Hi-Crush Partners LP (NYSE:HCLP) Q1 2019 Earnings Conference Call Transcript

May 08, 2019 • 08:30 am ET


Hi-Crush Partners LP (NYSE:HCLP) Q1 2019 Earnings Conference Call Transcript


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Good morning, and welcome to Hi-Crush First Quarter 2019 Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. A 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 Mr. Caldwell Bailey, Lead Investor Relations Analyst of Hi-Crush. Thank you sir. You may begin.

Caldwell Bailey

Thank you. Good morning, everyone and thanks for joining us today. With me are Bob Rasmus, Chief Chairman and 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 the 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 reconciliation of these measures to their most directly comparable GAAP measures 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?

Bob Rasmus

Thanks, Caldwell and thank you to everyone for joining us this morning. Macro conditions for the first quarter improved overall versus the end of 2018 as oil and gas prices climbed from their December lows and remain at constructive levels today. However, the completions' backdrop remain challenging as the restart of activity across much of our footprint came back slower than anticipated, and operators remained focused on capital discipline.

Regardless of near-term conditions, the first quarter was a crucial period for Hi-Crush, one in which we remained focused on what we could control within our plan. Our strategy has been consistent, providing sand and logistics services to the major end-users of sand, the E&Ps. During the first quarter, we continued our track record of completing major capital projects on time and under budget, quickly ramped production from our new capacity, extended our growth with E&Ps and now have also invested in technology that will better enable our operations in the last mile.

Execution here is critical, not just over the near term, but for years to come. Let me start with a quick summary of the two relatively small, but very important and strategic acquisitions we recently completed, the PropDispatch software and Pronghorn Logistics business. Technology has become an important part of our offering helping us and our customers work more efficiently and ultimately, facilitating lower drilling and completion costs and elimination of NPT. Said another way, technology is a key to success in our increasingly service-focused business.

During the first quarter, we acquired BulkTracer Holdings, the owner and developer of technology used in the field for trucking, dispatch and optimization called PropDispatch. This high-return investment further differentiates our last mile service offering. We have used PropDispatch for a