CLMT - Earnings call transcript Q3 2019 | Calumet Specialty Products Partners, L.P.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2019 Calumet Specialty Products Partners Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to Joseph Caminiti, Investor Relations.

Joseph Caminiti

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

of as meaning on allow XXXX. proceed, well Such Act management's made various everyone the may to Before the XXE them our and this within of as we to we the me call, statements of based them. beliefs Section by that of statements remind each the assumptions during are course of based case forward-looking information Exchange provide Securities available currently in on

Although our assurances expectations will partnership forward-looking the its such management general correct. prove partner to that in these be management believes any the reflected nor are provide neither expectations statements reasonable, our that can

may release for this Please as well and latest morning to partnership's call. refer list to made and the differ a was our of our Exchange issued this forward-looking the on from as that that statements could cause filings affect Securities Commission actual them with results our press factors

conference a as press you earlier As a that today's will in now PDF indicated accompany reminder, the download release on made we presentation the the remarks of may issued slides today. call

access XXX-XXX-XXXX. can and at Relations Investor be may available hours our IR section www.calumetspecialty.com. slides on at of few Relations these call Alpha website You you also will in within Group Also our support replay of Investor the this a webcast contact site for a

to pass I'll call the Tim? that, With Tim.

Timothy Go

success. cultivating our by determination program to improvement implemented and changes quarter everyone. this Calumet made we're and strong and through growth encouraged goals. of The significant have of results structural that market who financial overcome operating focus on and delivering our transformation Joe commitments, Thank this proud employees deleveraging good third morning delivered us Self-Help I'm and you, to significant enabled culture progress our their of a are year. and toward we the drive and I'm headwinds continuous Calumet

Slide year. highlights for the noncash cash profitability through from increase after X, in of comparable This adjusted Starting $XX operations Calumet’s EBITDA I'll operations, some excluding the on over of improvement walk translated from negative million from XX% year's a third quarter. was realized up of into million inventory flow quarter significant We key $X $XX step This adjustments. million quarter. last flow of a the cash last of business

directly at driven throughput operating These four part by which our contributions to record improved initiative, and ongoing were utilization plant facilities our results of contributed in level sites. our Self-Help from at records

results Calumet’s These strong also further balance sheet. drove improvements to financial

improved of Our and year-over-year. leverage X.X since times adjustments, leverage debt full ratio quarter. last year three down sits X.X third our at times XX than excluding After the from months this a net in to X.X X.X trailing year's defined of second end turns as quarter more quarter EBITDA times as LCM from down noncash times down LIFO approximately and

over the imperatives has three strategic last our of Calumet’s been sheet most Deleveraging years. balance one important

We of which the third during repurchased our also brought in the repurchases year-to-date. $XXX $XX bonds quarter million million to open bond market,

and to which by our in credit they liquidity has credit networking us July sheet family terms our obtain corporate has Moody's trade recognized balance run to business. helped stronger with when further improved rating capital enabled vendors, needed reduce improved Our was upgraded This the to BX. our

Finally, on last our earnings advanced call. three since strategic we've objectives

market, our in the notes XXXX total by the long-term unsecured refinanced we and during million debt $XXX First, reduced XXXX.

our our business. basis, capital core focus the which structure while will we refinery continuing San specialty a on on accretive Second, Antonio to divested transition enhance credit our

Keith X. growing Officer complete business. Financial transition pivot we help Eastman plans towards beginning announced the turnaround will has core our business experience specialty the to us in responsibilities of Chief third, the our Keith specialty and to Chemical January And with Jennings, and

you to our our reporting. If look issued financial this will changes at some earnings we morning, see you release that

the This we our of segments. to detailed we through our financials, the transfer creating between During resegmenting shifting segments, addition on corporate included and Slide change process two market in operating which to quarter, pricing went segment, a based X.

aligns actively because our the and business We views adjusting greater earnings at this products operating into power disclosures segments, made our with this specialty core to management reporting of portfolio asset enhances our industry practices, our transparency a it on focus when we and provides it change are is our because reporting our it how time business.

the on corporate market largely specialty to is is of allocations change offset to effect because based re-segmentation roughly the specialty the prices. by transfer neutral segment our The removing

On market-based our as business. fuels from segment hand, the the allocations as business transition to inter of benefits other specifically the corporate removal both well for our fuels the Shreveport pricing

last our from results to the quarter to comparable. results compared third For the this have results earnings XXXX call, year make we re-segmented

eliminates for of liability carried Turning the crude inventories of partner sale that to pipeline on sheet $XX the balance our for million to million related includes TexStar networking $XX a commitment. for sale less transaction the oil the price announced adjustments San of and that refinery, The some the refinery. an and costs. also we its terminal X, transaction a This Slide capital transaction strategic sold we yesterday assets Antonio Calumet pipeline

transaction We it direction. have have business. our annual and refinery. our and pro to also down by times products. X.X the and leverage transformation strategic maintenance continues on flow basis. our ability fuels improving strategic is on San journey accretive, is of in the future It our the cash our the our the fits right that specialty willingness And eliminating volatile credit to that with specialty forma It immediately to in improves exposure capital our turnaround associated a our been reduces and clear it path market the to Antonio we act opportunities focus products both that shown This criteria, long-term move

X, loss or million cover financial Slide our income $X.XX performance basis on per Net the unit. the for $X.X to quarter for third of I'll Turning was a GAAP quarter. a

unfavorable noncash LCM positive was a in Excluding net a per LIFO or and associated positive with income unit. adjusted an $X.XX $X.X impairment million charges

Our a the LIFO up the for million $XX totaled XX% increase third adjusted After was $XX adjustments and quarter ago our significantly EBITDA unfavorable adjusted over million. LCM EBITDA period. year just over of excluding noncash quarter,

of is of [Indiscernible] EBITDA XX trailing continued shown slide. our chart the the performance right Our at chart the bottom reflects adjusted success the the program. in Self-Help months

captured the EBITDA profitability, company XX This you divestments. see this As Superior trailing totaled increase $XXX a last million the year. at for time excluding the trailing our million adjusted XX months record XX% represents $XXX Anchor compared can to and months

about of new talked quarter but we've a stood Over the few last execution. this records out in terms set, team's years, number that of we've our

market our has West a segments which headwinds this headwinds deliver a number detail significant overcame business done to hard improve in quarter, faced our to results. the these of both few in our will But that structurally team these minutes. of We work strong

over West? that, the With to will call I segment turn results. West to to talk the

West Griffin

Thanks Tim.

fuel’s will baseline that $XX.X the XX by adjusted comparable third figure quarter, quarter. million the Slide EBITDA our the year's you see shows quarter million improved We which from materially third last in to of quarter, our nearly the $XX.X the results headwinds from Starting the results versus period. last was in year's decrease reconciling waterfall margins. faced prior market evidenced year million significant X

function headwinds margin of Midland These and primarily a differentials. WCS crude were unfavorable

right EBITDA business million mix contributor We year-over-year accelerated the $XX low fuels change to also increase to before both the The had specialty contract. was positive $XX.X the million and performance businesses in respectively. some small margin in as most specialty across margin for the tolling weakness volumes termination of account due and which significant

Princeton with a turnaround saw part and level utilization facility mentioned the top meaningful a the increase year-over-year driven records improvement call. at we This year volumes basis. at was on activity last year, combined of this plant that We of the in record by throughput absence sales in our

$XX.X decreased in which costs million, small received quarter. exemptions RINs includes operating from the that Our we refinery

lower from compared the improved costs transportation minor prior to charges. $X.X year, EBITDA impairment with combined Our by some million

support by up more cost were that Self-Help those of expenses EBITDA our additional picked we our as initiatives. SG&A offset million through $X continue efforts. to $X.X Self-Help generated higher by the was than But million

X, XX% increase the As a our and generated segment sales year's These in Princeton Slide volumes, by core at downtime in and last specialty million absence shown on excluding of results profitability the LIFO, LCM $XX.X were which supported that year-over-year. increased solid by in utilization EBITDA period. higher adjusted plant occurred were largely driven

result EBITDA strong margin XX.X%, results of year's XX%. Our last of improvement versus mark adjusted

a our dynamic the Our grading high margin channels rationalization continue. to performances would of from skew we expect that efforts, through our benefit sales

which base and results headwind contributions some from in saw our the has generally that EBITDA market been have margin paraffinic much early Additionally, year. market, observed EBITDA the our we margin improved the the of recovery oil for to

profit $XX.XX solid in been have part year against barrel prior year. by as Gross well. the efforts per plans Even improvement we of business the versus executing and improvement Self-Help marked this

during third in which our starting product we run turnaround Shreveport the catalyst the at the Well, affected operations the quarter. facility, performance We yields had before days our results adversely by end affected at solid the were last of facility. of

up of will our impact run The the to which good plant news the set production restore performance us is will volumes. XXXX. for good turnaround during operational turnaround in fourth quarter start that should conditions, While the

that walks Slide period the a will similar figures $XXX is note year. for through X the to the business you million, Starting the compared year-to-date XXXX from previously reported base the results. specialty of results last of specialty EBITDA from you resegmented the year-to-date very to

that Self-Help margin to our the transfer million exit increases of margins point our business; line a in margin higher by related utilization shows lower volumes benefits This that substantial as business. as largely $XXX the of is by to with $XXX schedule, well in by corporate lighter improvement the The year-to-date reduce and improvements to attributable the million removal results overhead driven both efforts rates offset turnaround low from driven to move largely in is made pricing. Tim market in

Slide fuels to XX, highlight performance. Moving business our we

EBITDA excluding roughly adjusted LIFO nearly and Our $XX.X non-cash million, to up totaled adjustments, results compared prior the LCM year. X%

debottlenecking These fruit, our Antonio X.X% projects and differentials market. the by operational efforts utilization Self-Help particularly increase in have projects bear crude our such at side San evidenced continue overcome weaker on the more volumes. Shreveport the record the Again, to as in production Self-Help fuels than and

$XX we LCM in the contributed XXXX the Gross last realized related results barrel comparable crude RINs excluding of results by driven results. tightening to obligation, quarter, LIFO versus cents and differentials the In period. declined modestly which significant of million to year, $X.XX our the drove exemptions per that profit

$XX.XX per differential year. barrel, The compared while across WCS/WTI average average to differential by by last barrel tightened per $XX.XX the tightened the Midland/WTI quarter

Looking capability. forward, Shreveport the additional we as part our fourth in will debottlenecking crude an quarter, of further turnaround which project will at production implement the improve

year-to-date the Slide of On business comparison fuels year. a prior our profitability provide versus XX, we

we to EBITDA adjusted results First, out would increase for like XXXX. the in the reported previously the point resegmented versus

allocated corporate prices. This the of reflects by segment, both improvement expenses market results the to removal that well step in up transfer as the were fuel as moving to

between note adjustment to an the transfer You should that fuels. market Shreveport price is just really specialties

of talking largely Great is core has moving And pricing more has effect. forward, talked based start and core our as we all Shreveport specialty Antonio we will interaction asset. Since interaction, integrated an with Falls the a little about business effective is very no our market San about Shreveport. business transfer Shreveport

with million, months the to the are through of for essentially September adjusted $XXX.X flat EBITDA last nine XXXX Starting the million the results ending $XXX.X the nine of EBITDA of year adjusted months resegmented year. first results

by fuels function was a of the more driven part Great margins large of the fuels our and at production of Shreveport efforts refineries. activity million. increased turnaround The and from differentials offset totaled in by nearly year-over-year $XX uplift $XX tighter lighter debottlenecking some was This the the decline and crude Falls in significantly than at million in volumes,

of profitability value to inventories a the less our exemptions adjustments $XX results, contributed exemptions of our the year. operations million. in received million the $XX.X headwind, while far the XXXX last the costs Self-Help and headline to LIFO contributed $XX RINs value is LCM than over excellence million to received from and our represented have structural as operating Higher uplift

spending Year-to-date, spent our XX, maintenance capital full both We're of that a Calumet we our $XX the guidance of $XX with Slide detail within be million projects. year growth combination range maintaining and capital On for expectations has spending. $XX to million we on million. will

in the the anticipate that minimizing be turn XXXX. have We higher the objective as the of downtime the around expanded Shreveport we may end quarter during fourth we scope the at of for range with

sequential cash cash flow bridge second in quarter. position just $XX XX. this nearly $XXX.X Starting we Turning of as million operating quarter, a working year's the to capital additional million of of saw million. position end the of with We generated an of under against release Slide cash and $XX our

improvement of this to improvements in a third working in is About capital trade credit. due

you know, hand used our open $XX been redeem debt market to accord. on our in we've bonds roughly bonds this As cash of repurchasing and year and the million in levels reduce

We saw third down million drop a in party principally provider. due roughly a inventory cash $XX financing our to

spent growth million maintenance $XXX.X quarter as of position to and the capital we $XX quarter, in approximately bringing million Additionally, end. during our

the basis. XX trailing XX operations month Slide bridges from cash our on flow

produced had million. As negative flow you this see, operations at cash $XX nearly from year last our trailing can of results point

results to roughly generated million back across of reduced improvements the buying function through business segments. months results of both the significant our trailing contributed improved we of $XXX million executed our by as bonds. total captured amount prior We've Our debt have improved interest uplift of structural XX reduction year have earnings a roughly our costs, have versus $XX

we've inventory to capital working significant through cash On bills, last operations over improved net $XXX of lower capital in with top our year. reduction up of combined to million the as seen compared working that, trade tied a means credit in changes less

times priority Deleveraging continued cash past Slide been credit over the X.X than last continue excluding the more excluding LCM to has of of steady after months to three quarter turns top the our LIFO X.X metrics, Debt sheet adjustments. X.X the our the three as performance back beginning and to inventory in or leverage. our driven EBITDA strong in balance years from trailing has times EBITDA improvement XX flow XX, down and outlines quarter which our improved of and or XXXX. show results and This times dating number was adjustments. end noncash year reduction third full is

balance debt we year. the million we excess liquidity repurchase we spoke million bought cash back since notes of the and reduce [Technical quarter in XX beginning repurchases Utilizing originally issued, the to that flow XXX and the here our we meaningful the notes improve Difficulty] step Notably, notes XXX today. down from unsecured improved that Previously, refinanced million of XXXX and the of debt million the conducted we a have XXX to sheet. by our - the burden in the successfully we of XXXX have market, driven

credit helping in grade Our to in lenders improving achieved is This credit liquidity and outlook rating increase and been corporate acknowledged BX upgrade helpful Calumet suppliers efforts and leverage agencies be rating to which our an in have turn positions. to upgrade reduction. family July. company's boost vendors recently our has with this the

spite a million quarter availability our in of Our credit available on bonds comparable higher measured than revolving $XXX and million of time. last of on over liquidity is period XXX a hand facility that XX million cash year’s as repurchasing

XXXX. our hand we carried we XX, roughly how improved chart million an Two is XXXX April senior our in Slide three over after materially repurchasing you snapshot a shows our costs. $XXX more XXXX, burden burden notes on interest The than million, declined interest notes to side give annual redeeming secured the years. years On past ago, annual throughout today and by the which has the $XX interest left of

interest XXXX resulting debt expense our being down yield same had almost unsecured in of needed to amount XXXX at total our interest high for While XXXX. materially XX%, conditions as market. notes We the is stepped reflecting new the forecast we refinance, forecast the current in of we issued for unsecured an rate the

can the forecast million what see we number As XXX higher a table slightly in interest our Tim? hand will right year you of pay costs cash than on on the side the we next XXXX. be page, will only

Timothy Go

West. Thanks

through continued projects. $X.X capital to return quarter, the captured our small our uplift Slide Turning and total excellence operational our of focus This EBITDA million on came $XX.X year-to-date million. XX. high Calumet efforts in self-help bringing to third through

we commending specialty yields margin our projects improve for volumes due performance Specifically Shreveport PDA and mixed fields our crude specialty higher businesses at fuels margin, local higher business in to products. and debottlenecking better in sales for rent and the realized and - and various

drive gross are evidenced efforts these Combined, the hand helping greater side. performance, per profit on as barrel the chart top by left

As contribute continued through in to West working profitability, our visible mentioned, we the how and continue improvements manage capital our decline finished our goods inventory. inventories to to

and have production in produce in made meet the business the our We've we right time team amount product asphalt order sales at preserve much our right and manage how the between instituted significant margins. our right we demand accurately our to coordination improved and to changes to

chain offers Additionally, and opportunities our our efficiencies. to supply benefit ERP from we is to capabilities across identify enhanced the improvements systems continue it as that capture greater helping

turn has to performance long Again, as in forward This we costs improvements. costs. Self-Help these hard goals. execute and keeping resulted lower rail our sustainable Phase we against X as lower And storage well lasting, are updated freight in you look

XX the by our portfolio Slide XXXX our at remember, covers continue we expect divestment notes refinancing and to quarter. our the and core. Self-Help program balance outlook asset expenses, and impacted for sheet from of Antonio are capturing San the benefits interest the coming Please our

and a around. will our Shreveport Specialty quarter core business, fourth also fourth for quarter our historically be In demand weak turn the by quarter the is impacted

benefit from conditions with start as catalyst. yields new However, improved product and run quality after the completing we to the a turnaround, will reset we

X,XXX agreement that fourth from our in We chemicals and of margin business altogether rationalized further are finished rationalize add ending margin per day tolling lower And business. the our to up loose barrels quarter. low will third-party SKUs we

margins. quarter weaker quarter is business, a for In the fourth typically our fuels

expect the the while experience benefited seeing current rail prior a as tailwinds fourth from the to we diffs Additionally, widened takeaway WCS/WTI quarter same crude last differentials. favorable not we year's economics, back And do were year. to

project and setting We will improved throughput crude next our implement for small at this Shreveport debottlenecking up turnaround, year facility another utilization. during

prepare XXXX, And and fuels IMO at for finally, continue businesses. we to the impacts specialty our and

remarks, thank my his his as earnings we is acknowledge And focus which I West take a Before with company, played minute want West this leave, want I our close three instrumental call will growing journey main to contributions. the to prepared has as forward for prepares be our to turnaround I of West to Calumet. an the role next for to business. in phase the core years. past the West on pivot specialties last look

Keith Jennings and next Keith? and the X, now, like will to I say as to the a starting will asked take leg journey. few words. on Keith take over of to our him CFO company you January would introduce

Keith Jennings

Thank you, Tim.

be earnings investors coming clearly momentum gaining of as a to look to excited many possible the Calumet Calumet’s our Antonio of to Tim? over as is company. evident you specialty I as rationalization the the and I'm transformation part petroleum becoming and sales. team the growth and by meeting forward regional such premier forward contributing world's look products San refinancing, continued portfolio the company, the to months. as

Timothy Go

to would turn Andrew? to to for Q&A. the to I the up lines operator and that, call our like open With over analysts the

Operator

comes line your of mute. [Operator from first phone me be might Instructions] And on Read, with Roger Read your Fargo. Wells Pardon the Roger question

Sachs. line our with Mehta Okay, of the Neil from comes question Goldman next

Carly Davenport

this for for is my taking Neil, Good Carly morning, question. on thanks

profit margins. down specialties per barrel around was just Gross quarter-over-quarter. is one first The

delta. touch just or You I else driving mentioned of far was there that macro if here what a factors specific can you're was XQ? related anything in so also on And on you couple industry then time seeing that. curious

Timothy Go

margins Specialty you per $XX quarter of Carly, were year-over-year, think what I year. Yes, last were it, up margins third is you referencing second if But sequentially, which Tim. were this look at versus lower year. the this actually specialty quarter is barrel versus the of of

more seasonal Carly. I think a it's effect of

of are quarters. the generally year The [indiscernible] first are quarters two

support the continues special we're up. on to of getting so like strategy our feel positive margins SKUs, margin low margins And specialty and rationalizing that our

that quarter EBITDA the and this see year margin up quarter. both last that in ago quarter was percentage You'll versus

In about would been that about tell positive feel that that, has a the I quarter, for we headwind So margins our year all talked and business. we've Carly. how you base fourth the oil

that product fourth as a quarter, and season we the least last I we've you, in prices true far fourth weaker to get crude into margin tell this the quarter as but at drop holding, little year, seen will quarter, well. prices versus it's bit typically we've hold So expect more a and seen we

Carly Davenport

thanks. Great, towards to can CapEx. provide And the spend read on follow color. you around the be early just then there expect any much helpful then is XXXX Is and capital allocated Self-Help? up how you perhaps That's

West Griffin

going sale spend is will with range. you're our are Yes, going this year that’s next do $XX more relative on a spending money question. more of also great to sort here going in We're this as same the bit for Self-Help turnaround focused XXXX, the about a we're so that's million quite and honestly San have What to projects. bit growth be XXXX. on $XX the little we And wider] so a in to little to opportunities Antonio a of to [ph] [little going spend us with a million year amount same however see it to

Carly Davenport

it, guys, quarter. a Got good congrats thanks on

Operator

comes Wells Fargo. from question line Read next the Our with Roger of

Roger Read

some of prior missed the Anyway, question.

to I QX or volumes kind certainly were I preparing last the for on what on, it's of just specialty understand I means? Can specialty that more year-over-year, they're the do you in repeat flat this, on of essentially wanted end comment but a Slide But up there and introduced X, us so QX to products. I at far, a volumes are you've in that changes I and you two. specialty the bottlenecking exactly the understand the the So little mentioned done year obviously, you mix think times, over were it's Keith, clarity if apologize. while down give growth couple

that where would what margin it and about be? the how and cash you curious, to just was anticipate flow impacts I do come we growth should from impacts from toward think So

Timothy Go

Roger, couple of let first. volumes is Yes versus detailed Tim. this out the point sales things specialty On a production publish just me volumes We volumes.

while volume the had inventories. actually quarter quarter. talked or lower seeing all capital about a you're volumes We've reducing showing very working so specialty bit strong we And production you're third - little sales along

have been we we've as working to reduce sales able continue to stronger so And the capital.

showing thing publish second notice lubes rationalization volumes in say about would volumes in The I down about that particular, XXX and finished and barrels do a our talked business the we day. we you'll is, And finished that we've that intending lubes and have SKU happen rationalization we as in SKU would to production is to we're are margins. our drive exactly continue expected drive what program what higher

tell there turnaround barrels you The other was category our in last That would activity down we that year. I a specialty XXX reflection had day. a about thing other volumes is the is of the is,

margin to And volumes see the as we the products some in an not well. are of continue the was specialty of intermediates future. expect turnarounds, those would And lower those in outcome intermediate that business those

So those are intended.

see those quarter. the day. in starting that XXXX we was that And fourth then in thing in I'll volumes in a prepared some we're talked fourth year, mention this we steps, of had about had it third my I further the production you'll taking numbers. is the And remarks first rationalization quarter. And barrels arrangement in that lower are the quarter party about It's tolling ending last a those relationship

use specialties point our don't of the is business. a gauge production as here volumes So

a volume drive low basis, it but out business. margin it's a going We stronger growth and taken platform, a reset these to where on higher we've margin on a products grow to position continue will from be

about from? that growth about we appendix, pyramid talked it that the to about the our you of the going bottom when pyramid. the back of in Self-Help excellence excellence to asked again, of at lot growth Now, and come continue a operational show program excited operational that with the from standpoint. to I'm talk We've is where starts

I'm for say is margin CapEx Antonio we are is more next about capital a without that step, somewhat to projects, to our And West flex projects. million The million that's that high in and high year. with next But year, layer San lighter continuing capital $XX turnaround more, to that range. still $XX return pleased that's and program talked small,

million our that And be have facilities, are all that it's continue still we million Karns specialty drive this Shreveport, is so high at growth growth. going to and the that to to sites identified continue these more to $XX our in we're because projects $XX we're Princeton, reason projects going of implementing more specialty program part and to City, see return cost of of low range

as you're continue drive volumes And we're see to that in G&A down the in going in to growth what well. then see we from you're resegmenting our on see refocusing to we're going going be to going to new G&A as base, growth and growth And margins. you're by to - - going you're growth see

Roger Read

as as kind on kind these or was in of high in that capital returns period, next think Okay, or the pay be that, projects we real give us an to what projects, February, takes longer? year, return all impact on of you would a of up a anticipate follow maybe months about this idea or a cash invest payback and six back something your little high cash about - ended that

based And inventory. sold about from comment then my the up some other of having follow off question your things down

you've down is was probably volumes working volumes sale idea these versus networking Slide efforts put U.S., of XX that what million, capital we can inventory capitals the through? of was other or an us of an the you excess much how look of improvement for give in just $XXX at the of As contribution results

Timothy Go

On for you take Roger. capital year going over I'll after to targets the question it projects first West IRR. I'll returns turn of the project payback type Yes, are two roughly know then we're we're XX% working projects, targeting and Those the capital. or

make Of course, decisions. and they're looking individual we all But range target will we're that's West? the individual at.

West Griffin

with post-implementation we that's Roger ERP driven recovery million And some in you the respect to system. of networking by see $XXX capital, of had the part that that the there, our

our of some various things and inventories got we know, receivable of out you whack. As and accounts

had we've recovery of the with finalization that. So associated the

inventory the XXXX, And total you system. is a steady then past secular we've to our of shown business very, but changes. going decline the and of it run been in those balance in grass decline back really the you much is terms permanent in how are And needed the some inventories really our and nice a to all sort very of had in

you're I $XX we a our changes trade no yet go see there's with roughly in I going credit our in more credit associated basis, think million forward improvements what had will up think credit I it to think further or year. trade end finally ratings. And this on have with so

I double period out close you've see structural coming that changes tremendous some think changes. seen don't reduction of in we'll that are a over to the think here. that get going solid you're But I probably think amount amount, the inventories. to I time good of more

I been think bulk the achieved already that to-date. has of

ERP not may in all MRP be the go-forward cylinders, our improvements on the going elements availability see get on of in We some of slight a as to our but coming significant continued basis. terms it's we inventories promise of that

capital. million next working this showing of out So reduction don't year, this net slide $XXX a on come light count in

Operator

And from of Sean the with Guggenheim. next question our comes Sneeden line

now line is open. Your

Sean Sneeden

kind of that was? that kind transition you kind going about context talk the think little should reporting prior to kind move of segment what about to the market in of pricing. guess, the do think corporate transfer of do the bit kind base versus how pricing continue think as on period And maybe the in inner the a core business of as forward? a how Can towards about I based we more you specialty, of West, contrast that segments about of we we how for scheme cost

West Griffin

resegmentation the by of started from to on walk So we quarter really about sense you we're this year reported to sort kind things specialty the in the an what reporting side, give And period. slide basis. talking change sets of good this that the sort as a off the really equivalent last was of specialties comparing third

of and market allocation does new in longer forward it with the end a at So you're resegmentation, the transparency no overhead, are the there But that we up corporate you transfer if differences basically go based modeling pricing. greater with place same provide clarity. while on the the business have technical basis,

What is today, our need to had very to it the you're that the a continue SG&A we've on decline focus see significant over something us chunk of we've obviously over we going of couple years, and realized to if but last And already do you XXXX, or of of in $XXX that, would and million year-to-date G&A imply our this so million; year. total that annualize $XXX reported the XXXX, million; going segment million something around to $XXX sort G&A, a on time. based back results $XXX we SG&A

our you're going continued as to on forward. a see secular we focus So G&A decline there going

Sean Sneeden

on the be bit kind Antonio talk the are remaining buyer you that forma assets of me guess to we circle maybe kind reallocated overhead back questions financials a bit be sale. I drag but Let about a with a that going it the can showing the, that little the or additional of this of is of. and should facility assumes couple looks to like that portfolio? on in was any takes on associated facility, San offline, of thinking And pro all or corporate kind a EBITDA

Bruce Fleming

This is Bruce.

the Let an framework. question. excellent It's me help with

that couple in We have San have a changed of things Antonio.

pro of value about think or of rate to you run a forma EBITDA not the of is performance. want current even XX reflective month particular of service. or they're $X in facility And million what's if guide the probably would million $XX I the so you

or And lease, with $XX have it's on also million basically our a side our a we couple books had then And value cash in on terms a or it, at sheet leveraged adjustments. payment of we're receiving $XX books, capital was and balance of the of million. of then liability obligations present that

value of the enterprise the of sum think parts So run rate. against those the is

West Griffin

net would downtime And, income had is, impairment affects the year. We tell year Sean, what last an you Antonio had we San some last I some that in turnarounds. with

the work about year profitability months this this employees basis, I XX it. of the has $X.X million that rate the trailing million So you was that that Self-Help tell on to of at we've a the have Antonio. year would improve done all plant, of talked $XX run San the in the

than that probably believe $X And it Antonio driving. more so that range and is $XX the producing rate EBITDA is for that that. San facility million we run call We'll to million

gives of little on Antonio in San more the going color bit that So what's you a of kind business.

been drag other made; However, to Isom of over there you cash on there basis. couple project some the is about the that last the And It's before of we've of our from flow impact the implemented positive a to this be turnaround to and standpoint, has flow year. our going if talked us we've a some the projects a for at we've improve next and will scheduled us years profitability, cash improvements require additional capital. some look that turnaround

Turning do to getting transfer corporate think back you of and around, used lot to kind going pricing know of question be we're would is, tell models? at run our And I business? what that into I the resegmentation. to we look questions other the And resegmentation; on if rates new plugging segment, ought your be all you of a you are you how to think what do the

But you will we're and probably run of in that way corporate additional I as of the about working modeling some the think about, kind million, that's a on way the of $XXX think segment. kind West about terms we're still basis corporate you you ourselves tell the it. rate that talk the segment, through should And over of

year-to-date. we're million segment, we're fuel the probably thinking On $XXX at

in that includes LCM some LIFO. of Some

you So is fuels that to what be thinking way. be, what the $XXX about million it to we're is is business believe thinking we going of that million ought rate run about basically $XXX to

business, we hasn't specialty it as talked We've it business. talked always really $XXX In the million about changed. a about,

case. the about We continue believe implement kind more But is million we as million of rate business, to appropriate to run Self-Help the specialties basis. implement $XXX that's continue think that range to can the our in and $XXX to growth projects probably we we to these believe continue as it on a

about a I fuels, remarks, other prepared of Shreveport bit it's West to in you. component this Shreveport you important in So piece produces The information to hopefully comments his fuels that guys that's is little that that is segment. some think one of for made the understand, that fuel helpful

guys know, specialties. with you integrated is Shreveport fuels as Shreveport highly But

be what And you to think Shreveport to fuels so come to quarter, of want even we for that do reported overall component business? in you What fuels so And consider still million and that this have tell year-to-date, million fuels. $XX that's the I $X.X the million contributed deals up to the in the the And fuels move might with well, can in add core about total was component is Shreveport Shreveport third if about specialties year-to-date. resegmentation, the Shreveport you fuels about of the where business you fuels maybe business. $XX or how

So and that you of take about our it's with really that our got since as core business, component to business. think integrated highly part specialties

Timothy Go

Sean? that Did help,

Sean Sneeden

That's the segment the that are $XX delta look should for commentary doubt kind we're number kind in ago, previously in of to helpful avoiding at and just a the or on there, the that you move XX, I'm just interpret prior for G&A there. instance other just I was the appreciate the we to from kind missing million. that year $XXX million that bridge? all Slide burdened all, if try aspects of like guess I Is the but of there using

Bruce Fleming

G&A second. components the piece Yes, there's transfer the pricing two of market just there, corporate based is is it. The one Sean;

So seeing transfer only affects only effects and is market the what - pricing Shreveport. you're based it

what So, million what's some margins the a factors happening bridges from fuel the $XX.X two to into is, based, basis the move seeing the a to specialties from million. those cost segments the segment. And you're of by Shreveport $XXX.X moving market combined are

Sean Sneeden

just us comparison, of kind and the could so pricing? we And just sense base transfer like G&A up rough kind to of a for our you corporate is true what between models hopefully of historical breakdown the give that market

Bruce Fleming

offset XXX.X. market We of G&A if it's on you but by you combination out look you I see what And that fuels. at the transfer the the of moving a from Sean. specialties what can't Slide Shreveport tell X, the that pricing breakdown margin is, to XXX.X can specialties is break But removal of moving again, based to is,

So I you'll you about transfer market gap accordingly. models, G&A is help, at offset models, I as price as fuels plus help the the G&A price the with by base think you and on it to able bridges think your specialties help as play the it think tune And look then the on fine change, the fuels. around be your market

Operator

Jason comes line question Cowen. next of our And with the from Gabelman

Jason Gabelman

any just for one assets; just some and on provide if sales? you could of on ask could If timing market asset and non-core what in you're remaining remaining the I seeing the non-core wondering sales on I was color those thoughts M&A assets

side? I what's if then does just the detail this back throughput, can output to of project? you Shreveport, fuel just impact And bit that on or more add side the specialty crude could debottlenecking I the go guess and provide a on

the also related maintenance? lastly quarter throughput then the what fourth asset for And if provide impact on to Shreveport, could is - on you in the

Bruce Fleming

is this Bruce Jason, again.

a two been barrel limited That's It's The of restoration reverse XX,XXX more those. debottlenecking, So, addressed plant. I'll of try Shreveport points in small and the a day we order. a did of nameplate couple those projects. in It's we've capacity.

So, of in getting day front at two end. steps, capability X,XXX throughput the we're plus barrels a

got units importantly, These fall, the run to More quarter, key after we've outs, end a service change this run. couple of and fourth in years of catalyst come couple it's do of back stronger that going that. are

kind plant That's So, downtime, catalyst of zero focus. got been facility. our and in XXXX, a larger fresh we've

about facilities while our very don't along comes worth versus We've we're I keep think value portfolio The and than If we family I in go value of disciplined is question way. non-core, to is in our the core somebody think, patient holders holdings whom of more a really back once been, about accretive. keep that on and value. one to portfolio our

years to we've a enforcing opportunities the I find we're in couple over interested But one So the last think this had of right not few along. buyer.

and patience in to active back of the is value company a origins And company specialty creation. to the so the journey roots, the to products back

Timothy Go

Yes, talked right the look we've the opportunity. shareholders. if been always We've I We've years, buyer. for talked decision tell portfolio the how about the just always the about Jason, right at four our last talked would you you approaching about over always right we've

those fire you we've then the Prairie any Superior go four the to to We took It with us years found if at you're look go buyer some Anchor And in made assets. and sale so. time. Antonio. look a to not the were last you for then you Dakota We refinery rush natural at moves San over now do or

that all your decision assets we hold able needed be asked when portfolio our to our for make you're certain - the referencing think that had tell have in I And were compare against sure Great I made fuels to right the to a we of value question. valuable Falls We you those and shareholders. can refinery you,

And ability and to Great Falls generate of that is, we in value last a it our It portfolio. in fourth lots has cash quarter as the the has highly view flow. it significant our appreciate saw you in year, portfolio. asset of

have on higher a for portfolio in asset, comment M&A. that portfolio. thing And would good be value their community. someone involved, our the in to have was there buy that for would and the than a all they opportunity don't parties to an employees But We including if the

we them. view how kind So of that's

Jason Gabelman

I appreciate that.

X,XXX barrels - Great provide X,XXX the said Falls split of specialty sorry, from to products? barrels a a increase. the Just back between fuels the day that output Can it was you answer; going day you and throughput

Timothy Go

you projects, a of this year crude When to two that One fourth implemented quarter way, the seven. is it last going of the project. about year. that implemented fourth quarter the was in to total It's be debottleneck in in think one

most, going Jason. the impacting probably fuels that's to be So

run. VGO make plants We loops more can than our

Shreveport. result in we will to XXXX it coming, But excess IMO for sales. with VGO is that going be that profitable So believe

talked we're into go be we're available and conditions fresh and margins the the specialty run as excess to start going plant back debottleneck demand that Bruce when to extent plants, VGO that to specialty will addition, to have to In catalyst continue. our able to going about continue

Operator

Bank Gregg And Brody the line our from of with comes next of question America.

Gregg Brody

if, simplify you number like we I our in have think bit a But models just think to EBITDA? today about adjustments you third helped adjusted quarter there. that maybe us you if as quite without would with do have just it, reported the a before

West Griffin

have don't fuels quarter versus old specialties the third number a for No, based third quarter for the segmentation. upon we

Gregg Brody

looks you you And historical restate do is and like that? then the won't it didn't numbers the expectation

West Griffin

did restate we all for present. the numbers numbers No, previous

the the nine reported months then the XXXX we So then grand the and and specialties and quarter third the year-to-date quarter corporate breakout and for XXXX. in September segment XXXX total fuels and ending then XXXX,

there. all are those So

Timothy Go

Yes, the resegmented in basis. What Gregg, basis is slides would XXXX this so Tim. our on I release and quarter press compare the third in is, quarter a resegmented the new we tell on the you with XXXX third

on And easily press a to ago. year what quarter XXXX reported is and hasn't much, you back about changed see quarter consistent if on third we third quarter third for the with that can which apples-to-apples, specialties were that the see was changed can so The showing talking it Okay, much, we're you the the release things go XXXX what is year-to-date. of number specialty you hasn't side. the

and up that's Look that. you'll verify that what yourself, find. do I but can Gregg, you So think

Gregg Brody

I curious next could And add can think ballpark year? number to then seeing I'm could EBITDA XXXX. us you appreciate mentioned you that those how but you're what that that much a that, some from parts, business? you you add - IMO and think you benefit quantify moving Have for sort of Yes,

Timothy Go

are question Yes, comes a we've of around in of as get trying lot up that. a this it. do that I their arms know been calls, lot and Gregg, that to people not still to able

second And I is result of of the on the impact half discounting think as we be fuel see high here that XXXX. to sulfur to that encouraged to see would year. starting in we you expect the the a that were something market were IMO

be thinking. up. this impact. probably what go you able step The was part and XXXX show thesis are the what signs that would crack see starting of ULSD some we as IMO started is next second that to thing the expect us the to we good of people to - seeing what would So And that's to

And WCS a in crude here, of, see process to behind to widen. start diffs we result fourth the then thought waiting are And starting logic really, as widen we would if see WCS/WTI quarter the the it. the were to the or again,

think is our that starting This there both before specialties back we our the all pipeline an the we is IMO are, And those our widen even positive business leak, with going were again. see to to to starting of and impact XXXX. on be indicators diffs fuels out

fuels just product market. would specialty between to we're I point thing leverage XX% only ULSD/VGO mix, is that out the And and about our

Gregg Brody

use I moving somewhere once appreciate, it there's number that figure out. I'll of XX% a I lot parts.

the San what mentioned you XXXX? savings was a we expect Antonio terms of you much should Just or EBITDA lot refinery, that CapEx your there forward going - gave for maintenance capital numbers there in of is

Bruce Fleming

a capital year, watch. we our of turnaround get for if million $XX to including That year in avoidance that EBITDA. think $X $XX for zoom late you on would of we're is did I couple to run high CapEx, the next specific growth you mentioned, projects that have probably in imagining million rate a for us. more which Tim the XXXX growth out been like past CapEx million put kind But to strip to of good out level I a and you would because in the the guide

Gregg Brody

you We the three And West, the aboard. good And years you enjoy over Keith, Hope do I just last your you interaction before that welcome lastly, just appreciate predecessor. luck. guess and whatever with next.

Keith Jennings

you. Thank

Operator

now questions CEO, no back to over this you. turn further showing And the closing for call I'm remarks. time. at Thank I Go, will Tim

Timothy Go

for interest again and you Calumet. Thank your in your today time

remain We delivering flow, our sheet. plan. on performance, balance our driving executing focused and deleveraging cash improved are We in profitability solid

gaining transform look And quarter. you we to forward progress updating Our are and next our our efforts Thank you. to momentum. working business on

Operator

concludes call. conference disconnect. for participating and you Ladies now Thank today's and gentlemen, this you may

Calumet Specialty Products Partners (CLMT) 12 Nov 192019 Q3 Earnings call transcript