Hi-Crush Partners LP — Q2 2019 Earnings Presentation
25 slides from Hi-Crush Partners LP's earnings presentation, Aug 7, 2019
Slide 1: Hi-Crush, Inc. Investor Presentation August 2019
Hi-Crush, Inc. NYSE: HCR Investor Presentation August 2019
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures Forward-Looking Statements and Cautionary Statements Some of the information in this presentation 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 Exc
Slide 3: The Hi-Crush Value Proposition
The Hi-Crush Value Proposition Investor value creation Leading customer service delivering reliability, safety and efficiency Financial discipline focused on flexibility and efficient capital allocation Fully-integrated platform to most efficiently service customers Supplier of essential products an
Slide 4: Our Financial Priorities
Our Financial Priorities What We’re Focused On Maximizing Investment Returns Generating free cash flow and Executing strategy through operational excellence strategic value and leveraging existing asset base and capabilities Free Cash Flow Generation Expecting positive free cash Strong base of c
Slide 5: Our Fully-Integrated Platform
Our Fully-Integrated Platform Customer Solutions Logistics & Equipment Flexible solutions utilizing silos and containers Technology PropDispatch: Real-time logistics and inventory management Terminal Network Owned & operated In-Basin Northern White Production facilities Production facilities Fully-I
Slide 6: Operational Structure
Operational Structure Our structure gives us the ability to directly address specific customer needs with fit-for-purpose solutions Proppant Management, Logistics Dispatch and Inventory Monitoring Software PRONGHORN Energy Services Sand Supply and In-Basin Distribution Logistics and Equipment Sales
Slide 7: Business Update
Business Update 7
Slide 8: Latest Business Updates
Latest Business Updates Liquidity and Cash Flow Last Mile $112.0mm in cash and available liquidity Loads up 36% in 2Q19 vs. 1Q19; 21 exiting 2Q19; generated $5.8mm of free systems deployed at the end of 2Q19; cash flow in 2Q19 operating as Pronghorn Energy Services Adjusted EBITDA E&P Relationships
Slide 9: Sustainable Capital Position
Sustainable Capital Position Balance sheet flexibility enables Hi-Crush to address changing market dynamics and opportunities Strong Supportive Flexible Cash & liquidity Capital position Balance sheet $112.0mm1 No $443.2mm / $390.4mm1 Total Liquidity Maintenance Covenants Total / Net Debt $52.8mm1 N
Slide 10: Current Debt Structure
Current Debt Structure Senior Notes ABL Facility $450mm $200mm $397.2mm net of cash1 $59.2mm of availability2 No maturities until August 2026 No borrowings No near-term maturities Highly flexible balance Supports efficient or covenant restrictions sheet position capital allocation 1) Cash balance of
Slide 11: Capital Return via Stock Repurchases
Capital Return via Stock Repurchases • Stock repurchase program approved for up to $25 million $3.2mm • Effective through June 30, 2020 completed to date1 Supported by… Balance Sheet Strength Ongoing Confidence in Strategy $112.0mm total liquidity2 Leading proppant logistics solutions No borro
Slide 12: Corporate Conversion Process is Complete
Corporate Conversion Process is Complete Conversion to C-Corporation completed on May 31, 2019 Simplify Current Corporate Structure Remove structural hurdles to conversion and align interests of management and the unitholders Determine Optimal Conversion Structure Due diligence to determine how to e
Slide 13: E&P Customer Benefits of Aligning with Hi-Crush
E&P Customer Benefits of Aligning with Hi-Crush Aligning with Hi-Crush supports enhanced operations and efficiency Dedicated frac sand Reliable supply from Diversified across regions provider with sand, multiple frac sand from operations in multiple silos and containers production facilities basins
Slide 14: Hi-Crush Benefits of Aligning with E&P Customers
Hi-Crush Benefits of Aligning with E&P Customers Relationship Driven Long project lead times and significant capital 66% requirements drive E&Ps to value strategic of quarterly sales volumes in 2Q19 relationships with suppliers who offer sold to E&P customers differentiated solutions 66% 63% Better
Slide 15: PropDispatch: Real-Time Logistics Management
PropDispatch: Real-Time Logistics Management Advancing our last mile platform with best in class technology PropDispatch Software • Manages and displays on-pad inventory, in containers or silos, to accurately provide volume delivered downhole and minimize or eliminate trucking demurrage • Enables di
Slide 16: Driving Efficiency Through Technology & Equipment
Driving Efficiency Through Technology & Equipment Meaningful opportunities exist to capture efficiencies that lead to lowest cost at the blender Dispatch to Load Time at Travel Time to Unload Time at Load Time Origin Destination Destination Creates significant logistics Flexible selection of equ
Slide 17: Financial & Operating Outlook
Financial & Operating Outlook Guidance Metric Guidance Value Period Quarterly sales volumes 2.4 – 2.7mm tons Q3 2019 DD&A expense $14.5 – $15.5mm Q3 2019 G&A expense $11.5 – $12.5mm Q3 2019 Maintenance capex $6 – $8mm 2H 2019 Growth capex $10 – $15mm 2H 2019 U.S. federal cash taxes None FY 2019 – 20
Slide 18: Fulfilling Our Corporate Responsibilities
Fulfilling Our Corporate Responsibilities From our CEO Evidence of Our Commitment “The most important asset at Hi-Crush Behavior-based safety program is our people. Ensuring the health and ingrained in all aspects of our safety of our workers is a core culture across mine and logistics element of ou
Slide 19: Focused on a Rich Set of Corporate Values
Focused on a Rich Set of Corporate Values Environment Governance and Ethics Water quality and usage Governance Air quality Ethics Energy usage and GHG emissions Regulatory & legal environment management Waste disposal and recycling Critical risk management Light pollution People
Slide 20: Appendix
Appendix 20
Slide 21: Key Financial Metrics
Key Financial Metrics $ in 000s, except per ton Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Revenues $ 248,520 $ 213,972 $ 162,235 $ 159,910 $178,001 Adjusted EBITDA1 $ 81,636 $ 52,048 $ 14,889 $ 17,224 $24,055 Average selling price ($/ton) $ 70 $ 64 $ 58 $ 48 $47 Sales volumes (tons) 3,037,504 2,775,36
Slide 22: Q2 2019: Summary – Statements of Operations
Q2 2019: Summary – Statements of Operations Unaudited Quarterly Consolidated Statements of Operations (Amounts in thousands, except per unit amounts) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Revenues $ 248,520 $ 213,972 $ 162,235 $ 159,910 $ 178,001 Cost of goods sold (excluding depreciation, depleti
Slide 23: Q2 2019: EBITDA, Adjusted EBITDA and Free Cash Flow
Q2 2019: EBITDA, Adjusted EBITDA and Free Cash Flow Unaudited EBITDA and Adjusted EBITDA (Amounts in thousands) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Reconciliation of Adjusted EBITDA to net income (loss): Net income (loss) $ 66,956 $ 27,138 $ (9,930) $ (6,207) $ (117,484) Depreciation and depleti
Slide 24: Solid Balance Sheet
Solid Balance Sheet Strong liquidity and financial flexibility No debt payments before 2026 and no maintenance covenants $ in 000s March 31, 2019 June 30, 2019 Cash $ 60,404 $ 52,853 ABL Facility - - Senior unsecured notes1 440,935 441,244 Other notes payable 3,113 1,997 Total debt $ 444,048 $ 443,2
Slide 25: Investor Contacts
Investor Contacts Caldwell Bailey Lead Analyst, Investor Relations Marc Silverberg Managing Director (ICR, Inc.) Phone: (713) 980-6270 E-mail: ir@hicrush.com 25