Calumet Specialty Products Partners LP (NASDAQ:CLMT) Q3 2018 Earnings Conference Call Transcript

Nov 09, 2018 • 09:00 am ET

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Calumet Specialty Products Partners LP (NASDAQ:CLMT) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2018 Calumet Specialty Products Partners, L.P. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference may be recorded.

I would like to introduce your host for today's conference, Mr. Joe Caminiti with IR. Sir, please go ahead.

Executive
Joe Caminiti

Good morning, everyone, and thank you for joining us today for our third quarter earnings results call. With us on today's call are Tim Go, CEO; West Griffin, CFO; and Bruce Fleming, EVP of Strategy and Growth.

(Forward-Looking Cautionary Statements)

And as a reminder, you may now download a PDF of the presentation slides that accompany the remarks made on today's conference call as indicated in the press release we issued earlier today. You may access these slides in the Investor Relations section of our website at calumetspecialty.com.

Also, a webcast replay of this call will be available on our site within a few hours, and you can contact Alpha IR Group for Investor Relations support at 312-445-2870.

With that, please turn to slide three as I pass the call to Tim Go. Tim?

Executive
Tim Go

Good morning everyone, and thank you for joining us. As you can see in the chart on the bottom of slide three, our string of seven quarters in a row with improved quarterly EBITDA growth year-over-year came to an end, primarily due to planned downtime across our facilities as we completed the heaviest portion of our turnaround activity for 2018. The planned downtime decreased our production and sales volume across both Specialty and Fuels, which negatively impacted EBITDA.

Calumet generated total adjusted EBITDA of $54.3 million for the most recent quarter. Excluding special items such as the LCM adjustment, ERP expenses and realized hedging losses, our adjusted EBITDA results were $60 million compared to pro forma third quarter results one year ago of $63.7 million.

At the company level, our results benefited from widening crude differentials year-over-year but were more than offset by declining crack spreads and the impacts associated with the planned downtime. Our Princeton Naphthenic Base Oil facility had roughly 40 days of maintenance on the lubes hydrofiner and our Great Falls fuels refinery had roughly 32 days of maintenance at the cat unit and the alky unit.

On a GAAP basis, our net loss from continuing operations was $16 million or $0.20 per common unit. It should be noted that this loss included non-cash, unrealized net loss associated with the mark-to-market provision of our inventory financing agreement. Excluding this and the previously mentioned special items, net loss would have been $1.5 million or a net loss per common unit of $0.02.

Our self-help program continues to improve our overall business performance, and during the third quarter, we were able to capture an additional $10.8 million in EBITDA, which I will cover later in the call. Our self-help program has had a