UAN - Earnings call transcript Q4 2017

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

Operator

Greetings. And welcome to the CVR Partners LP Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation [Operator Instructions].

As a reminder, this conference is being recorded. pleasure your my Mr. now is to host, introduce It of Jay President Finks, Vice Finance. may you, begin. Thank you

Jay Finks

is Michelle. as morning Dave you me you, Officer Prior call. may Chairman; Thank to Good call Pytosh, that and With that in your Mark Securities forward-looking Laws. defined recent Chief contain me this today’s Susan participation discussing Ball, under conference today Financial Chief our Federal remind are our Lamp, term our Executive everyone. our statements Executive We Officer. appreciate let results,

to For that foregoing, this be historical be this believes, expressions purpose, any identify the statements intended expects, to words the made facts forward-looking are during call plans, statements. forward-looking deemed limiting similar anticipates, of not Without outlook, statements. statements and may are

be important and statements set Securities You’re factors in with release. these Commission and our Exchange cautioned earnings that affected latest by filings the our may in forth

open we results also Executive non-GAAP that to Pytosh, our the filed are the no the operations comparable information, market. from GAAP with to included by may the Mark disclosures SEC measures, financial of This including future of call actual materially result, related new publicly to release non-GAAP I’ll the turn the to morning, events as Officer. obligation statements. measures, measures. a forward-looking quarter With fourth in such reconciliation statements, financial most a Chief to prior earnings update over any directly that our said, result this call otherwise, extent Mark? XXXX to or required As various the whether differ law. except forward-looking in includes We or The discussed results undertake

Mark Pytosh

for for morning Jay. you, call. everyone, Good Thank joining thanks us and today’s

adjusted for highlights million of $XX of million, a EBITDA summarized included Our $XXX $XX the net XXXX million. loss sales and year of net full financial

loss of East downtime XXXX impacted XX $XX of results quarter million $XX of net were at million, of facility. fourth reported million. we by specifically at $X.X unscheduled more and Dubuque adjusted EBITDA the Fourth a Looking quarter, approximately net sales days

a also at plant operated approximately at fourth few UAN the the the The rates ammonia XXX%, UAN XX%. were quarter gasfire ran and Coffeyville. at had total on impact the We ran at approximately The maintenance on EBITDA on-stream was Coffeyville, $X negative days million. at XXX% plant unit

XX% While operated UAN at at East the ran and Dubuque units unit ammonia XX%. the

to led or the into our produced converted produced combined For fourth quarter, of the approximately available to for ammonia sale We This tons tons XXX,XXX $XXX XXXX gate operations majority of other approximately $XXX tons We the ammonia tons the ammonia. of approximately XX,XXX fourth XXX,XXX XXX,XXX UAN. of of ton the per in the upgrade total product fourth quarter. ton price sold the niche of products. UAN nitrogen versus XXXX during per combined quarter and approximately to

ton from XX% ammonia up quarter. conditions difficult with weather ammonia, ton For to where application due price XXXX The during upper XXXX $XXX the poor to fourth XX,XXX per application quarter compared per sold was $XXX that's the in strong product a we our combined a gate fall tons of total XXXX XXXX very to in fourth Midwest. approximately at the volumes was the of in

Susan? the inventory As detailed at and in discuss remarks, will a discuss market I levels the conditions for and environment balance. pricing downtown will in the before XXXX nitrogen the In for a a of remainder the the Susan facility, year. quarter. position fall results. my good Dubuque financial not to But pay are the and we closing outlook strong our distribution of application, industry challenging spring the fourth enter that, with East result to application were we fertilizer lower Due

Susan Ball

everyone. morning good and Mark, you, Thank

quarter, lower were period at ammonia and specifically million fourth and lower was Looking the to sales the of as fourth attributable prior UAN UAN the as $XX XXXX offset cost associated This sales to slight Selling, million the expenses, million the sales XXXX $X.X year a excluding volumes, $XX compared million, increase and for general $X.X overall for year expenses prices partially were XXXX. other $XX decrease prior with materials period. Net as by the XXXX quarter to XXXX quarter Direct XXXX higher in for in primarily increased was million inventory year to the amortization in the flat and fourth compared primarily quarter. the quarter sold remained to period. fourth $XX being million of higher The depreciation $XX tons expensed $XX from million sales of prior fourth operating compared the for decrease volumes. same fourth million was ammonia which due administrative ammonia Cost for the quarter. in to increased period. the and

million quarter. the quarter in $XX.X fourth common $X.XX XXXX for or a loss unit is fourth or net Finally, a $XX.X reported compared This we per of per the loss unit common of to XXXX. million net $X.XX

our Now spending. capital turning to

two XXXX we million is capital our spending for capital million. quarter to spent capital expected second including full million our is expected for of $X XX the CapEx of and In projects, combined to XXXX, fourth A for quarter, million. is maintenance brings XXXX, capital expect $X spend facilities. This approximately days to maintenance spend During growth our we year $X.X turnaround facility $XX Coffeyville on projects. at the our the to last approximately plant which remainder be which million cost for $XX.X $XX full and planned million, at total

cash had the debt. of sheet total we and approximately million $XX $XXX as of million and approximately equivalents December at XX, of balance cash Looking

I’ll to brief Finally, on site, the our Web selective call find back financial certain over a turn will you that, presentation Mark. information. With on

Mark Pytosh

summer earnings one, customer of begun participants be and nitrogen about several We as demand significant conditions spring higher were steady also lower the global crop in this our since next for natural the cost driven winner likely inventory changes U.S. approximately XXXX. by is long-term and of expected freight Latin XX normal have of the slated October, constrained facilities market We customers It increase capacity urea of in global gas think to appears be experienced corn efficient the to planted for are industry. the recovery end And U.S. prepare expected million And remained week from most at the have driven Indiana the coal in fertilizer geographies. additions the Susan. imports much cost largely production we’ve minimal attended the with discussed us to optimistic global There and solid levels urea in pricing season. led or various of years, recently Conference by TFI be the a the conditions this call by for cautiously America on On subtle appears time to are last domestic the were product production customers in has and problems Urea trade remained acres U.S. natural smaller for spring. Thanks, spring November at to and with prices last are end the we seen the facilities gas last that China very significantly prices; year year; at levels urea and rates. low and production because; the pricing as availability prices below curve again. cost new to certain exports market, XXXX. capacity that flow of proximately the

our will remain business believe plan and our we our high are being cost, the capital for marketing plan focused prudently with improving, managing conditions and logistics while rates, activities. judicious However, our operating on maximizing on-stream

approach the fully in for hold. take until business positioned We remain our managing the takes well logistics with but that, to marketing With are questions. ready Operator? and recovery production, we’re cash to conservative our

Operator

Thank you.

[Operator We Instructions]. a be will conducting now session question-and-answer

Adam Goldman with first comes Sachs. from Samuelson proceed of Our the Please with line question. your question

Adam Samuelson

I ’XX? sales it a spring expanding about back that year? as done you a decline comments that’s sequentially plant the to was because last just in summer surprised But some fill. order little summer for first see for talk mix I much the you’ve was is of the I mid-last the fourth strongly guess from second UAN forward already fill those Mark was tons the I’m of you guessing from first today guess quarter. of actually how half half little net and bit Can left talk specifically, maybe you’ve benchmark seeing pricing it in between on and a the book, about about the to pretty where made. is and that priced of that how move industry to much

Mark Pytosh

take there, in so there at this I four a I'll them to one are time. try questions

At quarter, things out third UAN to East saw, the quarter quarter-on-quarter. about Dubuque, the pricing sale typically we of because UAN selling relative the the fall mostly that the In one I mover in think largely the application, for is the so talk we're UAN East let's price fourth Dubuque. and and a Coffeyville. of the you ammonia of

the Southern more in price East the that’s was quarter, it so Plains lower the So reflective of pricing. Dubuque fourth than

that's was good why we off sold summer, running And we the quarter. that mix in fill so was back on and fourth a to if more you So book recall what pretty Coffeyville, the of the put price weighted we the were lower. in

beginning the the we’ve into this of rolled consistent since year. demand seen we As year, pretty

fact, we've back quarter selling to we firm. book orders for pretty going coming first been a got pricing In and spring through demand good to had in had but we’ve the December, has the consistent we've continued and on

more and put So at coming back. on people are this to we're second trying volume quarter point,

we've And Kansas expect few of product, the do past days in will for this in triggers One and for lead coming everyone had that. moisture is Oklahoma, help waiting run. which been customers has we the

in that So of of couple that the kind like run here next momentum looks pickup weeks. we

is see level and the that's since of week. facilitates UAN in the we're orders Southern we'll spring. But back been spring And of ammonia some for in in. both TFI, product So pricing just since pricing coming last move it's 'XX to increases And higher than since been has more Plains. there more

This at dynamic so And it's into the pricing is confirming. going already when to to like and in end the looks rise fall. different was pricing 'XX. we versus so to very year it spring year got last fall, starting the XXXX the February, In of spring

Adam Samuelson

maybe the then that to mean visibility am some above right? net first just you the expectation would I indicate at point. where this prior And have least average seem at half be year, your that comfortably point, that you last would reading on That I backs for

Mark Pytosh

first above year will I half. the think it be in last

conditions know, at year in lot the urea second I just -- last pricing tell actually it and is today balanced what you macro stands lot year But by foot that a I look that last sense played the just order like. So sense June-July are before you you would if that And perspective of And look our to the through first for got re-exported the be up year that half. second in versus just out to much year. pricing a the stayed a last a and spring. a we where year variables market half this showed more half going of market lot mean a get as in of book from last to

a say more comfortable overall where last versus volatile are this the year I'd inventory had much this levels spring. things year. really we year And and So the

Adam Samuelson

in to choosing back Do the second And quarter? volume your highest third just net Coffeyville that then your be at traditionally do second actually sales year impacting quarter see year it quarter. quarter, versus the in around which you this prior turning

Mark Pytosh

opportunity increase What It -- to some out on will. coming rate the we there we’ve the turnaround. is think

that we’ll we So we to time in back. call in low some period was activity thought the a trying pick think level. of that We

and is a a there there then apply big is push usually to that. coming behind and a low So there then side big is dress top dress push

we’ve to it'll last from years and be we -- year, from So trying time last X.X so all we’re do one. turnaround push that to

the looking to there. able call been to that have volume we some rate would sell of the think back increased be that So we we’ll

So right we to do a think it. it’s time

Adam Samuelson

environment that And into foresee on bit you me, that us then what there with be the a level is regardless. also in pricing it sense, before little this would Do makes EBITDA last and cash but one burn to should distribution help point… of understand decision took cash distribution quarter, from you that burn consider the better given to

Mark Pytosh

it’s back, to a we call going much When at to lot we that with that where go Board that down I a cash. we distributing that always time and we’re sit in want go the do back point the back will we conditions in discussion want a be If depend think of didn’t burn at to of we’re moment. on time,

a get what And to not talking are we discussion a rearview so will clear going sure mirror. time the the when be it’s But look how again, it’s that Board strong. will and if I’m spend we at of more much it’s conditions be it about there. probably lot that. not, time And we’ll it’s in if

Operator

Instructions]. [Operator you Thank

Our question of next of proceed from with Please comes question. Richard Jefferies. the your line Kus

Richard Kus

think better? on averaging up get on bit just to up So think can basis a you of the question on year-over-year just UAN Or follow little first up the the pricing for for you first a as there or you ends half QX? me half out effectively in XXXX. just first a even do Do back

Mark Pytosh

that to I would to the year half. probably due pretty last we’re be first say above going steadily

Richard Kus

I UAN and if should from flat on, all up, then QX, you side, did your at in of in relatively up. probably I’m gotten ammonia to like a you versus should pricing it have look alumina your ammonia bunch QX. what’s just it performance because the and was was did back you your on out QX me And figure cost the to cost volumes were that there trying -- maintenance looks have going

else your on was sequential to what improvement EBITDA basis? guess you I So impacting limit a

Mark Pytosh

-- there it downtime, you on business, Well, of turnaround was we late the for called had turnaround turnaround a Dubuque. cost about guess East unscheduled bunch I of the the in and our

heavy, were plant to there. cost cost the and had maintenance the So the we’re issues runs we having fix

have like another almost from was you it days-down So a as perspective at turnaround. Dubuque if East

So were quarter. expenses the for be to fourth going higher the

Richard Kus

mid-teens anything And posting on have else of going you would EBITDA? that from there wasn’t kept

Mark Pytosh

with -- we I the was been pricing quarter think No, pricing adjusted as versus downtime down, for the But obviously there. a side. on costs that where us would The it in right about was brought have down us line is which third, year. last the that expense

Operator

you. Thank

question Maine Glen] with question. Our with next Ltd] Please from and [Alan proceed your [Concord (ph). comes

Unidentified Analyst

give for us the you debt have? that you covenants Can

Mark Pytosh

any have covenants, We don't maintenance we don't so covenants. incurrence

no is our maintenance on debt So there covenants structure.

Operator

Thank you.

question your Raeke next with Alcentra. Our Please from with comes proceed questions. Tim

Tim Raeke

downtime. more want I for Dubuque you color what maybe was just -- thought it a I $X at And the just did that… just follow to sure, million, give was up happen on can on East little make the unexpected was

Mark Pytosh

plant to most in There the bit repair but leak. was to whole have us water a have -- had boiler have two repair little of there, with downtime we feed and reformer, plant, bit we're we to a it was feed boiler tubes and -- and and East we And And unit water UAN that you cost of frontend to to trouble some of down the take Dubuque. do plant the that. little having

took it the repairs. XX down the days took plant we about complete So to

Tim Raeke

right nothing up the is whatever restart mean, happened… running, -- I got and there that it back render and And

Mark Pytosh

long We some we issue first But had and a the quarter there East our we're in last expectations we good to run the had years up until pass we two We the have acquired ago. good long addressed we now. here. had been had think that think issues turnaround because running are run the well there. has we've plant it And year since Dubuque that we at from

Tim Raeke

it's my the That sound related this the to run issues, prior was doesn’t was, I for context question anything… had but think like

Mark Pytosh

that that. there. felt we our weigh dealt with something like the had And and addressed are on we sales can’t I we've issues No. that those dollar we

to a long going is intention on we're good plant. the getting out to very our focused be run So on --

Tim Raeke

up And then just a CapEx follow on the front.

and So $X you’re that's what is in and between turnaround cost you million delta where at for that had I saying think CapEx the Coffeyville will 'XX 'XX?

Mark Pytosh

CapEx little in a light turnaround and year. in Susan million going we're maintenance $X of we that heavier last little expense. a But we've we to were typically things have and turnaround referred a got CapEx the year a our do, The to couple was

little projects at very So bit working it's this a we're the that of couple on year we've some growth small and got business. higher

why a year, very small of growth our little it’s partly maintenance this it's some and higher So partly that's then initiatives.

Tim Raeke

million is and for the the the on lost $X delta cost EBITDA So in QX? XX then CapEx is turnaround in opportunity you’d on the that the of the kind have

Susan Ball

correct $X is That's actual… million the

Mark Pytosh

think my was, production. run issues, lost related for [Multiple context had was anything… I to speakers] prior That but like doesn’t question in the this sound the it's the

Mark Pytosh

that And issues on we that. that weigh sales addressed something we like our dollar and those there. we've felt the dealt can’t I had No. with we are

our is So run on to getting -- very long going intention a be we're good plant. on to the focused out

Tim Raeke

a CapEx front. then up follow And the on just

that think had where what the in I will that's million and at cost $X you you’re So Coffeyville turnaround is saying 'XX for and 'XX? delta CapEx between

Mark Pytosh

The million a and referred typically last and of that year have turnaround a do, our little got heavier light CapEx Susan to CapEx things But a year. in turnaround were to a we've we going we in little expense. was $X the couple maintenance we're

growth couple a higher little the it's very projects that on we've small business. year and got working we're at some bit So this of

small maintenance higher So growth year, little partly it's it’s initiatives. of partly why this some and a our that's then very

Tim Raeke

East million that's this is QX, So similar be obviously to in that it you on will like the at downtime. lost Dubuque $X purpose

Mark Pytosh

it’s different that idea… bit but than the Yes, little same

Susan Ball

capital the CapEx… which that expected that million $XX the Yes, and Mark the mentioned maintenance the expense your $X million spend, is

Operator

any closing Thank to questions like would remarks. are back this I over you. for at turn to no time. further management There the

Jay Finks

months Thank for quarter today. in you we for right. of being results. first talking And the you. another here forward look to very to call All much Well on couple you thank

Operator

today’s This teleconference. concludes Thank you.

your You at and participation may a Thank wonderful have your time. you disconnect lines day. for this

CVR Partners (UAN) 22 Feb 182017 Q4 Earnings call transcript