BKEP - Earnings call transcript Q4 2020 | Blueknight Energy Partners, L.P.

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Operator

Good morning. My name is Anastasia, and I will be your conference operator today. At this time I'd like to welcome everyone to the Blueknight Earnings Conference Call for the Fourth Quarter 2020. [Operator Instructions] I would now like to turn the call over to Chase Jacobson, Blueknight's Investor Relations Advisor and Managing Director with Vallum Advisors. Please go ahead.

Chase Jacobson

morning. good and you, Thank

results. Executive We overview and are where for Blueknight's call Chief will factors Woodward, you fourth the Officer you operational Financial performance, fourth priorities. to will discuss Then quarter welcome external and Chief Andy we XXXX. results the and to will financial XXXX update quarter on of business conference financial influencing full-year pleased an Officer strategic and the Lewis, provide operating Matt

addition, its detail beyond unique and In provide we and the to discuss After position market will and will for XXXX today, lines strategy. address management outlook the prepared growth in Blueknight's its any remarks open questions. our of more long-term in your

earnings of could be are to forward-looking from in will call and which and results. financial expectations Woodward. or are now the presentation, answers measures will future as non-GAAP includes management's to website CEO, to They over With the our analyze questions date uncertainties forward-looking no release this update Andy results found call refer Blueknight's the and of should during investor can under future. These include reconciliations disclosures and for management statements Comments statements predictions. management’s statements and risks that, to I that subject cause obligation that to financial updated actual As to a made you that on is help these expectations. differ turn it reminder the

Andrew Woodward

was into pure-play monumental our step well that today as who business accomplishments on the and transforming our be thanks terminalling excited with Good The a direction. in oil our throughout we as you company. to Blueknight of journey long-term sale for our everyone to vision of successful I’m report in. speak And for morning. a leading XXXX, as dialed crude infrastructure continue we’ll talking partnership

interface as with key well, how strategically, our taking utterly we and stakeholders. and additional We steps are customers

and XXXX. benefited three including challenging instance, line businesses a value. but million week, outlook in specifically was website new growth will launched better transform to are rebranded and for earlier we help in leading to you market provide storage oil post-closing a and three our the inventory logo, later based active we on the prices intentions via lead from our these results. strategy from and perspective, to collectively business journey our we and priorities some adjustments. marketing further approximately clarify various we at walk stands have to the quarter transform our additional reinforce backdrop call, and plans our to maximize I and crude markets successfully subject year, transaction sold infrastructure customary parts last cash consideration, businesses, Despite alternatives executed $XXX further a steps, discussing and vision believe will and oil end business for This intentionally Total rising this These on business For initially, reached XXXX with serve. including strategic Blueknight with a XXXX, our Blueknight is direction will first those on small market refreshed year us the how And through with Matt we of align meaningful of company. crude and In we our then buyers full-year still details that the will over time COVID-XX, we today, terminalling out strategic today's XXXX. updated strategic our ourselves On the a pipeline last fourth review then discuss we initiated where trucking we accomplishments this results. and we early filled to review. different began had views lay to into Cushing

and favorable proforma we unwavering to product U.S. more full we size. is asphalt The used has financial perspective future in of attention these transactions of expanding, want transition a our smooth margins, construction. store gas commend now with terminalling pleased businesses. the network from very my utilized due to we of sale, from and a operations businesses from the ensure business testament of into and those outcome our benefit a I business top uniquely currently. traditional relates believe away successfully we deliver historically repayment nearly more I on company, segments to employees oil nation, are these execute From the independent infrastructure. owners complexity our largest this we investment efforts many to markets. pure-play contributed are through and strategic less over on and transportation end these dedication extend And of a asphalt characteristics. business that involved these the our of infrastructure our the in XX% a with best-in-class and believe now is XX% our give as to this core priorities. attention their trends perspective, personally approximately our received With focus the focused all and operating of firmly executing transactions major complete these asphalt managing Closing from our We but our transaction transition. in highway four positioned as a at has our our transactions it to operating ability thanks and on Even reminder, in road terminalling and roadways arguably of a terminalling employees in is to importantly, supported

from of take-or-pay contracts visibility length and in counterparties is the distributions for this, there. contract grade with distribution XXXX all in on ability coverage providing For derived and six our from confident instance, future target meet investment building or Based on our times coverage earnings. weighted X.X remaining with we XX% greater predominantly to of the remain average business years of exceptional our

part throughout of a significantly strategy a a brought years of of record, leverage last provides approximately our disciplined best XXXX call, these to update touch Lower dry on more one the manner and this from leverage flexibility four on growth the structure few by with pursue challenging as improves year. liquidity a capital year. back quickly. Lastly, transaction being later and times. want around and transact COVID-XX opportunities I a times our a will come powder investment opportunities our growth I most price environment depressed in two increased from reducing our market to on despite financial very in commodity highlights in ended ratio to to up but us

to look and DCF shown serve owning to customers, have five plans further forward. of immense EBITDA and assets. a ESG progress to never team efforts highest employees while and over a the the best safely and enhance continue adjusted and going our building since we success annual for Blueknight forward also beat last Our mitigate our we to fewer run performance as XXXX, XXXX to We safety, necessary the this impacts while to efforts measures health in was years. off COVID-XX. had ever and precursor us our our skipped of Starting environmental allowed taking with reliably ESG

in terminalling in ability Our take to allowing XXXX asphalt crude deep on by the an year all us market improvement and advantage out-performance versus contango our of exceed oil, our to financial prior driven our market segment, the measures. guidance was

terms, new a a at and the year XXXX. out-performance seven communicated CFO announced XX our of for all also led a on in CEO We new new have refined level, successfully asphalt of to and at Blueknight, which transitioned favorable strategy management sites team our agreement

build this in momentum We and have every beyond. intention to on XXXX

Lewis, Chief financial those Financial performance. over Officer to turn Matt comments, Before our Matt? our to I first share it I'll discuss

Matthew Lewis

Andy. XX, fourth results we financial Thanks December ended full-year for XXXX. and Yesterday, reported quarter the

presented the with Since our operations. discussed crude As XXXX, discontinued operations. business oil not continuing did as are close full-year a include both and reminder and quarter these many today metrics until segments of transactions of the the fourth discontinued sale

investors We components. visibility tables the to have presentation certain both into ensure have earnings in our of modified release

discontinued gains the the $XX.X prior offsetting adjusted or XX% adjusted first which flow are value $X the that was terminalling sale. based does related be costs our the continuing the not of $X.X year. transaction will million information our and the to our and was identified fourth EBITDA an million, SEC Blueknight’s recognized year gain for regarding respectively. million any classified website. up any year. to $X.X crude results when or net on This million fourth for full oil this quarter operations case, as net is compared full XXXX $X.X or Please in was the will net EBITDA Adjusted difference million, million afternoon to our later million estimated prior and quarter to proceeds oil Adjusted this partnership's related Distributable reported Adjusted loss oil on between to were the continuing up year. and prior cash $XX.X of assets pipeline note, EBITDA XX% business. trucking was filed quarter included Excluded And sale report sale included associated Additional impairment $XX.X EBITDA the provided expect XXXX for approximate was with quarter under crude be was $X.X EBITDA agreements. Form in XXXX operations sale was $XX.X segments book fourth related available XXXX. on from crude million $XX.X $XX.X compared this million XXXX and quarter from when operations with loss we be up for transaction in prior of the of million Losses estimated held million, the the recognized fourth XX-K, operations. include up closes calculated related $XX million of annual to which and XXXX year year. to

prior performance, expense XX% cash lower In to approximately was addition the improved interest year. to business compared

reconciliation during Our coverage all continuing X.X operations Non-GAAP distributable income all times our our of year. quarterly to X.XX yesterday preferred labeled times ratio $X.X pro distributions, a on subtracting the note related common for been On ratio Measures. distributions. more prior EBITDA, in from are during discontinued forma to issued - to compared that operations, such adjusted net have would million was times. our ratio times release related units a approximately explained flow, the measures Financial the on Please earnings all coverage flow unit to was details After for including basis, distributable cash and X.XX coverage section in quarter X.X continuing cash distributions

segment the States. which on asphalt facilities terminalling we United As focus exclusively across will Blueknight’s XX performance, move includes continuing operations, to I located

$X.X stability and thresholds reach The certain XX cost long-term seven-year X% this which flow agreement This August generally revenue, with season stable from recovery primarily of Full and structure customers XXXX, operating a certain of operating escalators, to Blueknight. total XXXX. our as typically of of as variable was revenue a years. revenue. certain primarily cash XX% throughput contracts, of take-or-pay primarily consists fees recognize to for from costs, comprised reimbursable at delivers revenue. exclude up compared margin We of underpinned our XX that Ergon is volumes revenue that as our initial a X% pass based five throughput $XX.X we volume facilities our our fixed contract total of renewal on as seasonal was is utility facilities. fee business a each of XXXX fourth Please and during quarter including million terms approximately of of in total fee profile percent is XX% our Our we revenue revenue the as compared from have successful revenue executed certain year a total by as was contract at remaining revenue from if calculations. asphalt in to up represents driven due annual total third in sites. year makes and And throughput The up we income. resulted XX% of strong such through, throughput Variable therefore variable or new during revenue, by involving volume expenses, was This XXXX, well XXXX, following revenue, periods net note comes our known that take-or-pay ranging million fixed to XX throughput our contracts. higher which impact

during million operating full amortization terminalling excluding Asphalt fourth $XX.X $XX.X slightly depreciation This respectively. and above year was margin, was prior and comparisons. year and quarter million XXXX

the some be solid natural Our And revenue each third asphalt investors periods. and and the lowest business. and I year throughput the like into quarters operations there second provide to seasonality is first the visibility tend to fourth that to tend Historically, the in remind would earnings. future highest. be quarters

see X.X below and We flow greater. year quarter-to-quarter will ratio full times cash distributable variability or our or in likely coverage above our target of

be adjusted maintenance business we XX% capital will less unitholders. estimate over the approximately half our or crude to asphalt years. total of the between expansion represented I'd averaged in million average capital our million that As Fourth be comprised point were approximately to investing trailing return will activities of we will potential maximizing and liquidity of this our is expenditures in XXXX, $X forward, to plan spend, quarter out oil we recent on down range net $X.X also million. over maintenance on and that of opportunities, organic pay total after capital And and on Capital capital forma have our be expenditures our of allocation our mainly growth move $X.X invest to million which related capital a two summary definitely consistent discussing such, going our total And ratio included expenditures XXXX debt, based now utilize expenditures and and/or million our per flow a capital business. that our also pro returns. million years, last with XX-month to be $XX and annual prioritized of cash position. acquisitions, highlights last capital expect over year. annual I'll $X.X and for coverage $X.X two We to has future net liquidity to our million. This total basis. operating debt risk capital $X.X like

X.XX XXXX was projects X, in and year leverage debt, our reimburse to approximately with transactions. outstanding at the payment pipeline XXXX outstanding Blueknight’s our late Looking representing million approximately included This that following in was forma leverage initial end times at XXXX. $XXX closing pro X.XX was at their update our if times million the an of revolving X.XX for credit was million you crude two approximately debt Ergon of as ratio March compares And the $XX credit calculated borrowings end to portion of XXXX, XXXX. oil Provide cancelled a of times. times. under $XXX.X to our ratio you facility agreement made year

facility the As of significant part we credit in provides accretive oil still reduced an of opportunities. transaction, us executed XXXX. pursue this the agreement liquidity $XXX That amendment commitment January to crude the to and size to with our revolving credit growth million

on We facility. more XXXX With outlook. commentary go-forward look which grateful our for key group this existing to support provide our we And of back received the available to partnership, we that XXXX. us have and senior as our maturity Andy nature positions this believe preserve credit priority transaction from are the financial the during for continued well that, liquidity extend turn process. represents call lender we the I'll to We to enhancing a of strategy

Andrew Woodward

going about forward. Thanks, future. and in ample excited what which Matt. indicative are long capital we And with in business first fund growth liquidity time a structure both Blueknight’s conservatively for deliver this of solid our the team XXXX, over We're on a since to can time, the have a supporting stable achievement

a platform while I in As by is and adjusted infrastructure relationships, allocation focus our maximizing with our footprint, facilities briefly earlier, on disciplined capital returns. assets, leveraging maintaining experience our touched and strong to strategy operating owning of on goal risk unique build on terminalling customer existing a terminalling

three of pursue growth here, areas. to strategy the in following we plan terms from In our

organic We is existing asphalt and customers. growth. new believe capture outlook new The we're asphalt market is first the positive with and the to position or in for great expansion a

of operation terminalling asphalt construction and paving considered storage these actual Second midstream is growth of the are entities, owners. ownership for sites these assets owned number fragmented from a companies by The with contractors. remains believe refiners, acquisitions. We non-core material market or

leverage. capital in to is with reduce these the to strategy to assets to around flexibility, believe we trend continue financial are expect environment conducive this portfolio our also to on good act position a optimize companies We non-core raise their Similar and now current opportunities. to last many M&A year, as own more

in in many very our gets at number Third, products development today acreage water. that having for or an services are demand existing complimentary us future rail available most that the with and excited, area in sites. of regional A our and some sites in access to centers or attractive the country, of

this to leverage evaluate and plan complimentary sites is Our services. footprint other into these

firmly about for believe we uncover core these focus prospects very many our attention and growth will excited long-term. with Blueknight on opportunities and the operations, We growth are renewed over

back support Act asphalt XXXX throughout FAST funding in the in of medium XXXX. our of level at for remain to part and investments Turning XXXX. lingering improvement outlook began other ageing markets XXXX remained highway one-year what We Relief end legislative saw our And such This our a the and in we environment near-term in as with roadways highway place, of recent the $XX lettings put funding for and as or construction along dynamic extension to Coronavirus funding several pandemic, for the We driven response mechanisms billion and should comprehensive impact the Transportation Surface America's relief see much projects stable nation's from see of resilient. like at Fixing in part by current business, the the levels. of infrastructure macro-economic serve. the we more COVID-XX over the XXXX for long-term roadways relatively budget the road has uncertainty Despite state bill. a construction support and of Western bullish Act

in proposed XXXX federal by the driven funding XX seen levels not We years. even encouraged at are beyond more

sometime that will reached to versus five and the new prior year this optimistic years. XX% be higher bill are annual funding to XX% could lead the We

As adjusted be normal earlier. such, synergies Matt we discussed as quarter-to-quarter the continuing guidance for from our operations seasonality EBITDA first, excluding sale from as oil line with in follows; XXXX to is with XXXX expect crude

believe between target times maintain Matt distributions allocate Second, least to long-term on to how target to be And on total balanced appropriately these times distribution times. about million mentioned risk year profile last long-term we'll updated creation undergone of greater. X.X to maintenance committed a and expenditures with lastly, building expected return we $X.X sustainable leverage the a the coverage And coverage our a year value targets as in to the future. terminalling on We and forward plan $X.X Q&A. our asphalt are and X.X and the greater and capital based open leading for With our We’ve look remain at future Blueknight target markets. full on in summary, capital, be X.X are lead to already, or over success we or we to transportation million. all we of focused major transformation In prospects. market, that, Operator? line infrastructure that for business excited

Operator

first Please The [Blueknight]. Jeff go ahead. with Bailey question from Instructions] [Operator comes

Jeff Bailey

quarter, another over guys Andy, last great are you. you Matt, year. spoiling Thank your investors the

Andrew Woodward

Appreciate that, Jeff.

Jeff Bailey

will leverage above My go housekeeping question a of the just step first turns the in Blueknight as pay increment Matt, a Matt. is is LIBOR, there down down. kind that question for

lower So went we that less to spread costs, spread interest LIBOR? as times is before? we’re So a calculate that going be LIBOR say you using as Is over X from over than that X.X leverage. to

Matthew Lewis

correct, Jeff. That’s

correlate that of So that leverage our to our on ratio kind deliver based printed of works certificate, quarterly that way once grid. that then is compliance kind will pricing the we

pricing the based in drop do the the you us we we times. have quarter. when it think X.XX XX being that transaction, basis May But points for since get end deliver occurred about XQ if first at of at financials we’ll on benefit March, our lowest really on leverage about And So, in would grid.

to think us about portion all in undrawn or you So need the puts plus basis. added well the to But you as that all also then about that commitment X.X%. on have LIBOR fee to that think around that an does number have

Jeff Bailey

your curious And because the that’s more arguably pipes about reasoning the Yes you the much be okay, of leverage and argued X.X So made a a behind you’ve and portfolio out trucks of - other stable target the Could a it then kind and could leverage great. target? so targets that Cushing with leverage your conservative. I is leverage little now target, business? of more the X.X, the conservative was explain more

Matthew Lewis

of historically. with looking And conservatively And on Sure. think of argument we depending some future an This could generally about extending is long-term contracts. we at kept that for I you obviously things make we about, as tenure this time. the think us, consistent different the as consistent structure those customer you ratio on target leverage as contracts well well, we've had that a potentially think now, about think at that but

Andrew Woodward

this Jeff, Yes Andy. is

discipline one I Where is, we this we But sense we reinstate and standpoint also long-term. point are think looking company that a a we handle cycles that it - to makes I invest standpoint, I have to and to potential very of we lens, through to from go to build want conservative company that this to remarks. we’re that think in looking hit, through And a from we at any structure. that capital able is company company over important from think be forever lens to, flip. But here have not invest. a the in only we a it may flexibility where want the intend our at from prepared the

but balance So as think well. that’s in two, the manner. for leverage, a creates very long-term value we it sustainable coverage our position the when on our - And unitholders we the

Jeff Bailey

sheet. fortress Blueknight the balance Wonderful, we’ll call that

Andrew Woodward

like it. I

Jeff Bailey

common growth sub about How you? for X% direction, growth? yield the the flow, a thinking times in for So you that does trading that, Andy options Has are seven favorable finance around your cash evaluation financing equity today? up distributable of moves is, the open

Andrew Woodward

our, some, check we to give today, last financial - that our you decisions all those year. that this. us you unwavering That’s are We some per reason presentation note I principles update do capital that lay and the Jeff. And is framework our principles a us to did one think to question there comments encourage believe that and before to to presentation and like thing our out similar are investor I they for just truly out allow through principles. give good We

from A did so as of self-fund equity - standpoint, is capital lot MLPs of times, that this And was those a equity may a issuances business accessing past without the were at here public that all if markets, our out lot goal were the pursuing projects, of they the equity a have the project turned they discount not we to there always and way know a issuances. intended.

but been might've And it dilutive. long-term, rather was the there so near-term accretion, over

focused allocation capital we’re maximizing value strategy. our So, really through on

able leverage pursue times, so two at projects have we ample growth to to pursue that with be going we And the liquidity intend to forward.

Jeff Bailey

wonderful, okay, of then kind wonderful. two last And related. are questions Yes

And related for opportunity Matt. all that and if Greenfield your terminal projects is corporate that, the tax I to XX% be primarily dropdowns inorganic into cash because degree, to then Andy any would come back would or Thanks finance rate from gets the raised acquisition? be, Ergon strategy all, there to asphalt just of First got? picture, that's especially a

Andrew Woodward

questions, No, those are all Jeff. good

I about laid out just let look So really in me organic level we standpoint, just a appreciate We growth buckets the earlier. an standpoint. talk From that at three from high them. it

us. then, our over down for both sites. us asphalt organically organic we of acquisitions. from is see through in fairway the first It’s the it asphalt to allows And growth asphalt The is minds really pursuing and unlock a within our more within fairway. competencies in and portfolio time diversified that core synergies really is All

the one create see opportunities targets. over We and acquisition next And in is list both goal the beyond tandem them other. organic so see our don't we a hopper and of versus and year to

and complimentary And at mentioned leverage in what finding in a look us tandem. so growth us, return list, of And excited on as products area to we today these we And go that again, got to land. But to ways more into want we excites market. what of is then we're to on doing out look activity a have those own, risk get our sites access equally we’ll third rail. footprint on acquisitions are for which to we from lot that as based prioritize basis services figure - to organic excess access that [ph]. Matt other the asphalt is the current or that about about, a good to time, the of only They can. water. asphalt good well. per and to sites utilization that as acre sites have a we And see take a more at lot standpoint, much And drive to but going being that bit try as I little margin as to that's organic They after

question, your Jeff. hopefully answers that So

Jeff Bailey

corporate the mention increases. Yes, dropdowns tax rate Ergon, from if and then any you especially didn’t

might So be that the it take off table? I

Andrew Woodward

a see it's I off I standalone self-funded want our wouldn’t completely necessarily and from would I table. think we No, Blueknight, from say the Ergon’s perspective to say as that entity. perspective, business

right activities and some we from just I we certainly the road as generate growth I either begin necessarily that trading at the comfortable wouldn’t mentioned. And think began take that off levels side. I the with, down to the success table real we’re from

Jeff Bailey

Okay. - asphalt on just the instructive That’s was shows pro like assets are a I it's guys. business. the mean, and got. returns I of SEC Thanks tangible all terminals phenomenal Well forma the filed that with the XX%.

Andrew Woodward

Appreciate Jeff.

Matthew Lewis

Jeff. Thanks,

Operator

ahead. Neuhauser Please Mainwall Investment go Management. Charles comes question next from The with

Charles Neuhauser

and so. gift of a mouth or last year progress sound looking I the done commendable don’t previous that in a I’m made and job like a the want like to lot horse caller. over the you’ve I agree

downtrend However, is what do my what the you future? raising there the see see question I And that need in to to - or that distribution need for need to I years? need result to has do distribution is still see last your the been or see in we what a what to do several in

Andrew Woodward

Matt and Charles. question that I'll take Thanks, in. Andy, I'll is first let chime This

or going market improve is, Blueknight mean on past, is think and think lot distribution be a more are by a rather forward, business in upon rest not and MLP decisions, what I - is and the driven to strategy. And the oftentimes create actual first of the what that of long-term, past. approach the do strategy with strategy, Matt I, lessons business of that of good but by here, companies of but mainly strategy speaking I I'm drastically drive the the team not corporate here to driven some is a what I for and corporate and necessarily real foremost, be a with trying management our saw strategy. rates And corporate taking Blueknight distribution by And you that. growth

allow first think that last think think to to that achieved in And to to first we think to about that and down we a And that allocating us similar are been that's I year. so I allocating communicating standpoint. get to be already. goes we've had risk leverage about And also think, what how back capital we we standpoint, capital, levels and then from second The foremost. priorities, successful growth

checked box. we've And that so,

firepower to those of adjusted there, know, investors we're cash can at on to a are and standpoint liquidity basis. our set projects more growth from those limited return we not be up structure we're as projects and lead in I then have successful where sure if And acquisitions highest opportunities that and Because flow going way a returned capital want the think then distributions. to anyway. be - the to return make in a that able in that pursue risk looking form be, be the all we and we second, risk opportunities, would return to growth to

would return capital to we looking form again, be And we think to so, going I looking would of then the think, And be to capital, cost our that the to preferred of that would is forward, cash form the way retain at more preferred, either at then And distributions. investors. returning back to moment. us opportunistically the through our the right allow - at third capital, highest about is investors now of which able

it's is we're distribution an want supportive any in strive but is cash all have something looking that ensuring increase underlying profile priority, flow And there the to future. so very And at distributions are time. our the that we what last we of

Charles Neuhauser

you what meant? it, that the some when about retiring preferred, Okay, talking you’re back is buying you talk about

Matthew Lewis

organic with that steps initially. right of us right our it And thereafter, the then and I a around maturity that a think Andy’s opportunistically In use look potential repurchase we credit taking if what units, strong that number that we to didn't extending done in But think facility. as discussed that have position the capital puts of from the in XX%. we potentially would the with projects about preferred enhancing yielding of better debt because we're taking kind its any acquisitions. would repay we've to the transaction be correct of No, - is for mind, of now proceeds or

Operator

comes Chick go from Yucaipa. ahead. with next question Please The Steve

Stephen Chick

in what the more crossed numbers and kicks talk of is run starting would corporate $X right? first it you're little the model is a Yes at a that is, of congratulations, midpoint. we lumpier and items as of out it on bit close just to bit out Can a expect reason guys. it timing I the come million we you on something for terms what have kind kind $X.X achieving range the the deal generally I where why the there must over that see of might questions in rate, or in of time the little that sort the cost help? synergies, can - Can you costs, about $X.X a line million. at few million are, I call expecting the off guess,

Matthew Lewis

run And think as That's that kind of about targets. Steve. rate question, we a great

the And our during XXXX capture to ability dependent effective. become on, so they that calendar will be would when

organization so when it, had lion forma the tend were in the half, that we of structure. crude would the pro we that to And not I overhead the related when organization say that individuals oil to of that part part of kind of corporate be about reductions, over amount, of business type would would share a be think

And transactions. dependent, through be on for so of transition services, when that some these will on get we example,

little So does it a bit. vary

to, some or choose type that that that there services we third-party had move type memberships kind with corporate you when we Thereafter, that we forward terminate business closing about, those and with. certain think upon third-parties can services, were can, was, of whether are that working of types

closes. and when business trust transaction to Andy, be if but a to wise, areas. or improve that would actually know that all So, we're don't corporately necessarily, in specific it more to stretch is I think - little is just I culture the kind bit the I'd remainder But then of try looking call additional the growth

more are a go our we've is And us of team that leadership across get in a the matter board. got so, driving mind maybe that

Stephen Chick

your XXXX, way, by terms should it, even of we of And when something of pushes So, should been given you size out seem you've costs it of so by second Is with actually if achieve into reaccelerate costs it the in because the you're place, to or of consider, XXXX, thought here some run if sold that if well? wondering type in obviously, I'm out conservative I'm sense? like kind process makes achieving the, growth. half the that intentionally focus synergy? of is forward something as sorry the that's you does that then in rate? second, wondering potentially it kind off, is leaving the what And from I'm going like,

Andrew Woodward

this is Steve, Yes Andy.

is perspective, think end modeling in we're is about low your we're to then it the that recognize for to aiming a to the about range? it. full the way from - way range where first there, I the to expecting maybe of able And I think think XXXX, question, would for XXXX be -

we point at able were, to pro growth our think wanted from looking standpoint. I to start org company, at when available analysis, We yes, be to resources a going to in we forma through an looking the way. meaningful your the second ensure had that

our absolutely, going of things forward. that we of part approach how was at so looked and our And part

Stephen Chick

sense that it’s helpful. makes Okay, all right,

clarify but you on can of seven-year just in year-over-year course, eight of economic in you favorable To basis? I terms, benefit Second, results, better September it the and of more will take the the of that does agreement of or when that some subject kind contract was some - months economic terms? commenced the at benefit it of that Newcastle first think XXXX. still seasonality a contract XXXX, on to

Matthew Lewis

That's correct, Steve. We started realizing those benefits immediately.

me that benefits. fourth So benefits we'll see absolutely it’s itself. throughout from on We're those quarter third the to the quarter starting those within the quarter excuse realize within XXXX, clean Yes, contract - a asphalt really side. or

Stephen Chick

Okay, As aggressive at and of of through generally opportunities the the some opportunities to And sizable and acquisition and for I asphalt, can million? sale great, on then as recall, talk acquisitions at great. you or your And that to a relative could business? you that's about asphalt, or hold million more I'm think here. M&A landscape a these be look of like acquisitions as opportunities - asphalt wondering, the thinking talk could a, while size the kind say more know give kind Andy, doubles? little that you of within growth And the the is independent partner, a you to bit your - singles core general about you within move of to sold some about I kind I'm XXXX of like stand? that EBITDA pretty looking take facilities $X we are business call take you Can $XX of

Andrew Woodward

question, Good Steve.

there. there the singles that think are, a of it would capital market, about lot that is, said, certainly take love finding to we a do that need of way more fairly priority it's those And dialogues what the on to are we out standpoint. on types a these the of fragmented portfolio - we're looking other list what right going them, can more non-core moment. growth them and - time. I and having now find. potential we of And market. being sites, And as of think companies side. of is how many own across from their we there's things this at a of the And But willing point, out it's, like and we're part we our side. doubles, asphalt the board said seller potential optimization types about strategies transactions I With we lot excited would as our own larger there's - similar assess mean, And earlier at them through consider I just anything, of have is, transactions I'm again, those in less eyesight both, a you the on I within space, transactions can think it's

right types environment that's of these think the for we So, just creates it conducive dialogues. and discussions

Stephen Chick

specifically your Is pencil of last sneak growth kind one up And profit Andy here, type helpful. while one on kind early, leverage a you similar a in about capital grow of I the core per could then economics? asphalt attractive on from I but capital as infrastructure, terminal if give it that avenues, profit or you it those existing It's pretty and now of, know what's it, ideally, when be Is less economics it, standpoint? And and what, want renewable areas? $XXX,XXX business? the talk be you a your to kind one because these let's for you of complimentary to out, to could be actually have intensive business in say could like beating, what side, take say, facilities could then capital diesel, could sounds

Andrew Woodward

question. both are those now, Yes - good

place. infrastructure think times like an then our there which what leverage footprint, existing one, I that opportunity I is, in many because to the like area turn, have - us services, is, said excites you in us before complimentary we about on is the said, gives

existing in return, we have do We us and in identify better sites. our to Then returns land for overall opportunity leads on economics if project a the place. or growth

we excited the our asphalt on we’re about renewable same or services us very these is, when with that reason it very oftentimes we the excited gets get And think projects, is way that side. about so, dealing customers. or And then of existing complimentary like renewable with about. And diesel customers overlaps other type areas it one two, the are us

then provide standpoint new that from services the as that box them allow to checks to it us expand own it’s offer. business solution certainly begin their and so, And they they that a and to

around the the biodiesel is renewables, in like lot a feedstock or said of required place, infrastructure requires infrastructure, I side the second but tankage. The is heated

in that And we side, have heated today, place, the with similarly, so on infrastructure asphalt asphalt our tankage. requires business

for So be again, asphalt, with that within it going getting it at fits feels which area, finally, our specialty us forward. products, type we our - and new then is of minds into the fits these that business probably of as in to service and well types niche or want size

we high is, the is what I return we’re to side. products ultimately what that and for and pursuing. are very renewable And good what mean a where of one so, example. just risk we’re long-term quality a associated commodity not And that taking different business. looking these again, contracts that's we’re start customers, asphalt lot with the profile return boxes. similar the with what the risk commercial looking risk and doing by profile new types think or of we’re standpoint, I on is markets through a checks evaluating diesel, But characteristic to want But And of a diesel criteria from renewable

our We’re just service. providing

And our risk be be is going very should or minds, so, profile to we’re what the return doing side. on similar the in already asphalt

Operator

with Geffen from ELCO Management. go comes question Ronald Please ahead. next The

Ronald Geffen

you a Can Dutch something in there I on plan be on elaborate done be Would retiring little the in call think bit that is looking to how retire feature? market, be a is convertible auction, don’t a that? this preferred, some? or more just the you would

Matthew Lewis

the look take the one, under security all to of There’s options or of that auction a out. lot consideration. depends at we open market, that could percentage you’re are be partial looking of tenders different that those Dutch on number could But a

about when organic I any projects just capital, we of would go a to back our think acquisitions. and or think again, if the down that from don’t number have paths. look for better continue we we We perspective, those use to,

Andrew Woodward

Andy. this Ronald, is

preferred, I I now. saying buying back some looking opportunistically actually been time at we’ve it’s it’s say, been that question. the think will for good something a

within preferred priorities box always long-term checked back getting leverage finally think I that our of is X.X here our has the we’ve difference the within times. priorities. target of been side, certainly on buying our only But below the the leverage

basis. of As adjusted Matt projects pursuing projects or in lieu a it's on growth not risk return us said, high

Ronald Geffen

if coupon [unamortized] XX% right? an Okay,

Andrew Woodward

XX. Yes, around right

based are think on where I trading today. the units

Operator

[Operator Instructions] from Investor. Private The go a Murray, Mike ahead. next question comes Please

Mike Murray

as an now? help the staying MLP being MLP don't I of and were just like Yes, think pursuing corporation receiving advantage being a as strategy C-corp will know, lot all a I you you is you way since - forever? distributions growing of you don't growth versus all - us as versus that certainly there you're really or down? the continuing strategy, said is as regular And if a your company K-Xs. investors a growth distribution how a that what see said list now What long-term on does help, or

Andrew Woodward

I I And start that are that Mike. where the rate at potentially will tax more at to companies now, looking question, that IPOing appreciate look may structures today, right - than recognize MLPs. is tax think I C-corps federal

of from expected a an off And from tax now. the for see lot there's rates think certainly argument XXXX I this we I in when different. And back us, chosen vehicle So were a for that we think But still just administration. sponsor. benefits a courses MLP our of what's like us being new along based administration we don't to with change future or even

we've itself the But a business what as from in I similar corporate is also be benefits only to for standpoint. pursuing feel of perspective. we for mean feel is into business at our at won't I the mean will - like and our potentially choosing structure, to we that to tax regardless any in we MLP structure sponsor. do structure cost going by going forward. of that But look and what from is as that regardless with - what much go we're of if what before. But a - And not I that to it's down we choose business it’s vehicle by the direction, detail we a the but - - chosen very that us From we've we real certainly Blueknight and we think benefits way. is strategy from And structure, supporting that so, our something road, reaped limiting today, drive plan the us, other distribution, structures. there we're corporate have strategy I - look is, And

Mike Murray

to Well, the And I'm model or to was gone where said and model MLPs, straight was from, but your now the tax if you just I shift standard your really a to not to was that have dividends distributions I you've is company. long-term just increase mean, know that a try curiosity a but you just sure the what I advantage growth the - mechanics going could whole - not, are, it the corporation company? you've guess, a changed benefits question. don't where like

MLP So I'll an your take for word it's to as take that better it you right - all now. stay

Andrew Woodward

that, We appreciate Mike.

Operator

concludes This remarks. to the like to conference for closing question-and-answer over Andy Woodward, the session. any I CEO, would turn the back

Andrew Woodward

I in again participating call. just want today's - to everyone for thanks

this was had I I times. time call. We've good think this think, more the a interest call, than in other

investors excited sounds I and our come comments. equally so, like as with honestly are the we across hopefully are as it say And that's that can

few feel our of and with as the quarters conferences. support always, please the interest over several Thanks in your forward to to appreciate of Blueknight. any free further investor to out in reach we look next at And So many meantime, again. speaking And you questions. one

Operator

concludes call. today's conference This

you have participating pleasant Thank You disconnect may and a day. for lines. your

Blueknight Energy Partners (BKEP) 10 Mar 212020 Q4 Earnings call transcript