Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 27, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Emerge Energy Services LP | |
Entity Central Index Key | 1,555,177 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 31,033,754 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,116 | $ 5,729 |
Trade and other receivables, net | 56,007 | 56,951 |
Inventories | 19,212 | 27,825 |
Prepaid expenses and other current assets | 9,583 | 6,331 |
Total current assets | 85,918 | 96,836 |
Property, plant and equipment, net | 222,312 | 185,970 |
Intangible assets, net | 61 | 1,664 |
Other assets, net | 21,015 | 24,422 |
Total assets | 329,306 | 308,892 |
Current liabilities: | ||
Accounts payable | 25,465 | 18,819 |
Accrued liabilities | 13,041 | 29,718 |
Less current portion | 10,750 | 0 |
Total current liabilities | 49,256 | 48,537 |
Long-term debt, net of current portion | 187,517 | 176,351 |
Obligation for business acquisition, net of current portion | 3,890 | 5,013 |
Other long-term liabilities | 21,846 | 29,882 |
Total liabilities | 262,509 | 259,783 |
Commitments and contingencies | ||
Partners’ equity: | ||
General partner | 0 | 0 |
Limited partner common units | 66,797 | 49,109 |
Total partners’ equity | 66,797 | 49,109 |
Total liabilities and partners’ equity | $ 329,306 | $ 308,892 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Limited Partners' Capital Account, Units Issued | 31,029,213 | 30,174,940 |
Limited Partners' Capital Account, Units Outstanding | 31,029,213 | 30,174,940 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Income Statement [Abstract] | |||||
Revenues | $ 101,842 | $ 82,602 | $ 208,592 | $ 157,946 | |
Operating expenses: | |||||
Cost of goods sold (excluding depreciation, depletion and amortization) | 72,650 | 71,428 | 152,892 | 143,739 | |
Depreciation, depletion and amortization | 5,355 | 5,675 | 10,216 | 10,331 | |
Selling, general and administrative expenses | 7,390 | 6,850 | 15,961 | 12,728 | |
Contract and project terminations | 0 | 0 | 1,689 | 0 | |
Total operating expenses | 85,395 | 83,953 | 180,758 | 166,798 | |
Operating income (loss) | 16,447 | (1,351) | 27,834 | (8,852) | |
Other expense (income): | |||||
Interest expense, net | 6,736 | 5,082 | 17,228 | 8,280 | |
Other | 230 | (3,008) | (458) | (2,317) | |
Total other expense | 6,966 | 2,074 | 16,770 | 5,963 | |
Income (loss) from continuing operations before provision for income taxes | 9,481 | (3,425) | 11,064 | (14,815) | |
Provision (benefit) for income taxes | 53 | 0 | 150 | 0 | |
Net income (loss) from continuing operations | 9,428 | (3,425) | 10,914 | (14,815) | |
Income (loss) from discontinued operations, net of taxes | 0 | (2,657) | 0 | (2,657) | |
Net income (loss) | $ 9,428 | $ (6,082) | $ 10,914 | $ (17,472) | |
Earnings (loss) per common unit | |||||
Income (Loss) from Continuing Operations, Per Basic Unit | [1] | $ 0.30 | $ (0.11) | $ 0.35 | $ (0.49) |
Income (Loss) from Discontinued Operations, Net of Tax, Per Basic Unit | [1] | 0 | (0.09) | 0 | (0.09) |
Earnings (loss) per unit, basic | [1] | 0.30 | (0.20) | 0.35 | (0.58) |
Income (Loss) from Continuing Operations, Per Diluted Unit | [1] | 0.30 | (0.21) | 0.35 | (0.57) |
Income (Loss) from Discontinued Operations, Net of Tax, Per Diluted Unit | [1] | 0 | (0.09) | 0 | (0.09) |
Earnings Per Share, Diluted | [1] | $ 0.30 | $ (0.30) | $ 0.35 | $ (0.66) |
Weighted average number of common units outstanding - basic | [1] | 31,282,680 | 30,147,725 | 31,248,017 | 30,104,613 |
Weighted average number of common units outstanding - diluted | [1] | 31,439,954 | 30,203,058 | 31,403,282 | 30,296,996 |
[1] | See Note 8. |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PREFERRED UNITS PARTNERS' EQUITY - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands | Total | Limited Partner Common Units |
Balance at Dec. 31, 2017 | $ 49,109 | $ 49,109 |
Increase (Decrease) in partners' capital | ||
Net income | 10,914 | 10,914 |
Equity-based compensation | 860 | 860 |
Issuance of equity | 5,974 | 5,974 |
Other | (60) | (60) |
Balance at Jun. 30, 2018 | $ 66,797 | $ 66,797 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 10,914 | $ (17,472) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation, depletion and amortization | 10,216 | 10,331 |
Equity-based compensation expense | 860 | 677 |
Project and contract termination costs | 1,689 | 0 |
Unrealized (gain) loss on fair value of warrant | (432) | (2,312) |
Write-down of escrow receivable | 0 | 2,657 |
Provision for doubtful accounts | 23 | 0 |
Loss (gain) on disposal of assets | 320 | 79 |
Amortization of debt discount/premium and deferred financing costs | 5,542 | 1,835 |
Unrealized (gain) loss on derivative instruments | 0 | (214) |
Other non-cash charges | 62 | 58 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 926 | (17,437) |
Inventories | 8,613 | (3,816) |
Prepaid expenses and other current assets | (3,252) | 1,748 |
Accounts payable and accrued liabilities | (1,187) | 16,573 |
Other assets | 1,808 | 120 |
Net Cash Provided by (Used in) Operating Activities | 36,102 | (7,173) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (55,806) | (3,403) |
Net proceeds from disposal of assets | 30 | 211 |
Asset acquisition | 0 | (20,430) |
Cash flows from investing activities | (55,776) | (23,622) |
Cash flows from financing activities: | ||
Proceeds from line of credit borrowings | 9,512 | 154,820 |
Proceeds from second lien notes | 175,000 | 39,597 |
Repayment of line of credit borrowings | (150,200) | (158,593) |
Repayment of other long-term debt | (5,882) | 0 |
Payment of business acquisition obligation | (1,345) | (1,799) |
Payment of financing costs | (11,964) | (2,982) |
Other financing activities | (60) | (63) |
Cash flows from financing activities | 15,061 | 30,980 |
Cash and cash equivalents: | ||
Net increase (decrease) | (4,613) | 185 |
Balance at beginning of period | 5,729 | 4 |
Balance at end of period | $ 1,116 | $ 189 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Organization Emerge Energy Services LP (“Emerge”) is a Delaware limited partnership that completed its initial public offering (“IPO”) on May 14, 2013 to become a publicly traded partnership. The combined entities of Superior Silica Sands LLC (“SSS”), a Texas limited liability company and Emerge Energy Services Operating LLC (“Emerge Operating”), a Delaware limited liability company, currently represent Emerge. References to the “Partnership,” “we,” “our” or “us” refer collectively to Emerge and all of its subsidiaries. We are engaged in the business of mining, processing, and distributing silica sand, a key input for the hydraulic fracturing of oil and gas wells. We conduct our operations through our subsidiary SSS, and we believe our Superior Silica Sands brand has name recognition and a positive reputation with our customers. The Sand business conducts mining and processing operations from facilities located in Wisconsin and Texas. In addition to mining and processing silica sand for the oil and gas industry, the Sand business sells its product for use in building products and foundry operations. We previously owned a fuel business that operated transmix processing facilities located in the Dallas-Fort Worth area and in Birmingham, Alabama. The Fuel business also offered third-party bulk motor fuel storage and terminal services, biodiesel refining, sale and distribution of wholesale motor fuels, reclamation services (which consists primarily of cleaning bulk storage tanks used by other petroleum terminal and others) and blending of renewable fuels. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our 2017 Annual Report on Form 10-K. These financial statements include the accounts of all of our subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. |
ASSET ACQUISITION ASSET ACQUISI
ASSET ACQUISITION ASSET ACQUISITION | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
ASSET ACQUISITION | ASSET ACQUISITIONS Oklahoma On May 11, 2018, we signed a 25 -year lease deal for the mining rights to approximately 600 acres located in Kingfisher County, Oklahoma, about 60 miles northwest of Oklahoma City. We have agreed to purchase 40 acres of land adjoining the leased acreage on which to construct wet and dry processing plants expected to have a capacity of 1.5 million tons per year. This facility will serve the Mid-Continent region. We expect to close the transaction and begin construction in the third quarter, with production anticipated to come online by the end of 2018. The site is connected to a highway and has close proximity to railway, which could facilitate product shipment if we choose to develop rail loadout infrastructure. San Antonio On April 12, 2017, we closed the transaction to acquire substantially all of the assets of Materials Holding Company, Inc., Osburn Materials, Inc., Osburn Sand Co. and South Lehr, Inc. for $20 million . The transaction was funded with a $40 million term loan. The San Antonio site is located 25 miles south of San Antonio, Texas, and previously produced and sold construction, foundry and sports sands, but did not serve the energy markets. We upgraded the existing operations for conversion into frac sand production and commenced frac sand production in July 2017. Our San Antonio site’s reserves consist mostly of 40/70 and 100 mesh sands and meet American Petroleum Institute (“API”) specifications for all grades. We early adopted the provisions of Accounting Standards Codification (“ASC”) 805, Business Combinations and Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , in accounting for this transaction. Under this guidance, if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets, the transaction can be accounted for as an asset purchase. Based on our analysis of the transaction, substantially all of the fair value is concentrated in the sand reserves acquired, and thus we accounted for the transaction as an asset purchase. Significant judgment is often required in estimating the fair values of assets acquired. We engaged a third-party valuation specialist in estimating fair values of the assets acquired. We used our best estimates and assumptions to allocate the cost of the acquisition to the assets acquired on a relative fair value basis at the acquisition date. The fair value estimates are based on available historical information and on expectations and assumptions about the future production and sales volumes, market demands, the average selling price of sand, and the discount factor used in estimating future cash flows. While we believe those expectations and assumptions are reasonable, they are inherently uncertain. Transaction costs of $434,000 incurred for the acquisition are capitalized as a component of the cost of the assets acquired. |
OTHER FINANCIAL DATA
OTHER FINANCIAL DATA | 6 Months Ended |
Jun. 30, 2018 | |
Other Financial Data Disclosure [Abstract] | |
OTHER FINANCIAL DATA | OTHER FINANCIAL DATA Adoption of ASC 606, Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers , ASC 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 replaced most existing revenue recognition guidance in United States Generally Accepted Accounting Principles (“GAAP”) when it became effective for fiscal years beginning after December 15, 2017. ASC 606 permits the use of either the retrospective or cumulative effect transition method. We conducted and completed a comprehensive review of contracts and their associated business terms and conditions and performed detailed analyses on the impact of this standard to our contracts. We adopted the new standard on January 1, 2018, using the full retrospective method. Because accounting for revenue under contracts did not materially change for us under the new standard as explained below, prior period consolidated financial statements did not require adjustment. We recognize revenue at a point in time when obligations under the terms of a contract with our customer are satisfied. This occurs with the transfer of control of our products to customers when products are shipped for direct sales to customers or when the product is picked up by a customer either at our plant location or transload location. Our contracts contain one performance obligation which is the delivery of sand to the customer at a point in time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. We recognize the cost for shipping as an expense in cost of sales when control over the product has transferred to the customer. Sales taxes collected concurrently with revenue-producing activities are excluded from revenue. Our sand products are sold to United States and Canada-based customers primarily in the energy industry. Demand for our product is impacted by the economic conditions related to the energy industry, particularly fluctuations in oil and gas prices. This affects the nature, amount, timing and uncertainty of our revenue. Changes in the price of oil and gas relative to other inflationary measures could make our products more or less affordable and therefore affect our sales. We also sell a small quantity of non-frac sand to customers outside the energy industry. Our payment terms vary by type and location of our customers. In most cases, the term between invoicing and the payment due date is 30 days. For certain customers, we require payment before the product is delivered. The following tables present our revenues disaggregated by nature of product for the three and six months ended June 30, 2018 , and 2017 : Three Months Ended June 30, 2018 2017 $ in thousands Tons in thousands $ in thousands Tons in thousands Frac sand revenues $ 100,788 1,519 $ 80,909 1,284 Non-frac sand revenues 1,054 70 1,693 108 Total revenues $ 101,842 1,589 $ 82,602 1,392 Six Months Ended June 30, 2018 2017 $ in thousands Tons in thousands $ in thousands Tons in thousands Frac sand revenues $ 206,759 2,956 $ 156,091 2,529 Non-frac sand revenues 1,833 136 1,855 114 Total revenues $ 208,592 3,092 $ 157,946 2,643 We maintain an allowance for doubtful accounts to reflect estimated losses resulting from the failure of customers to make required payments. On an ongoing basis, the collectability of accounts receivable is assessed based upon historical collection trends, current economic factors and the assessment of the collectability of specific accounts. We evaluate the collectability of specific accounts and determine when to grant credit to our customers using a combination of factors, including the age of the outstanding balances, evaluation of customers’ current and past financial condition, recent payment history, current economic environment, and discussions with our personnel and with the customers directly. Accounts are written off when it is determined the receivable will not be collected. If circumstances change, our estimates of the collectability of amounts could change by a material amount. A limited number of our contracts have variable consideration, including shortfall fees and demurrage fees. For a limited number of customers, we sell under long-term, minimum purchase supply agreements. These agreements define, among other commitments, the volume of product that our customers must purchase, the volume of product that we must provide, and the price that we will charge for each product. The shortfall fees are billed when the customer does not meet the minimum purchases over a period of time defined in each contract. As we do not have the ability to predict the customer’s orders over the period, there are constraints around our ability to recognize the variability in consideration related to this condition. Demurrage fees are assessed to customers for not returning the railcar timely and according to the terms of the contract. Estimation of demurrage fees is also constrained as we cannot estimate when the customer will pick up the product from the railcar upon delivery. Shortfall fees and demurrage represent an immaterial amount of revenue historically. For these contracts we estimate our position quarterly using the most likely outcome method, including customer-provided forecasts and historical buying patterns, and we accrue for any asset or liability these arrangements may create. The effect of accruals for variable consideration on our consolidated financial statements is immaterial. After a thorough and extensive analysis of all of our long-term, minimum purchase supply agreements and a review of the standard terms of the purchase orders, we determined that there is no material change in the transaction price and amounts allocated to performance obligations, or the timing of satisfaction of performance obligations under ASC 606 compared to our accounting for these items in previous periods. Discontinued Operations On August 31, 2016, we completed the sale of our Fuel business pursuant to the terms of the Fuel Business Purchase Agreement. The purchase price was $167.7 million , subject to adjustment based on actual working capital conveyed at closing. The following escrow accounts were established at closing: • $7 million of the sales price was withheld as a general escrow associated with certain indemnification obligations. Any unutilized escrow balance, plus any accrued interest thereon, will be paid 54 months from the closing date. • $4 million of the sales price was withheld as a hydrotreater escrow to satisfy any cost overruns of the Birmingham hydrotreater completion. In 2017, we wrote off the entire receivable relating to hydrotreator completion delays and cost overruns. • $2.25 million of the sales price was withheld as the Renewable Fuel Standard escrow account. The entire amount, along with interest thereon, was collected in April 2017. • $1 million of the sales price was withheld as a pipeline escrow account. Any unutilized escrow balance, along with any accrued interest thereon, will be released with the general escrow. Escrow receivables are recorded at the net present values of estimated future recoveries and will be adjusted as contingencies are resolved. During the three months ended June 30, 2017 , we wrote off a non-cash charge of $2.7 million of the hydrotreator and pipeline escrow receivables relating to completion delays and cost overruns. Private Placement In connection with our private placement in August 2016, we issued to the purchaser a warrant to purchase approximately 890,000 common units at an exercise price of $10.82 per common unit. The warrant, which expires on August 16, 2022, was exercisable immediately upon issuance and contains a cashless exercise provision and other customary provisions and protections, including anti-dilution protections. This warrant is classified as a liability in accordance with ASC 480, Distinguishing Liabilities from Equity, and is included in Other long-term liabilities on our Condensed Consolidated Balance Sheets. This warrant has not been exercised as of June 30, 2018 . Allowance for Doubtful Accounts The allowance for doubtful accounts totaled $37 thousand at June 30, 2018 , and $17 thousand at December 31, 2017 . Inventories Inventories consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Sand finished goods $ 10,019 $ 12,914 Sand work in process 9,014 14,650 Sand raw materials and supplies 179 261 Total $ 19,212 $ 27,825 Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Prepaid services $ 4,970 $ 1,011 Prepaid lease assets, current (1) 2,322 2,496 Prepaid insurance 788 875 Prepaid transload services 636 1,274 Other 867 675 Total $ 9,583 $ 6,331 (1) The cost to transport leased railcars from the manufacturer to our site for initial placement in service is capitalized and amortized over the term of the lease (typically five to seven years). This balance reflects the current portion of these capitalized costs. Property, Plant and Equipment Property, plant and equipment consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Machinery and equipment (1) $ 109,076 $ 92,353 Buildings and improvements (1) 66,149 66,444 Mineral reserves 49,091 49,091 Land and improvements (1) 48,897 45,567 Construction in progress 40,958 15,696 Capitalized reclamation costs 2,521 2,521 Total cost 316,692 271,672 Accumulated depreciation and depletion 94,380 85,702 Net property, plant and equipment $ 222,312 $ 185,970 (1) Includes assets under capital lease . We classified $940,000 and $292,000 as assets held for sale as of June 30, 2018 , and December 31, 2017 . We recognized $8.9 million and $8.8 million of depreciation and depletion expense for the six months ended June 30, 2018 , and 2017 , respectively. We capitalize a portion of the interest on funds borrowed to finance the construction of our plants. During the three and six months ended June 30, 2018 , we capitalized $0.7 million and $1.1 million of interest for the construction of the San Antonio facility. Intangible Assets Our intangible assets consisted of the following: Cost Accumulated Net ($ in thousands) June 30, 2018: Non-compete agreement $ 100 $ 39 $ 61 December 31, 2017: Patents $ 7,443 $ 6,188 $ 1,255 Supply and transportation agreements 569 226 343 Non-compete agreement 100 34 66 Total $ 8,112 $ 6,448 $ 1,664 We recognized $1.3 million and $1.6 million of amortization expense for the six months ended June 30, 2018 , and 2017 , respectively. Other Assets, Net Other assets, net consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Deferred lease asset (1) $ 8,750 $ 8,775 Prepaid lease assets, net of current portion (2) 6,046 7,153 Escrow receivable, non-current (3) 5,862 5,684 Other 357 2,810 Total $ 21,015 $ 24,422 (1) During 2016, we completed negotiations with various railcar lessors pursuant to which we terminated future orders of railcars, deferred future railcar deliveries and reduced and deferred payments on existing leases. The cost of deferring future railcar deliveries was recorded as a deferred lease asset. This asset will be amortized over the terms of the associated leases as those railcars enter service. (2) The cost to transport leased railcars from the manufacturer to our site for initial placement in service is capitalized and amortized over the term of the lease (typically five to seven years). This balance reflects the non-current portion of these capitalized costs. (3) Non-current receivables are recorded at net present value of estimated recoveries and will be adjusted as contingencies are resolved. Accrued Liabilities Accrued liabilities consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Fuel sale related liabilities $ 2,480 $ 2,475 Salaries and other employee-related 2,219 4,633 Logistics 2,125 5,898 Current portion of business acquisition obligations 1,729 1,952 Mining 871 170 Sales, excise, property and income taxes 864 1,953 Deferred compensation 848 848 Sand purchases and royalties 610 311 Accrued interest 337 2,552 Construction 160 7,122 Current portion of contract termination 85 210 Professional fees 32 373 Other 681 1,221 Total $ 13,041 $ 29,718 Other Long-term Liabilities Other long-term liabilities consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Deferred lease obligation (1) $ 11,376 $ 9,561 Long-term promissory note 4,370 9,370 Asset retirement obligation 2,837 2,792 Warrants 2,379 2,811 Contract and project terminations 884 5,348 Total $ 21,846 $ 29,882 (1) We recognize lease expense for operating leases on a straight-line basis over the term of the lease, beginning on the date we take possession of the property. The difference between the cash paid to the lessor and the amount recognized as lease expense on a straight-line basis is included in deferred lease obligation. Long-term Promissory Note During the second quarter of 2016, we negotiated significant concessions on the majority of our railcar leases pursuant to which we cancelled or deferred deliveries on railcars and reduced cash payments on a substantial portion of the existing rail cars in our fleets. In exchange for these concessions, we issued at par an unsecured promissory note in the aggregate principal amount of $8 million (the “PIK Note”) for delivery deferrals. The PIK Note bears interest at a rate of 10% per annum payable in cash or, in certain situations, in-kind, when certain financial metrics have been met. We began paying interest in cash as of January 1, 2018. The PIK Note will mature on June 2, 2020. We paid $1.5 million of the principal balance during the six months ended June 30, 2018 , as part of our debt refinancing described in Note 4 to our Condensed Consolidated Financial Statements. We also issued warrants to purchase 370,000 common units representing limited partnership interests in the Partnership in exchange for these concessions during the second quarter of 2016. Contract and Project Terminations In December 2015, we gained access to a significant reserve base in Jackson County, Wisconsin through a business arrangement with a contracted customer. The assets acquired included certain owned and leased land, sand deposit leases and related prepaid royalties, and transferable mining and reclamation permits. In consideration for the assets, we amended and restated the existing supply agreement between the parties and entered into a new sand purchase option agreement that provided the customer with a market-based discount on sand purchased from us. Under the agreements, we have the option to supply the contracted tons from our existing footprint of northern white sand operations or construct a new sand mine and dry plant in Jackson County, Wisconsin. Due to changing market conditions and changing preferences of customer demand, we determined that these projects were no longer economically viable and decided to terminate the land owner agreements and the mine permits. We recorded a $1.9 million charge to earnings to write off the related prepaid royalties during the six months ended June 30, 2018 . As we terminated our permits for these properties, we will not owe any future royalty payments related to these properties. During 2016, we negotiated concessions on the majority of our railcar leases pursuant to which we cancelled or deferred deliveries on rail cars and reduced cash payments on a substantial portion of the existing rail cars in our fleets. In exchange for these concessions, we incurred a contract termination charge of $4 million . We issued at par an unsecured promissory note in the aggregate principal amount of $4 million with interest payable in cash or, in certain situations, in-kind, when certain financial metrics have been met. This note bore interest at a rate of five percent per annum. We fully extinguished this liability and paid $4.4 million in January 2018 as part of our debt refinancing described in Note 4 to our Condensed Consolidated Financial Statements. The following table illustrates the various contract termination liabilities and exit and disposal reserves included in Accrued liabilities and Other long-term liabilities in our Condensed Consolidated Balance Sheets: ($ in thousands) Balance at December 31, 2017 $ 5,557 Adjustments (221 ) Accretion 15 Payments (4,382 ) Balance at June 30, 2018 $ 969 Mining and Wet Sand Processing Agreement In April 2014, a five -year contract with a sand processor (“Processor”) became effective to support our Sand business in Wisconsin. In January 2015, the agreement was amended and extended to expire on December 31, 2021. Under this contract, the Processor financed and built a wet wash processing plant near our Wisconsin operations. As part of the agreement, the Processor wet washes our sand, creates stockpiles of washed sand and maintains the plant and equipment. During the term of the agreement the Processor will own the wet plant along with the equipment and other temporary structures used to support this activity. At the end of the term of the agreement or following a default under the contract by the Processor, we have the right to take ownership of the wet plant and other equipment without charge. Subject to certain conditions, ownership of the plant and equipment will transfer to us at the expiration of the term. We accounted for the wet plant as a capital lease obligation. Fair Value Measurements Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable and debt instruments. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are representative of their fair values due to their short maturities. The carrying amounts of our revolving credit facility approximates fair value because the underlying instrument includes provisions that adjust our interest rates based on current market rates. The fair values of our other long-term liabilities are not materially different from their carrying values. On August 8, 2016, we, as part of the private placement described above, also issued a warrant to the purchaser to purchase approximately 890,000 common units at an exercise price of $10.82 per common unit. This warrant shall be exercisable for a period of six years from the closing date and include customary provisions and protections, including anti-dilution protections. The fair value of this warrant at issuance date was calculated at $5.56 per unit based on a Black Scholes valuation model, utilizing Level 2 inputs based on the hierarchy established in ASC 820, Fair Value Measurement. This liability is marked to market each quarter with fair value gains and losses recognized immediately in earnings and included in Other income (expense) on our Consolidated Statements of Operations. The warrant liability was $2.4 million and $2.8 million at June 30, 2018 , and December 31, 2017 , respectively. We recorded a non-cash mark-to-market loss of $0.2 million and a gain of $0.4 million during the three and six months ended June 30, 2018 , and a gain of $3.0 million and $2.3 million during the three and six months ended June 30, 2017 . Retirement Plan We sponsor a 401(k) plan for substantially all employees that provides for us to match 100% of participant contributions up to 5% of the participant’s pay. Additionally, we can make discretionary contributions as deemed appropriate by management. As of May 1, 2017, we reestablished the employer 401(k) contributions, which was previously suspended on July 1, 2016. Employer contributions to these plans totaled $0.5 million and $0.1 million for the six months ended June 30, 2018 , and 2017 , respectively. Seasonality Winter weather affects the months during which we can wash and wet-process sand in Wisconsin. Seasonality is not a significant factor in determining our ability to supply sand to our customers because we accumulate a stockpile of wet sand feedstock during non-winter months. During the winter, we process the stockpiled sand to meet customer requirements. However, we sell sand for use in oil and natural gas production basins where severe weather conditions may curtail drilling activities. This is particularly true in drilling areas located in the northern U.S. and western Canada. If severe winter weather precludes drilling activities, our frac sand sales volume may be adversely affected. Generally, severe weather episodes affect production in the first quarter with effects possibly continuing into the second quarter. Concentration of Credit Risk We provide credit, in the normal course of business, to customers located throughout the United States and Canada. We encounter a certain amount of credit risk as a result of a concentration of receivables among a few significant customers. We perform ongoing credit evaluations of our customers and generally do not require collateral. The trade receivables (as a percentage of total trade receivables) as of June 30, 2018 , and December 31, 2017 , from such significant customers are set forth below: June 30, 2018 December 31, 2017 Customer A 33 % 20 % Customer B 20 % 17 % Customer C * 13 % An asterisk indicates trade receivables less than ten percent. Significant customers The table shows the percent of revenue of our significant customers for our continuing operations represented for the six months ended June 30, 2018 , and 2017 . June 30, 2018 June 30, 2017 Customer B 27 % 16 % Customer A 16 % * Customer D 11 % 26 % An asterisk indicates revenue is less than ten percent. Geographical Data Although we own no long-term assets outside the United States, we began selling sand in Canada during 2013. We recognized $16.7 million and $5.4 million of revenues in Canada for the six months ended June 30, 2018 , and 2017 , respectively. All other sales have occurred in the United States. Recent Issued Accounting Pronouncement In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to recognize lease assets and lease liabilities generated by contracts longer than a year on their balance sheets. The ASU also requires companies to disclose in the footnotes to their financial statements information about the amount, timing, and uncertainty for the payments they make for the lease agreements. ASU 2016-02 is effective for public companies for annual periods and interim periods within those annual periods beginning after December 31, 2018. Early adoption is permitted for all entities. We currently have significant long-term operating leases for rail cars and other assets. Pursuant to the adoption, we will record substantial liabilities and corresponding assets for these leases. We are working with our independent consultant to assist us in our assessment of our lease contracts. While we are not yet in a position to assess the full impact of the application of this ASU, we expect that the impact of recording the lease liabilities and the corresponding additional assets will have a significant impact on our financial position and results of operations and related disclosures in the notes to our consolidated financial statements. We plan to adopt this guidance on January 1, 2019. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Following is a summary of our long-term debt: June 30, 2018 December 31, 2017 ($ in thousands) Second lien term loan - principal $ 215,000 $ 40,000 Revolving credit facility - principal 3,012 143,700 Less: Deferred financing costs, net (19,745 ) (7,349 ) Total debt 198,267 176,351 Less current portion (10,750 ) — Long-term debt $ 187,517 $ 176,351 Revolving Credit Facility On January 5, 2018, we entered into a $75.0 million Second Amended and Restated Revolving Credit and Security Agreement (the “Credit Agreement”), among the Partnership, as parent guarantor, each of its subsidiaries, as borrowers, PNC Bank, National Association (“PNC Bank”), as administrative agent and collateral agent, and the other lenders party thereto. The Credit Agreement replaced the Prior Credit Agreement. The Credit Agreement provides for a $75.0 million asset-based revolving credit facility, and a $20.0 million sublimit for the issuance of letters of credit. The Credit Agreement matures on January 5, 2022. Substantially all our assets are pledged as collateral on a first lien basis. This revolving credit facility is available to (i) refinance existing indebtedness, (ii) fund fees and expenses incurred in connection with the credit facility and (iii) for general business purposes, including working capital requirements, capital expenditures, permitted acquisitions, making debt payments when due, and making distributions and dividends. The Credit Agreement contains various covenants and restrictive provisions and also requires the maintenance of certain financial covenants as follows: • a minimum liquidity requirement of $20.0 million at all times; • beginning with the fiscal quarter ending March 31, 2018, a total leverage ratio of a maximum of 5.50 :1.00 decreasing quarterly thereafter to 3.00 :1.00 for the fiscal quarter ending December 31, 2018, and thereafter; • beginning with the fiscal quarter ending March 31, 2018, a minimum fixed charge coverage ratio of 1.10 :1.00; and • a limit on capital expenditures, subject to certain availability thresholds. Loans under the Credit Agreement bear interest at our option at either (i) a base rate, which will be the base commercial lending rate of PNC Bank, as publicly announced to be in effect from time to time, plus an applicable margin ranging from 0.75% to 1.25% based on total leverage ratio; or (ii) LIBOR plus an applicable margin ranging from 1.75% to 2.25% based on the Partnership’s total leverage ratio. During the six months ended June 30, 2018 , we wrote off $3.9 million of deferred financing costs relating to the reduction of our revolving credit facility. At June 30, 2018 , our outstanding borrowings under the Credit Agreement bore interest at an all-in weighted-average rate of 8.6% . Second Lien Note Purchase Agreement On January 5, 2018, the Partnership as guarantor, and the Partnership’s wholly owned subsidiaries Emerge Energy Services Operating LLC and Superior Silica Sands LLC, as issuers, entered into a $215.0 million Second Lien Note Purchase Agreement with the purchasers thereunder (the “Second Lien Note Purchase Agreement”). The notes issued under the Second Lien Note Purchase Agreement will mature on January 5, 2023. Proceeds of the sale of the notes under the Second Lien Note Purchase Agreement will be used (i) to fully pay off the Partnership’s existing second lien term credit facility, (ii) to fully pay off the obligations under the Partnership’s Prior Credit Agreement, (iii) to finance capital expenditures, (iv) to pay fees and expenses incurred in connection with the new second lien facility and (v) for general business purposes. Substantially all of the Partnership’s assets are pledged as collateral on a second lien basis. The Second Lien Note Purchase Agreement contains various covenants and restrictive provisions and also requires the maintenance of certain financial covenants as follows: • a minimum liquidity requirement of $20.0 million at all times; • beginning with the fiscal quarter ending March 31, 2018, a total leverage ratio of a maximum of 6.00 :1.00 decreasing quarterly thereafter to 3.00 :1.00 for the fiscal quarter ending March 31, 2019, and thereafter; • beginning with the fiscal quarter ending March 31, 2018, a minimum fixed charge coverage ratio of 1.10 :1.00, increasing quarterly to 2.00 :1.00 for the fiscal quarter ending March 31, 2019, and thereafter; and • a limit on capital expenditures, subject to certain availability thresholds. Commencing on September 30, 2018, we are required to make quarterly principal payments (without premium or penalty) equal to (i) for each fiscal quarter ending on or prior to December 31, 2019, 1.25% , and (ii) for each fiscal quarter thereafter, 1.875% , of the original principal amount. Accordingly, on June 30, 2018 , we have classified $10.8 million of principal as a current liability. The notes under the Second Lien Note Purchase Agreement bear interest at 11% per annum until December 31, 2018, and ranging from 10.00% per annum to 12.00% per annum thereafter, depending on the our leverage ratio. In lieu of paying cash for certain transaction costs, we also issued 814,295 common units representing limited partnership interests in the Partnership to the Second Lien Note holders in a private placement in January 2018. Proceeds from this issuance, net of expenses, was $6.0 million . Covenants Compliance At June 30, 2018 , we were in compliance with our loan covenants and had undrawn availability under the Credit Agreement totaling $60.6 million , well above the minimum availability required under our current covenants. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Related party transactions included in our Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations are summarized in the following table: Six Months Ended June 30, 2018 2017 ($ in thousands) Employee-related and other costs (1) $ 14,448 $ 8,263 June 30, 2018 December 31, 2017 ($ in thousands) Accounts receivable, net $ 154 $ 962 Accounts payable and accrued liabilities $ 819 $ 800 (1) We do not have any employees. Our general partner manages our human resource assets, including fringe benefits and other employee-related charges. We routinely and regularly reimburse our general partner for any employee-related costs paid on our behalf, and report such costs as operating expenses. The Company follows ASC 850, Related Party Disclosures , for the identification of related parties and disclosure of related party transactions. In 2017, Mr. Paul Shearer, the son of our President and Chief Executive Officer, was hired as the Director of Business Relations and he currently serves as the Director of Sales. During the six months ended June 30, 2018, we paid Paul Shearer $125 thousand in total compensation, including base salary, bonus, company contributions under our 401(k) plan and contributions to his health savings account. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Effective May 14, 2013, we adopted our 2013 Long-Term Incentive Plan (the “LTIP”) for providing long-term incentives for employees, directors, and consultants who provide services to us. The LTIP provides for the issuance of an aggregate of up to 2,321,968 common units to be granted either as options, restricted units, phantom units, distribution equivalent rights, unit appreciation rights, unit award, profits interest units, or other unit-based award granted under the plan. All of our outstanding grants will be settled through issuance of limited partner common units. For remaining phantom units granted to employees in 2013, we currently assume a 67 -month vesting period, which represents management’s estimate of the amount of time until all vesting conditions have been met. For other phantom units granted to employees, we have a 24 to 36 -month vesting period. Restricted units are awarded to our independent directors on each anniversary of our IPO, each with a vesting period of one year. Regarding distributions for independent directors and other employees, distributions are credited to a distribution equivalent rights account for the benefit of each participant and become payable generally within 45 days days following the date of vesting. As of June 30, 2018 , the unpaid liability for distribution equivalent rights totaled $0.8 million . In the first half of 2018, we granted 24,800 time-based phantom units to certain officers and employees to vest in equal installments on each anniversary date of the grant over a period of two years. The following table summarizes awards granted during the six months ended June 30, 2018 . Total Phantom Restricted Fair Value per Unit Outstanding at December 31, 2017 333,821 310,780 23,041 $ 13.10 Granted 61,768 24,800 36,968 $ 7.90 Vested (48,315 ) (25,275 ) (23,040 ) $ 9.72 Forfeitures — — — $ — Outstanding at June 30, 2018 347,274 310,305 36,969 $ 12.43 For the six months ended June 30, 2018 , and 2017 , we recorded non-cash equity-based compensation expense of $0.9 million and $0.7 million , respectively, in selling, general and administrative expenses. As of June 30, 2018 , the unrecognized compensation expense related to the grants discussed above amounted to $1.3 million to be recognized over a weighted average of 1.0 years . |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our provision for income taxes relates to: (i) Texas margin taxes for the Partnership, and (ii) a Canadian income taxes on SSS earnings in Canada (most of our earnings are exempted under a U.S/Canada tax treaty). For federal income tax purposes, we report our income, expenses, gains, and losses as a partnership not subject to income taxes. As such, each partner is responsible for his or her share of federal and state income tax. Net earnings for financial statement purposes may differ significantly from taxable income reportable to each partner because of differences between the tax basis and financial reporting basis of assets and liabilities. The composition of our provision for income taxes is as follows: Six Months Ended June 30, 2018 2017 ($ in thousands) Texas margin tax $ 95 $ — Canadian income tax 55 — Total provision for income taxes $ 150 $ — We are responsible for our portion of the Texas margin tax that is included in our subsidiaries’ consolidated Texas franchise tax returns. For our operations in Texas, the effective margin tax rate is approximately 0.375% as defined by applicable state law. The margin tax qualifies as an income tax under GAAP, which requires us to recognize the impact of this tax on the temporary differences between the financial statement assets and liabilities and their tax basis attributable to such tax. |
EARNINGS PER COMMON UNIT
EARNINGS PER COMMON UNIT | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON UNIT | EARNINGS PER COMMON UNIT We compute basic earnings (loss) per unit by dividing net income (loss) by the weighted-average number of common units outstanding including certain participating securities. Participating securities include unvested equity-based payment awards that contain rights to distributions, as well as convertible preferred units and warrants that contain contractual rights to participate in any distributions that are declared. It is our policy to exclude participating securities, convertible preferred units and warrants from the calculation of basic earnings (loss) per unit in periods of net losses from continuing operations since these securities are not contractually obligated to share in losses. Diluted earnings per unit is computed by dividing net income by the weighted-average number of common units outstanding, including the number of common units that would have been outstanding had potential dilutive units been exercised. The dilutive effect of restricted units is reflected in diluted net income per unit by applying the treasury stock method. For periods in which warrants are dilutive, we reverse the income effects of the warrants and include incremental units in our computation of diluted earnings per unit. Under FASB ASC 260-10-45, Contingently Issuable Shares , 93,806 of our outstanding phantom units are not included in basic or diluted earnings per common unit calculations as of June 30, 2018 , and 2017 . Basic and diluted earnings per unit for the three months ended June 30, 2018 , and 2017 is calculated as follows: Continuing Discontinued Consolidated Three Months Ended June 30, 2018 2017 2018 2017 2018 2017 ($ in thousands, except unit and per unit data) Net income (loss) used to compute earnings (loss) per common unit, basic $ 9,428 $ (3,425 ) $ — $ (2,657 ) $ 9,428 $ (6,082 ) Unrealized (gain) loss on fair value of warrant — (3,008 ) — — — (3,008 ) Net income (loss) used to compute earnings (loss) per common unit, diluted $ 9,428 $ (6,433 ) $ — $ (2,657 ) $ 9,428 $ (9,090 ) Weighted average common units outstanding 31,029,213 30,147,725 31,029,213 30,147,725 31,029,213 30,147,725 Weighted average units deemed participating securities 253,467 — 253,467 — 253,467 — Weighted average number of common units outstanding - basic 31,282,680 30,147,725 31,282,680 30,147,725 31,282,680 30,147,725 Weighted average potentially dilutive units outstanding 18,348 — 18,348 — 18,348 — Add incremental units from assumed exercise of warrants 138,926 55,333 138,926 55,333 138,926 55,333 Weighted average number of common units outstanding - diluted 31,439,954 30,203,058 31,439,954 30,203,058 31,439,954 30,203,058 Earnings (loss) per unit, basic $ 0.30 $ (0.11 ) $ — $ (0.09 ) $ 0.30 $ (0.20 ) Earnings (loss) per unit, diluted $ 0.30 $ (0.21 ) $ — $ (0.09 ) $ 0.30 $ (0.30 ) Basic and diluted earnings per unit for the six months ended June 30, 2018 , and 2017 is calculated as follows: Continuing Discontinued Consolidated Six Months Ended June 30, 2018 2017 2018 2017 2018 2017 ($ in thousands, except unit and per unit data) Net income (loss) used to compute earnings (loss) per common unit, basic $ 10,914 $ (14,815 ) $ — $ (2,657 ) $ 10,914 $ (17,472 ) Unrealized (gain) loss on fair value of warrant — (2,312 ) — — — (2,312 ) Net income (loss) used to compute earnings (loss) per common unit, diluted $ 10,914 $ (17,127 ) $ — $ (2,657 ) $ 10,914 $ (19,784 ) Weighted average common units outstanding 31,013,258 30,104,613 31,013,258 30,104,613 31,013,258 30,104,613 Weighted average units deemed participating securities 234,759 — 234,759 — 234,759 — Weighted average number of common units outstanding - basic 31,248,017 30,104,613 31,248,017 30,104,613 31,248,017 30,104,613 Weighted average potentially dilutive units outstanding 14,187 — 14,187 — 14,187 — Add incremental units from assumed exercise of warrants 141,078 192,383 141,078 192,383 141,078 192,383 Weighted average number of common units outstanding - diluted 31,403,282 30,296,996 31,403,282 30,296,996 31,403,282 30,296,996 Earnings (loss) per unit, basic $ 0.35 $ (0.49 ) $ — $ (0.09 ) $ 0.35 $ (0.58 ) Earnings (loss) per unit, diluted $ 0.35 $ (0.57 ) $ — $ (0.09 ) $ 0.35 $ (0.66 ) |
RECURRING FAIR VALUE MEASUREMEN
RECURRING FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
RECURRING FAIR VALUE MEASUREMENTS | RECURRING FAIR VALUE MEASUREMENTS We follow FASB ASC 820, Fair Value Measurement , which defines fair value, establishes a framework for measuring fair value, and specifies disclosures about fair value measurements. This guidance establishes a hierarchy for disclosure of the inputs to valuations used to measure fair value. The hierarchy prioritizes the inputs into three broad levels as follows. • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. • Level 3 inputs are measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources. Our valuation models consider various inputs including (a) mark to market valuations, (b) time value and, (c) credit worthiness of valuation of the underlying measurement. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. We do not designate our derivative instruments as hedges under GAAP. As a result, we recognize derivatives at fair value on the consolidated balance sheet with resulting gains and losses reflected in interest expense (for interest rate swap agreements). Our derivative instruments serve the same risk management purpose whether designated as a hedge or not. We derive fair values principally from published market interest rates (Level 2 inputs). We do not use derivative financial instruments for trading or speculative purposes. On August 8, 2016, we, as part of the private placement described above, issued a warrant to the purchaser to purchase approximately 890,000 common units at an exercise price of $10.82 per common unit. The warrant shall be exercisable for a period of six years from the closing date and include customary provisions and protections, including anti-dilution protections. The fair value of this warrant at issuance date was calculated at $5.56 per unit based on a Black Scholes valuation model, utilizing Level 2 inputs based on the hierarchy established in ASC 820, Fair Value Measurement. This liability is marked to market each quarter with fair value gains and losses recognized immediately in earnings and included in Other expense (income) on our Condensed Consolidated Statements of Operations. We recorded a non-cash mark-to-market loss of $0.2 million and and a gain of $0.4 million during the three and six months ended June 30, 2018 , and a gain of $3.0 million and $2.3 million during the three and six months ended June 30, 2017 . The fair values of outstanding derivative instruments and warrant and their classifications within our Condensed Consolidated Balance Sheets are summarized as follows: June 30, 2018 December 31, 2017 Classification ($ in thousands) Warrant liability $ 2,379 $ 2,811 Other long-term liabilities The effect of derivative instruments, none of which has been designated for hedge accounting, on our Condensed Consolidated Statements of Operations was as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Classification ((income) expense $ in thousands) Interest rate swaps $ — $ (8 ) $ — $ (64 ) Interest expense, net Warrant 244 (3,008 ) (432 ) (2,312 ) Other expense (income) $ 244 $ (3,016 ) $ (432 ) $ (2,376 ) |
SUPPLEMENTAL CASH FLOW DISCLOSU
SUPPLEMENTAL CASH FLOW DISCLOSURES | 6 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES The following supplemental disclosures may assist in the understanding of our Condensed Consolidated Statements of Cash Flows: Six Months Ended June 30, 2018 2017 ($ in thousands) Cash paid for interest, net of capitalized interest $ 8,047 $ 6,934 Cash paid for income taxes, net of refunds $ 28 $ 15 Issuance of equity $ 5,974 $ — Purchases of PP&E accrued but not paid at period-end $ 2,114 $ 1,115 Purchases of PP&E accrued in a prior period and paid in the current period $ 11,372 $ 170 |
ORGANIZATION AND BASIS OF PRE17
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our 2017 Annual Report on Form 10-K. These financial statements include the accounts of all of our subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. |
Revenue from Contracts with Customers | Adoption of ASC 606, Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers , ASC 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 replaced most existing revenue recognition guidance in United States Generally Accepted Accounting Principles (“GAAP”) when it became effective for fiscal years beginning after December 15, 2017. ASC 606 permits the use of either the retrospective or cumulative effect transition method. We conducted and completed a comprehensive review of contracts and their associated business terms and conditions and performed detailed analyses on the impact of this standard to our contracts. We adopted the new standard on January 1, 2018, using the full retrospective method. Because accounting for revenue under contracts did not materially change for us under the new standard as explained below, prior period consolidated financial statements did not require adjustment. We recognize revenue at a point in time when obligations under the terms of a contract with our customer are satisfied. This occurs with the transfer of control of our products to customers when products are shipped for direct sales to customers or when the product is picked up by a customer either at our plant location or transload location. Our contracts contain one performance obligation which is the delivery of sand to the customer at a point in time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. We recognize the cost for shipping as an expense in cost of sales when control over the product has transferred to the customer. Sales taxes collected concurrently with revenue-producing activities are excluded from revenue. Our sand products are sold to United States and Canada-based customers primarily in the energy industry. Demand for our product is impacted by the economic conditions related to the energy industry, particularly fluctuations in oil and gas prices. This affects the nature, amount, timing and uncertainty of our revenue. Changes in the price of oil and gas relative to other inflationary measures could make our products more or less affordable and therefore affect our sales. We also sell a small quantity of non-frac sand to customers outside the energy industry. Our payment terms vary by type and location of our customers. In most cases, the term between invoicing and the payment due date is 30 days. For certain customers, we require payment before the product is delivered. The following tables present our revenues disaggregated by nature of product for the three and six months ended June 30, 2018 , and 2017 : Three Months Ended June 30, 2018 2017 $ in thousands Tons in thousands $ in thousands Tons in thousands Frac sand revenues $ 100,788 1,519 $ 80,909 1,284 Non-frac sand revenues 1,054 70 1,693 108 Total revenues $ 101,842 1,589 $ 82,602 1,392 Six Months Ended June 30, 2018 2017 $ in thousands Tons in thousands $ in thousands Tons in thousands Frac sand revenues $ 206,759 2,956 $ 156,091 2,529 Non-frac sand revenues 1,833 136 1,855 114 Total revenues $ 208,592 3,092 $ 157,946 2,643 We maintain an allowance for doubtful accounts to reflect estimated losses resulting from the failure of customers to make required payments. On an ongoing basis, the collectability of accounts receivable is assessed based upon historical collection trends, current economic factors and the assessment of the collectability of specific accounts. We evaluate the collectability of specific accounts and determine when to grant credit to our customers using a combination of factors, including the age of the outstanding balances, evaluation of customers’ current and past financial condition, recent payment history, current economic environment, and discussions with our personnel and with the customers directly. Accounts are written off when it is determined the receivable will not be collected. If circumstances change, our estimates of the collectability of amounts could change by a material amount. A limited number of our contracts have variable consideration, including shortfall fees and demurrage fees. For a limited number of customers, we sell under long-term, minimum purchase supply agreements. These agreements define, among other commitments, the volume of product that our customers must purchase, the volume of product that we must provide, and the price that we will charge for each product. The shortfall fees are billed when the customer does not meet the minimum purchases over a period of time defined in each contract. As we do not have the ability to predict the customer’s orders over the period, there are constraints around our ability to recognize the variability in consideration related to this condition. Demurrage fees are assessed to customers for not returning the railcar timely and according to the terms of the contract. Estimation of demurrage fees is also constrained as we cannot estimate when the customer will pick up the product from the railcar upon delivery. Shortfall fees and demurrage represent an immaterial amount of revenue historically. For these contracts we estimate our position quarterly using the most likely outcome method, including customer-provided forecasts and historical buying patterns, and we accrue for any asset or liability these arrangements may create. The effect of accruals for variable consideration on our consolidated financial statements is immaterial. After a thorough and extensive analysis of all of our long-term, minimum purchase supply agreements and a review of the standard terms of the purchase orders, we determined that there is no material change in the transaction price and amounts allocated to performance obligations, or the timing of satisfaction of performance obligations under ASC 606 compared to our accounting for these items in previous periods. Adoption of ASC 606, Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers , ASC 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 replaced most existing revenue recognition guidance in United States Generally Accepted Accounting Principles (“GAAP”) when it became effective for fiscal years beginning after December 15, 2017. ASC 606 permits the use of either the retrospective or cumulative effect transition method. We conducted and completed a comprehensive review of contracts and their associated business terms and conditions and performed detailed analyses on the impact of this standard to our contracts. We adopted the new standard on January 1, 2018, using the full retrospective method. Because accounting for revenue under contracts did not materially change for us under the new standard as explained below, prior period consolidated financial statements did not require adjustment. We recognize revenue at a point in time when obligations under the terms of a contract with our customer are satisfied. This occurs with the transfer of control of our products to customers when products are shipped for direct sales to customers or when the product is picked up by a customer either at our plant location or transload location. Our contracts contain one performance obligation which is the delivery of sand to the customer at a point in time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. We recognize the cost for shipping as an expense in cost of sales when control over the product has transferred to the customer. Sales taxes collected concurrently with revenue-producing activities are excluded from revenue. Our sand products are sold to United States and Canada-based customers primarily in the energy industry. Demand for our product is impacted by the economic conditions related to the energy industry, particularly fluctuations in oil and gas prices. This affects the nature, amount, timing and uncertainty of our revenue. Changes in the price of oil and gas relative to other inflationary measures could make our products more or less affordable and therefore affect our sales. We also sell a small quantity of non-frac sand to customers outside the energy industry. |
Recent Accounting Pronouncements | Recent Issued Accounting Pronouncement In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to recognize lease assets and lease liabilities generated by contracts longer than a year on their balance sheets. The ASU also requires companies to disclose in the footnotes to their financial statements information about the amount, timing, and uncertainty for the payments they make for the lease agreements. ASU 2016-02 is effective for public companies for annual periods and interim periods within those annual periods beginning after December 31, 2018. Early adoption is permitted for all entities. We currently have significant long-term operating leases for rail cars and other assets. Pursuant to the adoption, we will record substantial liabilities and corresponding assets for these leases. We are working with our independent consultant to assist us in our assessment of our lease contracts. While we are not yet in a position to assess the full impact of the application of this ASU, we expect that the impact of recording the lease liabilities and the corresponding additional assets will have a significant impact on our financial position and results of operations and related disclosures in the notes to our consolidated financial statements. We plan to adopt this guidance on January 1, 2019. |
OTHER FINANCIAL DATA (Tables)
OTHER FINANCIAL DATA (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Financial Data Disclosure [Abstract] | |
Disaggregation of Revenue | The following tables present our revenues disaggregated by nature of product for the three and six months ended June 30, 2018 , and 2017 : Three Months Ended June 30, 2018 2017 $ in thousands Tons in thousands $ in thousands Tons in thousands Frac sand revenues $ 100,788 1,519 $ 80,909 1,284 Non-frac sand revenues 1,054 70 1,693 108 Total revenues $ 101,842 1,589 $ 82,602 1,392 Six Months Ended June 30, 2018 2017 $ in thousands Tons in thousands $ in thousands Tons in thousands Frac sand revenues $ 206,759 2,956 $ 156,091 2,529 Non-frac sand revenues 1,833 136 1,855 114 Total revenues $ 208,592 3,092 $ 157,946 2,643 |
Schedule of inventories | Inventories consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Sand finished goods $ 10,019 $ 12,914 Sand work in process 9,014 14,650 Sand raw materials and supplies 179 261 Total $ 19,212 $ 27,825 |
Schedule of Prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Prepaid services $ 4,970 $ 1,011 Prepaid lease assets, current (1) 2,322 2,496 Prepaid insurance 788 875 Prepaid transload services 636 1,274 Other 867 675 Total $ 9,583 $ 6,331 |
Schedule of property, plant and equipment | Property, plant and equipment consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Machinery and equipment (1) $ 109,076 $ 92,353 Buildings and improvements (1) 66,149 66,444 Mineral reserves 49,091 49,091 Land and improvements (1) 48,897 45,567 Construction in progress 40,958 15,696 Capitalized reclamation costs 2,521 2,521 Total cost 316,692 271,672 Accumulated depreciation and depletion 94,380 85,702 Net property, plant and equipment $ 222,312 $ 185,970 (1) Includes assets under capital lease |
Schedule of intangible assets other than goodwill | Our intangible assets consisted of the following: Cost Accumulated Net ($ in thousands) June 30, 2018: Non-compete agreement $ 100 $ 39 $ 61 December 31, 2017: Patents $ 7,443 $ 6,188 $ 1,255 Supply and transportation agreements 569 226 343 Non-compete agreement 100 34 66 Total $ 8,112 $ 6,448 $ 1,664 |
Schedule of other assets, net | Other assets, net consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Deferred lease asset (1) $ 8,750 $ 8,775 Prepaid lease assets, net of current portion (2) 6,046 7,153 Escrow receivable, non-current (3) 5,862 5,684 Other 357 2,810 Total $ 21,015 $ 24,422 (1) During 2016, we completed negotiations with various railcar lessors pursuant to which we terminated future orders of railcars, deferred future railcar deliveries and reduced and deferred payments on existing leases. The cost of deferring future railcar deliveries was recorded as a deferred lease asset. This asset will be amortized over the terms of the associated leases as those railcars enter service. (2) The cost to transport leased railcars from the manufacturer to our site for initial placement in service is capitalized and amortized over the term of the lease (typically five to seven years). This balance reflects the non-current portion of these capitalized costs. (3) Non-current receivables are recorded at net present value of estimated recoveries and will be adjusted as contingencies are resolved. |
Schedule of accrued liabilities | Accrued liabilities consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Fuel sale related liabilities $ 2,480 $ 2,475 Salaries and other employee-related 2,219 4,633 Logistics 2,125 5,898 Current portion of business acquisition obligations 1,729 1,952 Mining 871 170 Sales, excise, property and income taxes 864 1,953 Deferred compensation 848 848 Sand purchases and royalties 610 311 Accrued interest 337 2,552 Construction 160 7,122 Current portion of contract termination 85 210 Professional fees 32 373 Other 681 1,221 Total $ 13,041 $ 29,718 |
Schedule of other long-term liabilities | Other long-term liabilities consisted of the following: June 30, 2018 December 31, 2017 ($ in thousands) Deferred lease obligation (1) $ 11,376 $ 9,561 Long-term promissory note 4,370 9,370 Asset retirement obligation 2,837 2,792 Warrants 2,379 2,811 Contract and project terminations 884 5,348 Total $ 21,846 $ 29,882 (1) We recognize lease expense for operating leases on a straight-line basis over the term of the lease, beginning on the date we take possession of the property. The difference between the cash paid to the lessor and the amount recognized as lease expense on a straight-line basis is included in deferred lease obligation |
Contract termination liabilities | The following table illustrates the various contract termination liabilities and exit and disposal reserves included in Accrued liabilities and Other long-term liabilities in our Condensed Consolidated Balance Sheets: ($ in thousands) Balance at December 31, 2017 $ 5,557 Adjustments (221 ) Accretion 15 Payments (4,382 ) Balance at June 30, 2018 $ 969 |
Schedules of Concentration by trade account receivable balance | The trade receivables (as a percentage of total trade receivables) as of June 30, 2018 , and December 31, 2017 , from such significant customers are set forth below: June 30, 2018 December 31, 2017 Customer A 33 % 20 % Customer B 20 % 17 % Customer C * 13 % |
Schedule of Revenue by Major Customers, Continuing operations | The table shows the percent of revenue of our significant customers for our continuing operations represented for the six months ended June 30, 2018 , and 2017 . June 30, 2018 June 30, 2017 Customer B 27 % 16 % Customer A 16 % * Customer D 11 % 26 % An asterisk indicates revenue is less than ten percent. |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Following is a summary of our long-term debt: June 30, 2018 December 31, 2017 ($ in thousands) Second lien term loan - principal $ 215,000 $ 40,000 Revolving credit facility - principal 3,012 143,700 Less: Deferred financing costs, net (19,745 ) (7,349 ) Total debt 198,267 176,351 Less current portion (10,750 ) — Long-term debt $ 187,517 $ 176,351 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions included in Consolidated Balance Sheets and Consolidated Statements of Operations | Related party transactions included in our Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations are summarized in the following table: Six Months Ended June 30, 2018 2017 ($ in thousands) Employee-related and other costs (1) $ 14,448 $ 8,263 June 30, 2018 December 31, 2017 ($ in thousands) Accounts receivable, net $ 154 $ 962 Accounts payable and accrued liabilities $ 819 $ 800 (1) We do not have any employees. Our general partner manages our human resource assets, including fringe benefits and other employee-related charges. We routinely and regularly reimburse our general partner for any employee-related costs paid on our behalf, and report such costs as operating expenses. |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of awards granted during the period | The following table summarizes awards granted during the six months ended June 30, 2018 . Total Phantom Restricted Fair Value per Unit Outstanding at December 31, 2017 333,821 310,780 23,041 $ 13.10 Granted 61,768 24,800 36,968 $ 7.90 Vested (48,315 ) (25,275 ) (23,040 ) $ 9.72 Forfeitures — — — $ — Outstanding at June 30, 2018 347,274 310,305 36,969 $ 12.43 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of composition of provision for income taxes | The composition of our provision for income taxes is as follows: Six Months Ended June 30, 2018 2017 ($ in thousands) Texas margin tax $ 95 $ — Canadian income tax 55 — Total provision for income taxes $ 150 $ — |
EARNINGS PER COMMON UNIT (Table
EARNINGS PER COMMON UNIT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per unit | Basic and diluted earnings per unit for the three months ended June 30, 2018 , and 2017 is calculated as follows: Continuing Discontinued Consolidated Three Months Ended June 30, 2018 2017 2018 2017 2018 2017 ($ in thousands, except unit and per unit data) Net income (loss) used to compute earnings (loss) per common unit, basic $ 9,428 $ (3,425 ) $ — $ (2,657 ) $ 9,428 $ (6,082 ) Unrealized (gain) loss on fair value of warrant — (3,008 ) — — — (3,008 ) Net income (loss) used to compute earnings (loss) per common unit, diluted $ 9,428 $ (6,433 ) $ — $ (2,657 ) $ 9,428 $ (9,090 ) Weighted average common units outstanding 31,029,213 30,147,725 31,029,213 30,147,725 31,029,213 30,147,725 Weighted average units deemed participating securities 253,467 — 253,467 — 253,467 — Weighted average number of common units outstanding - basic 31,282,680 30,147,725 31,282,680 30,147,725 31,282,680 30,147,725 Weighted average potentially dilutive units outstanding 18,348 — 18,348 — 18,348 — Add incremental units from assumed exercise of warrants 138,926 55,333 138,926 55,333 138,926 55,333 Weighted average number of common units outstanding - diluted 31,439,954 30,203,058 31,439,954 30,203,058 31,439,954 30,203,058 Earnings (loss) per unit, basic $ 0.30 $ (0.11 ) $ — $ (0.09 ) $ 0.30 $ (0.20 ) Earnings (loss) per unit, diluted $ 0.30 $ (0.21 ) $ — $ (0.09 ) $ 0.30 $ (0.30 ) Basic and diluted earnings per unit for the six months ended June 30, 2018 , and 2017 is calculated as follows: Continuing Discontinued Consolidated Six Months Ended June 30, 2018 2017 2018 2017 2018 2017 ($ in thousands, except unit and per unit data) Net income (loss) used to compute earnings (loss) per common unit, basic $ 10,914 $ (14,815 ) $ — $ (2,657 ) $ 10,914 $ (17,472 ) Unrealized (gain) loss on fair value of warrant — (2,312 ) — — — (2,312 ) Net income (loss) used to compute earnings (loss) per common unit, diluted $ 10,914 $ (17,127 ) $ — $ (2,657 ) $ 10,914 $ (19,784 ) Weighted average common units outstanding 31,013,258 30,104,613 31,013,258 30,104,613 31,013,258 30,104,613 Weighted average units deemed participating securities 234,759 — 234,759 — 234,759 — Weighted average number of common units outstanding - basic 31,248,017 30,104,613 31,248,017 30,104,613 31,248,017 30,104,613 Weighted average potentially dilutive units outstanding 14,187 — 14,187 — 14,187 — Add incremental units from assumed exercise of warrants 141,078 192,383 141,078 192,383 141,078 192,383 Weighted average number of common units outstanding - diluted 31,403,282 30,296,996 31,403,282 30,296,996 31,403,282 30,296,996 Earnings (loss) per unit, basic $ 0.35 $ (0.49 ) $ — $ (0.09 ) $ 0.35 $ (0.58 ) Earnings (loss) per unit, diluted $ 0.35 $ (0.57 ) $ — $ (0.09 ) $ 0.35 $ (0.66 ) |
RECURRING FAIR VALUE MEASUREM24
RECURRING FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of outstanding derivative instruments and their classifications within Consolidated Balance Sheets | The fair values of outstanding derivative instruments and warrant and their classifications within our Condensed Consolidated Balance Sheets are summarized as follows: June 30, 2018 December 31, 2017 Classification ($ in thousands) Warrant liability $ 2,379 $ 2,811 Other long-term liabilities |
Schedule of effect of derivative instruments on Condensed Consolidated Statements of Operations | The effect of derivative instruments, none of which has been designated for hedge accounting, on our Condensed Consolidated Statements of Operations was as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Classification ((income) expense $ in thousands) Interest rate swaps $ — $ (8 ) $ — $ (64 ) Interest expense, net Warrant 244 (3,008 ) (432 ) (2,312 ) Other expense (income) $ 244 $ (3,016 ) $ (432 ) $ (2,376 ) |
SUPPLEMENTAL CASH FLOW DISCLO25
SUPPLEMENTAL CASH FLOW DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental disclosures of Consolidated Statements of Cash Flows | The following supplemental disclosures may assist in the understanding of our Condensed Consolidated Statements of Cash Flows: Six Months Ended June 30, 2018 2017 ($ in thousands) Cash paid for interest, net of capitalized interest $ 8,047 $ 6,934 Cash paid for income taxes, net of refunds $ 28 $ 15 Issuance of equity $ 5,974 $ — Purchases of PP&E accrued but not paid at period-end $ 2,114 $ 1,115 Purchases of PP&E accrued in a prior period and paid in the current period $ 11,372 $ 170 |
ASSET ACQUISITION SAN ANTONIO A
ASSET ACQUISITION SAN ANTONIO ACQUISITION (Details) - USD ($) | Apr. 12, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Business Acquisition [Line Items] | |||
Cash consideration paid | $ 55,806,000 | $ 3,403,000 | |
Osburn Materials | |||
Business Acquisition [Line Items] | |||
Cash consideration paid | $ 20,000,000 | ||
Transaction costs | 434,000 | ||
Second Lien Senior Secured Term Loan Facility | Secured Debt [Member] | |||
Business Acquisition [Line Items] | |||
Debt Instrument, Face Amount | $ 40,000,000 |
ASSET ACQUISITION Oklahoma (Det
ASSET ACQUISITION Oklahoma (Details) | May 11, 2018 |
Business Acquisition [Line Items] | |
Lease term | 25 years |
OTHER FINANCIAL DATA OTHER FINA
OTHER FINANCIAL DATA OTHER FINANCIAL DATA - Revenues (Details) T in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($)T | Jun. 30, 2017USD ($)T | Jun. 30, 2018USD ($)T | Jun. 30, 2017USD ($)T | |
Disaggregation of Revenue [Line Items] | ||||
Tons sold | T | 1,589 | 1,392 | 3,092 | 2,643 |
Revenues | $ | $ 101,842 | $ 82,602 | $ 208,592 | $ 157,946 |
frac sand | ||||
Disaggregation of Revenue [Line Items] | ||||
Tons sold | T | 1,519 | 1,284 | 2,956 | 2,529 |
Revenues | $ | $ 100,788 | $ 80,909 | $ 206,759 | $ 156,091 |
Non- frac sand | ||||
Disaggregation of Revenue [Line Items] | ||||
Tons sold | T | 70 | 108 | 136 | 114 |
Revenues | $ | $ 1,054 | $ 1,693 | $ 1,833 | $ 1,855 |
OTHER FINANCIAL DATA - Disconti
OTHER FINANCIAL DATA - Discontinued operations (Details) - USD ($) $ in Thousands | Aug. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Purchase price | $ 167,700 | |||
Write-down of escrow receivable | $ (2,657) | $ 0 | $ (2,657) | |
General escrow | Fuel Business | Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Escrow Deposit | $ 7,000 | |||
Escrow repayment date | 54 months | |||
Hydrotreator escrow [Member] | Fuel Business | Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Escrow Deposit | $ 4,000 | |||
Renewable Fuel Standard escrow | Fuel Business | Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Escrow Deposit | 2,250 | |||
Pipeline escrow | Fuel Business | Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Escrow Deposit | $ 1,000 |
OTHER FINANCIAL DATA - Private
OTHER FINANCIAL DATA - Private Placement (Details) - $ / shares | Aug. 15, 2016 | Aug. 08, 2016 | Jun. 02, 2016 |
Other Financial Data Disclosure [Abstract] | |||
Number of securities called by warrants (in units) | 890,000 | 370,000 | |
Exercise price of warrants (in dollars per unit) | $ 10.82 | $ 10.82 |
OTHER FINANCIAL DATA - Allowanc
OTHER FINANCIAL DATA - Allowance for Doubtful Accounts and Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Other Financial Data Disclosure [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $ 37 | $ 17 |
Sand finished goods | 10,019 | 12,914 |
Sand work in process | 9,014 | 14,650 |
Sand raw materials and supplies | 179 | 261 |
Inventories | $ 19,212 | $ 27,825 |
OTHER FINANCIAL DATA - Prepaid
OTHER FINANCIAL DATA - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | ||
Schedule of Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |||
Prepaid mining costs | $ 4,970 | $ 1,011 | |
Prepaid lease assets, current | [1] | 2,322 | 2,496 |
Prepaid insurance | 788 | 875 | |
Prepaid transload services | 636 | 1,274 | |
Other | 867 | 675 | |
Prepaid Expense and Other Assets, Current | $ 9,583 | $ 6,331 | |
Minimum | |||
Schedule of Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |||
Capitalized Transportation Costs, Amortization Period | 5 years | ||
Maximum | |||
Schedule of Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |||
Capitalized Transportation Costs, Amortization Period | 7 years | ||
[1] | The cost to transport leased railcars from the manufacturer to our site for initial placement in service is capitalized and amortized over the term of the lease (typically five to seven years). This balance reflects the current portion of these capitalized costs. |
OTHER FINANCIAL DATA - Property
OTHER FINANCIAL DATA - Property, Plant and Equipment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Property, plant and equipment | |||||
Total cost | $ 316,692,000 | $ 316,692,000 | $ 271,672,000 | ||
Accumulated depreciation and depletion | 94,380,000 | 94,380,000 | 85,702,000 | ||
Net property, plant and equipment | 222,312,000 | 222,312,000 | 185,970,000 | ||
Non-current assets held for sale | 940,000 | 940,000 | 292,000 | ||
Depreciation and depletion expense | 8,900,000 | $ 8,800,000 | |||
Interest Paid, Capitalized | 700,000 | 1,100,000 | |||
Machinery and equipment | |||||
Property, plant and equipment | |||||
Total cost | [1] | 109,076,000 | 109,076,000 | 92,353,000 | |
Buildings and improvements | |||||
Property, plant and equipment | |||||
Total cost | [1] | 66,149,000 | 66,149,000 | 66,444,000 | |
Mineral reserves | |||||
Property, plant and equipment | |||||
Total cost | 49,091,000 | 49,091,000 | 49,091,000 | ||
Land and improvements | |||||
Property, plant and equipment | |||||
Total cost | [1] | 48,897,000 | 48,897,000 | 45,567,000 | |
Construction in progress | |||||
Property, plant and equipment | |||||
Total cost | 40,958,000 | 40,958,000 | 15,696,000 | ||
Capitalized reclamation costs | |||||
Property, plant and equipment | |||||
Total cost | $ 2,521,000 | $ 2,521,000 | $ 2,521,000 | ||
[1] | Includes assets under capital lease |
OTHER FINANCIAL DATA - Intangib
OTHER FINANCIAL DATA - Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Intangible Assets Other Than Goodwill | |||
Cost | $ 8,112 | ||
Accumulated Amortization | 6,448 | ||
Net | $ 61 | 1,664 | |
Amortization expense | 1,300 | $ 1,600 | |
Patents | |||
Intangible Assets Other Than Goodwill | |||
Cost | 7,443 | ||
Accumulated Amortization | 6,188 | ||
Net | 1,255 | ||
Supply and transportation agreements | |||
Intangible Assets Other Than Goodwill | |||
Cost | 569 | ||
Accumulated Amortization | 226 | ||
Net | 343 | ||
Non-compete agreement | |||
Intangible Assets Other Than Goodwill | |||
Cost | 100 | 100 | |
Accumulated Amortization | 39 | 34 | |
Net | $ 61 | $ 66 |
OTHER FINANCIAL DATA - Other As
OTHER FINANCIAL DATA - Other Assets, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | ||
Schedule of Other Assets [Line Items] | |||
Deferred lease asset | [1] | $ 8,750 | $ 8,775 |
Prepaid lease assets, net of current portion | [2] | 6,046 | 7,153 |
Escrow receivable, non-current | [3] | 5,862 | 5,684 |
Other Assets, Miscellaneous, Noncurrent | 357 | 2,810 | |
Other | $ 21,015 | $ 24,422 | |
Minimum | |||
Schedule of Other Assets [Line Items] | |||
Capitalized Transportation Costs, Amortization Period | 5 years | ||
Maximum | |||
Schedule of Other Assets [Line Items] | |||
Capitalized Transportation Costs, Amortization Period | 7 years | ||
[1] | During 2016, we completed negotiations with various railcar lessors pursuant to which we terminated future orders of railcars, deferred future railcar deliveries and reduced and deferred payments on existing leases. The cost of deferring future railcar deliveries was recorded as a deferred lease asset. This asset will be amortized over the terms of the associated leases as those railcars enter service. | ||
[2] | The cost to transport leased railcars from the manufacturer to our site for initial placement in service is capitalized and amortized over the term of the lease (typically five to seven years). This balance reflects the non-current portion of these capitalized costs. | ||
[3] | Non-current receivables are recorded at net present value of estimated recoveries and will be adjusted as contingencies are resolved. |
OTHER FINANCIAL DATA - Schedule
OTHER FINANCIAL DATA - Schedule of Other Liabitlies (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Accrued Liabilities [Abstract] | ||
Fuel sale related liabilities | $ 2,480 | $ 2,475 |
Salaries and other employee-related | 2,219 | 4,633 |
Logistics | 2,125 | 5,898 |
Current portion of business acquisition obligations | 1,729 | 1,952 |
Mining related liabilities, current | 871 | 170 |
Sales, excise, property and income taxes | 864 | 1,953 |
Deferred compensation | 848 | 848 |
Sand purchases and royalties | 610 | 311 |
Accrued interest | 337 | 2,552 |
Construction Payable, Current | 160 | 7,122 |
Current portion of contract termination | 85 | 210 |
Accrued Professional Fees, Current | 32 | 373 |
Other | 681 | 1,221 |
Accrued liabilities | $ 13,041 | $ 29,718 |
OTHER FINANCIAL DATA - Other Lo
OTHER FINANCIAL DATA - Other Long-term Liabilities and Long-term Promissory Note (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | Aug. 08, 2016 | Jun. 02, 2016 | ||
Other Financial Data Disclosure [Abstract] | |||||||
Deferred lease obligation | [1] | $ 11,376 | $ 9,561 | ||||
Long-term promissory note | 4,370 | 9,370 | |||||
Asset retirement obligation | 2,837 | 2,792 | |||||
Warrants | 2,379 | 2,811 | |||||
Contract and project terminations | 884 | 5,348 | |||||
Total | 21,846 | $ 29,882 | |||||
Debt Instrument [Line Items] | |||||||
Repayments of Other Long-term Debt | 5,882 | $ 0 | |||||
Number of securities called by warrants (in units) | 890,000 | 370,000 | |||||
Payment in Kind (PIK) Note | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | $ 8,000 | ||||||
Interest rate, stated percentage | 10.00% | ||||||
Repayments of Other Long-term Debt | $ 1,500 | ||||||
[1] | We recognize lease expense for operating leases on a straight-line basis over the term of the lease, beginning on the date we take possession of the property. The difference between the cash paid to the lessor and the amount recognized as lease expense on a straight-line basis is included in deferred lease obligation |
OTHER FINANCIAL DATA - Contract
OTHER FINANCIAL DATA - Contract and Project Terminations (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2016 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss on Contract Termination | $ 1,900 | ||
contract termination charges accrued | $ 4,000 | ||
Schedule of contract termination liabilities [Roll Forward] | |||
Balance at December 31, 2017 | 5,557 | ||
Adjustments | (221) | ||
Accretion | 15 | ||
Payments | (4,382) | ||
Balance at June 30, 2018 | $ 969 | ||
Unsecured Debt | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Debt Instrument, Face Amount | $ 4,000 | ||
Interest rate, stated percentage | 5.00% |
OTHER FINANCIAL DATA - Mining a
OTHER FINANCIAL DATA - Mining and Wet Sand Processing Agreement, Fair Value and Retirement Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 08, 2016 | Apr. 30, 2014 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Aug. 15, 2016 | Jun. 02, 2016 |
Mining and wet sand processing agreement [Abstract] | |||||||||
Purchase commitment, period of contract | 5 years | ||||||||
Number of securities called by warrants (in units) | 890,000 | 370,000 | |||||||
Exercise period | 6 years | ||||||||
Exercise price of warrants (in dollars per unit) | $ 10.82 | $ 10.82 | |||||||
Fair value of warrants (in dollars per unit) | $ 5.56 | ||||||||
Warrant liability | $ 2,379 | $ 2,379 | $ 2,811 | ||||||
Fair Value Adjustment of Warrants | $ 244 | $ (3,008) | $ (432) | $ (2,312) | |||||
Retirement plan | |||||||||
Percentage of employers matching contribution for participants' contributions | 100.00% | ||||||||
Percentage of employers matching contribution for participants' pay (up to 5%) | 5.00% | ||||||||
Employer contributions | $ 500 | $ 100 |
OTHER FINANCIAL DATA - Concentr
OTHER FINANCIAL DATA - Concentration of Credit Risk (Details) - Customer concentration risk | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2016 | |
Accounts Receivable | Customer A | |||
Concentration of Credit Risk | |||
Concentration of risk percentage | 33.00% | 20.00% | |
Accounts Receivable | Customer B | |||
Concentration of Credit Risk | |||
Concentration of risk percentage | 20.00% | 16.80% | |
Accounts Receivable | Customer C | |||
Concentration of Credit Risk | |||
Concentration of risk percentage | 13.00% | ||
Net accounts receivable balance | Customer A | |||
Concentration of Credit Risk | |||
Concentration of risk percentage | 27.00% | 16.00% | |
Net accounts receivable balance | Customer B | |||
Concentration of Credit Risk | |||
Concentration of risk percentage | 16.00% | ||
Net accounts receivable balance | Customer D | |||
Concentration of Credit Risk | |||
Concentration of risk percentage | 11.00% | 26.00% |
OTHER FINANCIAL DATA - Geograph
OTHER FINANCIAL DATA - Geographical Data and Interim Indicators of Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 101,842 | $ 82,602 | $ 208,592 | $ 157,946 |
Other than US | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Long-Lived Assets | $ 0 | 0 | ||
CANADA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 16,700 | $ 5,400 |
LONG-TERM DEBT - SCHEDULE OF DE
LONG-TERM DEBT - SCHEDULE OF DEBT AND REVOLVING CREDIT FACILITY (Details) | Jan. 05, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 12, 2017USD ($) |
Debt Instrument [Line Items] | ||||
Less: Deferred financing costs, net | $ (19,745,000) | $ (7,349,000) | ||
Total debt | 198,267,000 | 176,351,000 | ||
Less current portion | (10,750,000) | 0 | ||
Long-term debt | 187,517,000 | 176,351,000 | ||
Other disclosures | ||||
Write off of Deferred Debt Issuance Cost | 3,900,000 | |||
Amount available under the facility | $ 60,600,000 | |||
New Revolving Credit Agreement [Member] | ||||
Other disclosures | ||||
Weighted-average interest rate (as a percent) | 8.56% | |||
Second Lien Senior Secured Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility - principal | $ 215,000,000 | 40,000,000 | ||
Less current portion | (10,750,000) | 0 | ||
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility - principal | $ 3,012,000 | $ 143,700,000 | ||
New Revolving Credit Agreement [Member] | New Revolving Credit Agreement [Member] | ||||
Other disclosures | ||||
Maximum borrowing capacity | $ 75,000,000 | |||
New Revolving Credit Agreement [Member] | Letter of Credit | ||||
Other disclosures | ||||
Maximum borrowing capacity | 20,000,000 | |||
New Revolving Credit Agreement [Member] | Revolving credit facility | ||||
Other disclosures | ||||
Line of Credit Facility, Covenant Terms, Liquidity Requirement | $ 20,000,000 | |||
Covenant Terms, Interest Coverage Ratio | 1.10 | |||
New Revolving Credit Agreement [Member] | Revolving credit facility | Minimum | ||||
Other disclosures | ||||
Line of Credit Facility Covenant Terms Allowed Subsidiaries Distributions Leverage Ratio | 3 | |||
New Revolving Credit Agreement [Member] | Revolving credit facility | Maximum | ||||
Other disclosures | ||||
Line of Credit Facility Covenant Terms Allowed Subsidiaries Distributions Leverage Ratio | 5.50 | |||
New Revolving Credit Agreement [Member] | Revolving credit facility | Leverage Ratio [Member] | Minimum | ||||
Other disclosures | ||||
Basis points (as a percent) | 0.75% | |||
New Revolving Credit Agreement [Member] | Revolving credit facility | Leverage Ratio [Member] | Maximum | ||||
Other disclosures | ||||
Basis points (as a percent) | 1.25% | |||
New Revolving Credit Agreement [Member] | Revolving credit facility | LIBOR | Minimum | ||||
Other disclosures | ||||
Basis points (as a percent) | 1.75% | |||
New Revolving Credit Agreement [Member] | Revolving credit facility | LIBOR | Maximum | ||||
Other disclosures | ||||
Basis points (as a percent) | 2.25% | |||
Second Lien Senior Secured Term Loan Facility | Term loan | ||||
Other disclosures | ||||
Debt Instrument, Face Amount | $ 40,000,000 |
LONG-TERM DEBT - SECOND LIEN NO
LONG-TERM DEBT - SECOND LIEN NOTE PURCHASE AGREEMENT (Details) | Jan. 05, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jan. 31, 2018shares | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Quarterly principal payment, year one, percentage | 1.25% | ||||
Quarterly principal payment, after year one, percentage | 1.875% | ||||
Less current portion | $ 10,750,000 | $ 0 | |||
Issuance of equity | 5,974,000 | $ 0 | |||
Issuance of equity | 5,974,000 | ||||
Second Lien Senior Secured Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Less current portion | 10,750,000 | $ 0 | |||
Second Lien Note Purchase Agreement | |||||
Debt Instrument [Line Items] | |||||
Common Unit, Issued | shares | 814,295 | ||||
HPS Investment Partners, LLC [Member] | Second Lien Note Purchase Agreement | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Covenant Terms, Liquidity Requirement | $ 20,000,000 | ||||
Interest rate, stated percentage | 11.00% | ||||
HPS Investment Partners, LLC [Member] | Second Lien Note Purchase Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility Covenant Terms Allowed Subsidiaries Distributions Leverage Ratio | 6 | ||||
Covenant Terms, Interest Coverage Ratio | 2 | ||||
Interest rate, stated percentage | 12.00% | ||||
HPS Investment Partners, LLC [Member] | Second Lien Note Purchase Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility Covenant Terms Allowed Subsidiaries Distributions Leverage Ratio | 3 | ||||
Covenant Terms, Interest Coverage Ratio | 1.10 | ||||
Interest rate, stated percentage | 10.00% | ||||
HPS Investment Partners, LLC [Member] | Second Lien Note Purchase Agreement | Second Lien Senior Secured Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 215,000,000 | ||||
Limited Partner Common Units | |||||
Debt Instrument [Line Items] | |||||
Issuance of equity | $ 5,974,000 |
LONG-TERM DEBT - COVENANTS (Det
LONG-TERM DEBT - COVENANTS (Details) $ in Millions | Jun. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Amount available under the facility | $ 60.6 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Related Party Transactions [Abstract] | ||||
Wages and employee-related costs | [1] | $ 14,448 | $ 8,263 | |
Accounts receivable, net | 154 | $ 962 | ||
Accounts payable and accrued liabilities | 819 | $ 800 | ||
Total compensation of related party | $ 125 | |||
[1] | We do not have any employees. Our general partner manages our human resource assets, including fringe benefits and other employee-related charges. We routinely and regularly reimburse our general partner for any employee-related costs paid on our behalf, and report such costs as operating expenses. |
EQUITY-BASED COMPENSATION (Deta
EQUITY-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2013 | May 14, 2013 | |
Equity-based compensation | ||||||
Non-cash equity-based compensation recorded in selling, general and administrative expenses (in dollars) | $ 860 | $ 677 | ||||
Unrecognized compensation expense | $ 1,300 | $ 1,300 | ||||
Weighted average period during which compensation expense will be recognized | 11 months 27 days | |||||
LTIP | ||||||
Equity-based compensation | ||||||
Number of common units authorized for issuance (in units) | 2,321,968 | |||||
Number of common units granted during period (in units) | 61,768 | |||||
Total Units | ||||||
Outstanding, beginning balance (in units) | 333,821 | 333,821 | ||||
Granted (in units) | 61,768 | |||||
Vested (in units) | (48,315) | |||||
Forfeiture (in units) | 0 | |||||
Outstanding, ending balance (in units) | 347,274 | 347,274 | ||||
Fair Value per Unit at Award Date | ||||||
Outstanding, beginning balance (in dollars per unit) | $ 13.10 | $ 13.10 | ||||
Granted (in dollars per unit) | 7.90 | |||||
Vested (in dollars per unit) | 9.72 | |||||
Forfeitures (in dollars per unit) | 0 | |||||
Outstanding, ending balance (in dollars per unit) | $ 12.43 | $ 12.43 | ||||
LTIP | Phantom Units | ||||||
Equity-based compensation | ||||||
Vesting period | 1 year | |||||
Number of common units granted during period (in units) | 24,800 | |||||
Total Units | ||||||
Outstanding, beginning balance (in units) | 310,780 | 310,780 | ||||
Granted (in units) | 24,800 | |||||
Vested (in units) | (25,275) | |||||
Forfeiture (in units) | 0 | |||||
Outstanding, ending balance (in units) | 310,305 | 310,305 | ||||
LTIP | Phantom Units | Other employees | ||||||
Equity-based compensation | ||||||
Vesting period | 67 months | |||||
LTIP | Phantom Units | Other employees | Minimum | ||||||
Equity-based compensation | ||||||
Vesting period | 24 months | |||||
LTIP | Phantom Units | Other employees | Maximum | ||||||
Equity-based compensation | ||||||
Vesting period | 36 months | |||||
LTIP | Phantom Units | Directors and other employees | ||||||
Equity-based compensation | ||||||
Period within which distributions are payable following the date on which the award vests | 45 days | |||||
Unpaid liability for distribution equivalent rights | $ (800) | |||||
LTIP | Phantom Units | Officers and certain employees | ||||||
Equity-based compensation | ||||||
Number of common units granted during period (in units) | 24,800 | |||||
Total Units | ||||||
Granted (in units) | 24,800 | |||||
LTIP | Phantom Units | Officers and certain employees | Minimum | ||||||
Equity-based compensation | ||||||
Vesting period | 2 years | |||||
LTIP | Restricted Units | ||||||
Equity-based compensation | ||||||
Number of common units granted during period (in units) | 36,968 | |||||
Total Units | ||||||
Outstanding, beginning balance (in units) | 23,041 | 23,041 | ||||
Granted (in units) | 36,968 | |||||
Vested (in units) | (23,040) | |||||
Forfeiture (in units) | 0 | |||||
Outstanding, ending balance (in units) | 36,969 | 36,969 |
INCOME TAXES - Continuing Opera
INCOME TAXES - Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Composition of provision for income taxes | ||||
Texas margin tax | $ 95 | $ 0 | ||
Canadian income tax | 55 | 0 | ||
Total provision for income taxes | $ 53 | $ 0 | $ 150 | $ 0 |
Effective margin tax rate (as a percent) | 0.375% |
EARNINGS PER COMMON UNIT (Detai
EARNINGS PER COMMON UNIT (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Earnings per common unit | |||||
Net income (loss) used to compute earnings (loss) per common unit, basic | $ 9,428 | $ (3,425) | $ 10,914 | $ (14,815) | |
Income (loss) from discontinued operations, net of taxes | 0 | (2,657) | 0 | (2,657) | |
Net income (loss) | 9,428 | (6,082) | 10,914 | (17,472) | |
Unrealized (gain) loss on fair value of warrant for continuing operations | 0 | (3,008) | 0 | (2,312) | |
Unrealized (gain) loss on fair value of warrant for discontinued operations | 0 | 0 | 0 | 0 | |
Unrealized (gain) Loss on fair value of warrant | 0 | (3,008) | 0 | (2,312) | |
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Diluted | 9,428 | (6,433) | 10,914 | (17,127) | |
Net Income (Loss) from Discontinued Operations Available to Common Shareholders, Diluted | 0 | (2,657) | 0 | (2,657) | |
Net Income (Loss) Available to Common Stockholders, Diluted | $ 9,428 | $ (9,090) | $ 10,914 | $ (19,784) | |
Weighted average common units outstanding | 31,029,213 | 30,147,725 | 31,013,258 | 30,104,613 | |
Weighted average units deemed participating securities | 253,467 | 0 | 234,759 | 0 | |
Weighted average number of common units outstanding - basic | [1] | 31,282,680 | 30,147,725 | 31,248,017 | 30,104,613 |
Weighted average potentially dilutive units outstanding | 18,348 | 0 | 14,187 | 0 | |
Add incremental units from assumed exercise of warrants | 138,926 | 55,333 | 141,078 | 192,383 | |
Weighted average number of common units outstanding - diluted | 31,439,954 | 30,203,058 | 31,403,282 | 30,296,996 | |
Income (Loss) from Continuing Operations, Per Basic Unit | [1] | $ 0.30 | $ (0.11) | $ 0.35 | $ (0.49) |
Income (Loss) from Discontinued Operations, Net of Tax, Per Basic Unit | [1] | 0 | (0.09) | 0 | (0.09) |
Earnings (loss) per unit, basic | [1] | 0.30 | (0.20) | 0.35 | (0.58) |
Income (Loss) from Continuing Operations, Per Diluted Unit | [1] | 0.30 | (0.21) | 0.35 | (0.57) |
Income (Loss) from Discontinued Operations, Net of Tax, Per Diluted Unit | [1] | 0 | (0.09) | 0 | (0.09) |
Earnings (loss) per unit, diluted | [1] | $ 0.30 | $ (0.30) | $ 0.35 | $ (0.66) |
Phantom Units | |||||
Earnings per common unit | |||||
Outstanding phantom units excluded from computation of earnings per common unit (in units) | 93,806 | 93,806 | |||
[1] | See Note 8. |
RECURRING FAIR VALUE MEASUREM49
RECURRING FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 08, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Aug. 15, 2016 | Jun. 02, 2016 |
Derivative instruments | |||||||
Number of securities called by warrants (in units) | 890,000 | 370,000 | |||||
Exercise price of warrants (in dollars per unit) | $ 10.82 | $ 10.82 | |||||
Exercise period | 6 years | ||||||
Fair value of warrants (in dollars per unit) | $ 5.56 | ||||||
Fair Value Adjustment of Warrants | $ 244 | $ (3,008) | $ (432) | $ (2,312) | |||
Other expense (income) | |||||||
Derivative instruments | |||||||
Fair Value Adjustment of Warrants | $ 244 | $ (3,008) | $ (432) | $ (2,312) |
RECURRING FAIR VALUE MEASUREM50
RECURRING FAIR VALUE MEASUREMENTS - Balance Sheet Classifications (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair values of outstanding derivative instruments and their classifications within Consolidated Balance Sheets | ||
Warrant liability | $ 2,379 | $ 2,811 |
Other long-term liabilities | ||
Fair values of outstanding derivative instruments and their classifications within Consolidated Balance Sheets | ||
Warrant liability | $ 2,379 | $ 2,811 |
RECURRING FAIR VALUE MEASUREM51
RECURRING FAIR VALUE MEASUREMENTS - Effect on Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Gain or loss on derivative instruments | ||||
Fair Value Adjustment of Warrants | $ 244 | $ (3,008) | $ (432) | $ (2,312) |
Other expense (income) | ||||
Gain or loss on derivative instruments | ||||
Fair Value Adjustment of Warrants | 244 | (3,008) | (432) | (2,312) |
Non designated | ||||
Gain or loss on derivative instruments | ||||
Loss or gain on derivatives | (244) | 3,016 | 432 | 2,376 |
Non designated | Interest rate swaps | Interest expense, net | ||||
Gain or loss on derivative instruments | ||||
Loss or gain on derivatives | $ 0 | $ 8 | $ 0 | $ 64 |
SUPPLEMENTAL CASH FLOW DISCLO52
SUPPLEMENTAL CASH FLOW DISCLOSURES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest, net of capitalized interest | $ 8,047 | $ 6,934 |
Income Taxes Paid, Net | 28 | 15 |
Issuance of equity | 5,974 | 0 |
Purchases of PP&E accrued but not paid at period-end | 2,114 | 1,115 |
Purchases of PP&E accrued in a prior period and paid in the current period | $ 11,372 | $ 170 |