Hi-Crush Partners LP (NYSE:HCLP) Q2 2017 Earnings Conference Call - Preliminary Transcript

Aug 03, 2017 • 08:30 am ET


Hi-Crush Partners LP (NYSE:HCLP) Q2 2017 Earnings Conference Call - Preliminary Transcript


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Good morning, and welcome to the Hi-Crush Second Quarter 2017 Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation.

At this time for opening remarks and introductions, I would like to turn the call over to Duane Scardino, Corporate Development Manager of Hi-Crush. Please proceed.

Duane Scardino

Thank you. Good morning, everyone, and thank you for joining us today. With me are Bob Rasmus, Chief Executive Officer of Hi-Crush; and Laura Fulton, Chief Financial Officer. Before we provide our prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements which are subject to certain risks and uncertainties. Actual results could differ materially from those projected in any forward-looking statements. Additionally, we may refer to non-GAAP measures of EBITDA, adjusted EBITDA, distributable cash flow and contribution margin during the call. Please refer to our public filings for definitions of our non-GAAP measures and the reconciliations of these measures to net income as well as a discussion of risks and uncertainties.

With that, I would now like to turn the call over to our CEO, Bob Rasmus. Bob?

Robert Rasmus

Thanks, Duane, and thanks to everyone for joining us on the call this morning. There is a lot going on in the sand industry and at Hi-Crush, so like last quarter we may spend more time than usual on our prepared remarks.

Our second quarter played out just as we expected regarding the guidance we gave you in May. I am very proud of our teams hard work and results reflected in our quarterly performance, which Laura will review in more detail later in our call.

Last quarter, we spend quite a bit of time discussing nameplate capacity, available capacity and effective capacity in an effort to put supply at sand in perspective. This quarter we will review the logistics associated with moving this massive volumes of sand efficiently. We will also give our outlook for the third quarter at the end of the prepared remarks.

But first, I have to highlight the big announcement in our release we issued last night, the completion of construction of our Kermit in-basin sand facility and first delivery to customers earlier this week. This is a huge milestone for us and the industry and marks the first delivery of in-basin sand in the Permian.

At the time of the acquisition in February, we had announced our expectations to complete construction of the industry's first in-basin facility by late third or early fourth quarter 2017. In mid-July, we successfully completed construction of Kermit's wet plant with the purpose built plant to add line for the last few weeks, we have been fine-tuning the plant to ensure maximum efficiencies once fully operational and we have been building a stockpile of inventory.

Last week we completed construction of the dry plant at Kermit and on Monday we started loading trucks with sand sold to customers. This is