HOUSTON, April 19, 2018 (GLOBE NEWSWIRE) -- Hi-Crush Partners LP (NYSE:HCLP), or "Hi-Crush" or the "Partnership", announced today that the Board of Directors of its general partner has declared a quarterly cash distribution of $0.225 per unit on all common units, or $0.90 on an annualized basis, for the first quarter of 2018.
"Our business continues to benefit from a steady strengthening of demand for frac sand," said Laura C. Fulton, Chief Financial Officer of Hi-Crush. "The strong underlying market fundamentals we experienced in the first quarter, and our outlook for further growth, provided the backdrop for our management team and the Board of Directors to increase our quarterly distribution to $0.225 per unit, up from $0.20 per unit in the prior quarter. These results were achieved despite the widely broadcasted challenges from reduced rail service experienced throughout the industry in the first quarter of 2018. We are delivering on our objective of delivering sustainable and meaningful growth in our distribution, and continue to expect increases of approximately 10% per quarter for the foreseeable future, subject to market conditions and periodic review. We will maintain a capital strategy that remains responsive to the market throughout 2018, and the balance between additional distribution growth and ongoing unit repurchases will reflect this flexibility."
For the first quarter of 2018, Hi-Crush completed repurchases of an additional 753,090 common units, representing $9.4 million. In addition to the 2,030,163 common units repurchased during the fourth quarter of 2017, repurchases total $29.4 million. Hi-Crush remains committed to executing on the remaining approximately $70 million of repurchases under its $100 million authorized program. The repurchase program does not obligate the Partnership to repurchase any specific dollar amount or number of units, and may be suspended, modified or discontinued by the Board of Directors at any time, in its sole discretion and without notice.
Hi-Crush also announced that performance conditions had been met for the payment of contingent consideration, or earnout, related to the Blair acquisition previously completed in 2016 and the Whitehall acquisition completed in 2017. During the first quarter of 2018, the Partnership paid $5 million and $20 million of contingent consideration related to the Blair and Whitehall acquisitions, respectively, in cash to our sponsor.
"We are pleased to continue delivering on our promises through further growth in our distribution, as well as additional opportunistic purchases on our unit buyback program," said Robert E. Rasmus, Chief Executive Officer of Hi-Crush. "The level of capital return completed during the first quarter, combined with the performance-based earnout payments, is reflective of our cash flow generation, in addition to our commitment to deliver value to unitholders over the near- and long-term. We remain laser-focused on executing our Mine. Move. Manage. strategy to enable continued growth in our business and unitholder returns."
The distribution will be paid on May 15, 2018, to all common unitholders of record on May 1, 2018.
Distributions to Foreign Investors
The declaration of the distribution is intended to be a qualified notice to nominees under Treasury Regulation Section 1.1446-4(b), with 100% of the Partnership’s distributions to foreign investors attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.
Hi-Crush is a premier provider of proppant and logistics solutions to the North American energy industry. Our portfolio of purpose-built production facilities is capable of producing 13.4 million tons per year of high-quality monocrystalline sand, a specialized mineral used as a proppant during the well completion process, necessary to facilitate the recovery of hydrocarbons from oil and natural gas wells. Our Wisconsin production facilities' direct access to major U.S. railroads enhances our delivery capabilities into consuming basins, while our strategically located owned and operated in-basin terminals as well as our Texas production facility positions us within close proximity to significant activity in all major oil and gas basins for advantageous truck transportation. Our integrated distribution system, enhanced by our innovative PropStreamTM logistics solution, efficiently delivers proppant the "last mile" into the blender, providing customers surety of supply from mine to wellsite. For more information, visit www.hicrush.com.
Some of the information in this news release may contain forward-looking statements. Forward-looking statements give our current expectations, and contain projections of results of operations or of financial condition, or forecasts of future events. Words such as "may," "assume," "forecast," "position," "predict," "strategy," "expect," "intend," "plan," "estimate," "anticipate," "could," "believe," "project," "budget," "potential," or "continue," and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Hi-Crush’s reports filed with the Securities and Exchange Commission (the "SEC"), including those described under 1A of Hi-Crush’s Form 10-K for the year ended December 31, 2017 and any subsequently filed 10-Q. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the risk factors in our reports filed with the SEC or the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward looking statements include: the volume of frac sand we are able to sell; the price at which we are able to sell frac sand; the outcome of any pending litigation; changes in the price and availability of natural gas or electricity; changes in prevailing economic conditions; and difficulty collecting receivables. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. Hi-Crush’s forward-looking statements speak only as of the date made and Hi-Crush undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Marc Silverberg, ICR
Hi-Crush Partners LP