   2013               2012               2013               2012
                                            Period                                Period
                             Period from     from                  Period from     from
                   Three                                 Nine
                  Months       July 1      August 16    months      January 1    August 16
                   Ended       Through      Through      Ended       Through      Through
                 September                 September   September                 September
                    30        August 15       30          30        August 15       30
(in thousands)   Successor   Predecessor   Successor   Successor   Predecessor   Successor
Reconciliation
of
Distributable
Cash Flow to
Net Income:
 Net income    $    15,040 $       7,069 $     9,109 $    40,504 $      25,020 $     9,109
 Depreciation
 and
 depletion
 expense             1,322           421         395       2,317         1,089         395
 Amortization
 expense             1,662             -           -       2,025             -           -
 Interest
 expense             1,208           855          80       2,185         3,240          80
EBITDA         $    19,232 $       8,345 $     9,584 $    47,031 $      29,349 $     9,584
 Less: Cash
 interest paid     (1,119)                      (43)     (1,744)                      (43)
 Less:
 Maintenance
 and
 replacement
 capital
 expenditures,
 including
 accrual for
 reserve
 replacement
 (1)                 (541)                     (258)     (1,447)                     (258)
 Add:
 Accretion of
 asset
 retirement
 obligation             29                         3          88                         3
 Add:
 Quarterly
 distribution
 from
 preferred
 interest in
 Augusta (2)             -                         -       3,750                         -
Distributable
cash flow      $    17,601               $     9,286 $    47,678               $     9,286
1.Maintenance and replacement capital expenditures, including accrual for reserve
    replacement, were determined based on an estimated reserve replacement cost of $1.35
    per ton sold during the period. 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.
2.The amount pertains to the third quarter performance of Augusta, on which we are
    entitled to receive a preferred distribution of $3,750. We have included this amount
    in our distributable cash flow for the first nine months of 2013 as we will receive
    this distribution on November11, 2013, in advance of our third quarter 2013 cash
    distributions to our common and subordinated unitholders, which will be paid on
    November 15, 2013. The amount is not reflected in our GAAP net income during the first
    nine months of 2013 because our investment in Augusta is accounted for under the cost
    method. In accordance with that method, any distributions earned under our preferred
    interest are not recognized as income until the cash is actually received by the
    Partnership.

Unaudited Condensed Consolidated Cash Flow Information
(Amounts in thousands)



                                                Period from      Period from
                                Nine Months      August 16        January 1
                                   Ended          Through          Through
                               September 30,   September 30,
                                   2013            2012        August 15, 2012
                                 Successor       Successor       Predecessor
Depreciation, depletion, and
amortization                 $         4,342 $           395 $           1,089
Operating activities                  43,728           6,691            16,660
Investing activities               (137,631)           (100)          (80,045)
Financing activities                 103,427         (5,131)            61,048
Net increase (decrease) in
cash                                   9,524           1,460           (2,337)

Unaudited Condensed Consolidated Balance Sheet
(Amounts in thousands)



                                                  September 30,   December 31,
                                                      2013            2012
                                                    Successor      Successor
Assets
Current assets:
    Cash                                        $        20,022 $       10,498
    Restricted cash                                         689              -
    Accounts receivable                                  23,127          8,199
    Inventories                                          15,230          3,541
    Due from Sponsor                                          -          5,615
    Prepaid expenses and other current assets             1,615            393
           Total current assets                          60,683         28,246
Property, plant and equipment, net                      112,290         72,844
Goodwill and intangible assets, net                      73,598              -
Preferred interest in Hi-Crush Augusta LLC               47,043              -
Other assets                                              2,926          1,095
           Total assets                         $       296,540 $      102,185
Liabilities and Partners' Capital
Current liabilities:
    Accounts payable                            $         8,011 $        1,977
    Accrued and other current liabilities                 4,369          1,755
    Due to Sponsor                                        1,212              -
    Deferred revenue                                          -          1,715
           Total current liabilities                     13,592          5,447
    Long-term debt                                      138,250              -
    Asset retirement obligation                           1,643          1,555
           Total liabilities                            153,485          7,002
Commitments and contingencies                                 -              -
Partners' capital:
    General partner interest                                  -              -
    Limited partner interests, 28,865,171 and
    27,280,702 units outstanding, respectively          133,512         95,183
    Class B units, 3,750,000 and zero units
    outstanding, respectively                             9,543              -
           Total partners' capital                      143,055         95,183
           Total liabilities and partners'
           capital                              $       296,540 $      102,185

Unaudited Production Cost per Ton



                                                Period from      Period from
                              Three Months       August 16         July 1
                                 Ended            Through          Through
                             September 30,     September 30,
                                  2013             2012        August 15, 2012
                               Successor         Successor       Predecessor
Sand produced and
delivered (tons)                     400,814          191,446          186,957
Production costs ($ in
thousands)                    $    5,250   $    2,437   $    2,644
Production costs per ton      $    13.10   $    12.73   $    14.14



                                                Period from      Period from
                              Nine Months        August 16        January 1
                                 Ended            Through          Through
                             September 30,     September 30,
                                  2013             2012        August 15, 2012
                               Successor         Successor       Predecessor
Sand produced and
delivered (tons)                   1,071,706          191,446          726,213
Production costs ($ in
thousands)                     $   15,517   $    2,437    $   12,247
Production costs per ton      $    14.48   $    12.73   $    16.86

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Source: Hi-Crush Partners LP via Thomson Reuters ONE
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