Hi-Crush Partners LP (NYSE:HCR) Q3 2019 Earnings Conference Call Transcript
Nov 06, 2019 • 09:00 am ET
Good morning, and welcome to the Hi-Crush, Inc., Third Quarter 2019 Conference Call. [Operator Instructions]
Now, for opening remarks and introductions, I would like to turn the call over to Caldwell Bailey, Investor Relations Manager of Hi Crush. Please go ahead.
Thank you. Good morning, everyone, and thanks for joining us today.
With me are Bob Rasmus, Chairman and Chief Executive Officer of Hi-Crush, Inc.; Alan Oehlert, Chief Operating Officer; 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, free cash flow and contribution margin during the call. Please refer to our public filings for definitions of our non-GAAP measures and reconciliation 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.
Robert E. Rasmus
Thanks, Caldwell, and thank you to everyone for joining us this morning.
The third quarter played out as anticipated, with relatively strong activity in July and August, followed by a slowdown that began in September. For the quarter, we hit the high end of our previously issued guidance range for sales volumes, and utilization of our last mile crews remained strong, as evidenced by an increase in the total number of truckloads delivered. We achieved our operational and financial results in an environment that was and remains challenging, as evidenced by decreased rig count and well completions activity.
The non-cash impairments, which we recorded during the quarter and which Laura will talk about later, reflect the reality that the industry is undergoing a drastic change. The market is oversupplied and will be rationalized, whether through attrition and/or consolidation. As a result, we are acutely focused on remaining disciplined and controlling what we can control: operational execution; cost takeout in both SG&A and supplier cost; reducing spending, including CapEx; maintaining cash and free cash flow generation. Unlike some of our competitors, we prioritize profit over market share and shaping a business that will produce sustainable, consistent returns for our investors.
Hi-Crush remains well positioned to succeed even during periods like we are seeing today due primarily to focusing on three key priorities: leveraging our integrated portfolio of assets to deliver high quality customer service, improving profitability through operational optimization and cost reduction and combining those two with prudent capital allocation. We have built Hi-Crush for the long term and are uniquely positioned to come out the other side of this cycle stronger due to the knowledge we have gained as a long-time player and service provider in the frac sand industry. We've seen cycles before and we've proven our ability to remain flexible and ahead of the curve and responding to them.
Our strategic focus on logistics last