Document
false0001549848 0001549848 2019-08-06 2019-08-06


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
   _______________________________
Form 8-K
  _______________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2019
  _______________________________ 
Hi-Crush Inc.
(Exact name of registrant as specified in its charter)
   _______________________________
Delaware
(State or other jurisdiction of incorporation)
Delaware
001-35630
90-0840530
(State or Other Jurisdiction of Incorporation or Organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
1330 Post Oak Blvd, Suite 600
Houston, Texas 77056
(Address of Principal Executive Offices and Zip Code)
(713980-6200 
(Registrant’s telephone number, including area code)
  _______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following (See General Instruction A.2 below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common stock, par value $0.01 per share
HCR
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
 
 
 
 
 






Item 2.02 Results of Operations and Financial Condition

On August 6, 2019, Hi-Crush Inc. (the "Company") issued a press release announcing its second quarter 2019 conference call. The press release and presentation slides are being furnished with this Current Report on Form 8-K (this "Current Report") as Exhibits 99.1 and 99.2, respectively.

In accordance with General Instruction B.2 to Form 8-K, the information provided under this Item 2.02 and the information attached to this Current Report as Exhibit 99.1 and 99.2 shall be deemed to be "furnished" and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended ("the "Securities Act"), or the Exchange Act except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits
Exhibit Number
  
Exhibit Description
99.1
  
99.2
 
101.INS
 
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH
 
XBRL Taxonomy Extension Schema Document
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
Hi-Crush Inc.
 
 
 
 
 
 
Date:
August 6, 2019
 
By:
 
/s/ Laura C. Fulton
 
 
 
 
 
Laura C. Fulton
 
 
 
 
 
Chief Financial Officer



Exhibit


Exhibit 99.1
https://cdn.kscope.io/0910f9faeb5d294cad8f2015832a697f-hicrushinc.jpg
News Release

Hi-Crush Inc. Reports Second Quarter 2019 Results

Revenues of $178.0 million in 2Q 2019 vs. $159.9 million in 1Q 2019
Loss of $(1.16) per share in 2Q 2019, or $(0.02) per share excluding non-cash charge for deferred taxes related to the Conversion, completed on May 31, 2019, vs. $(0.06) per share in 1Q 2019
Achieved 2Q 2019 Adjusted EBITDA of $24.1 million, an increase of 40% vs. $17.2 million in 1Q 2019
Reported total sand sales of 2,662,086 tons in 2Q 2019, an increase of 10% vs. 2,411,262 tons in 1Q 2019
Completed record number of delivered last mile sand truckloads in 2Q 2019, an increase of 36% over 1Q 2019
Improved contribution margin per ton to $13.80 in 2Q 2019, an increase of 13% vs. $12.19 in 1Q 2019
Exited 2Q 2019 with total liquidity of $112.0 million, including $52.8 million of cash and no ABL borrowings

HOUSTON, August 6, 2019 - Hi-Crush Inc. (NYSE: HCR), "Hi-Crush" or the "Company," a fully-integrated, strategic provider of technology and logistics solutions to the North American petroleum industry, today reported second quarter 2019 results.

Revenues during the second quarter of 2019 totaled $178.0 million on total volumes sold of 2,662,086 tons. This compares to $159.9 million of revenues during the first quarter of 2019 on total volumes sold of 2,411,262 tons.

On May 31, 2019, the Company completed the conversion to a corporation (the "Conversion") and as a result recorded an estimated net non-cash deferred tax provision of $(115.5) million during the second quarter of 2019, or $(1.14) per share, representing the difference in the book basis and the tax basis of the Company's assets on the date of Conversion. Including the non-cash deferred taxes attributable to the Conversion, net loss was $(117.5) million for the second quarter of 2019, resulting in basic and diluted loss of $(1.16) per share. Excluding the non-cash deferred taxes attributable to the Conversion, adjusted net loss was $(2.0) million for the second quarter of 2019, resulting in basic and diluted adjusted loss of $(0.02) per share. The Company reported basic and diluted loss of $(0.06) per unit in the first quarter of 2019.

Adjusted EBITDA for the second quarter of 2019 was $24.1 million, an increase of 40% compared to $17.2 million for the first quarter of 2019.

"Our second quarter financial results surpassed expectations on revenue and Adjusted EBITDA, and reflected volumes on the high end of our guidance, primarily driven by services provided in our last mile business and Northern White sales," said Robert E. Rasmus, Chairman and Chief Executive Officer of Hi-Crush. "Our quarterly performance benefited from our intense focus on managing costs and delivering operating efficiencies, while also advancing our fully-integrated strategy with more last mile systems deployed, leading to positive free cash flow of $5.8 million during the second quarter. We are also pleased to achieve another record in quarterly sales to E&Ps, representing 66% of total second quarter volumes. I am proud of our team's continuous effort to best meet the needs of all of our customers with our improved equipment operations, advancements in technology, and in combination with further alignment of our business to focus on delivering the right services to the right customers within each service line. Also during the quarter, we achieved a major milestone with the completion of our conversion to a corporation structure, which enhances Hi-Crush’s ability to best succeed over the near and long-term."

Second Quarter 2019 Results

Revenues during the second quarter of 2019 totaled $178.0 million, reflecting an increase of 11% compared to $159.9 million in the first quarter of 2019. Revenues associated with logistics services were $51.1 million in the second quarter of 2019, reflecting an increase of 34% compared to $38.2 million in the first quarter of 2019. The improvements were due primarily to higher sand volumes and increased delivered truckloads through our last mile service, including increases due to the acquisition of Pronghorn Logistics in May 2019. Revenues from the sale of logistics equipment were $1.0 million in the second quarter of 2019 compared to $6.6 million in the first quarter of 2019.

Revenues from sales of frac sand totaled $125.9 million in the second quarter of 2019, reflecting an increase of 9% compared to $115.1 million in the first quarter of 2019. Total volumes sold were 2.7 million tons, an increase of 10% compared to the first quarter of 2019, primarily driven by a 21% increase in Northern White volumes. Average sales price of $47 per ton for the second quarter of 2019 was largely unchanged compared to $48 per ton in the first quarter of 2019.






Volumes sold directly to E&Ps during the second quarter of 2019 increased to a company record of 66%, compared to 63% in the first quarter of 2019 and 31% in the second quarter of 2018. Volumes sold at the wellsite through our logistics and wellsite operations business increased by 28% over the first quarter of 2019, representing another company record, and resulting from improved utilization of last mile crews during the second quarter of 2019. Volumes sold through our logistics and wellsite operations represented 28% of total volumes in the second quarter of 2019, up from 24% in the first quarter of 2019.

For the second quarter of 2019, last mile delivered truckloads were up 36% over the first quarter of 2019, resulting in higher utilization of deployed crews. The delivered truckloads metric will be used going forward to better enable comparison of quarterly last mile services activity and utilization of our last mile equipment, versus point-in-time deployment numbers of container or silo crews. As of June 30, 2019, the Company had 21 last mile crews operating in the Permian, Eagle Ford, Marcellus / Utica, Powder River, Mid-Con and Bakken regions, an increase from 13 crews at the end of the first quarter of 2019.

Contribution margin was $13.80 per ton in the second quarter of 2019, reflecting an increase of 13% compared to $12.19 per ton in the first quarter of 2019. The sequential increase in contribution margin per ton primarily resulted from higher sales volumes and the resulting reduction of production costs, particularly at our Wisconsin facilities, as well as sales through our last mile services.

General and administrative expenses totaled $12.1 million in the second quarter of 2019, excluding non-recurring expenses of $3.1 million associated with business development activities and costs associated with the Conversion. Compared to $11.6 million in the first quarter of 2019, excluding $1.0 million of non-recurring expenses associated with business development activities and costs associated with the Conversion, general and administrative expenses were relatively unchanged.

"We achieved strong financial results, supported by our team's success in improving efficiencies, reducing costs, and providing high quality last mile solutions to meet our customers’ high standards and dynamic requirements," said Laura C. Fulton, Chief Financial Officer of Hi-Crush. "In particular, our second quarter results benefited from increased profitability from our logistics and wellsite operations business, and higher Northern White volumes sold, along with improvements in production costs. Our organizational and operational agility continue to differentiate Hi-Crush, and are expected to further support strong profitability, cash flow and enhanced balance sheet flexibility going forward."

Operational Update

The Company also announced the reorganization of its operations into three distinct business lines, to more effectively serve target customers across logistics, equipment sales and rental, and frac sand supply. Following the acquisitions of FB Industries, the PropDispatch software and Pronghorn Logistics, and the combination of those businesses with the existing PropStream business, the Company has consolidated its logistics and wellsite operations under the name Pronghorn Energy Services. The equipment business supporting Pronghorn Energy Services will sell and lease equipment to third parties under the name NexStage Equipment Systems. Sand production and sales will continue to be handled under the name Hi-Crush Inc.

"The creation of a leading, comprehensive logistics and wellsite operations organization, under the name Pronghorn Energy Services, extends our reputation for leading safety, customer service and operational excellence, enhances our offering and allows us to pursue a wider range of market opportunities," commented M. Alan Oehlert, Chief Operating Officer of Hi-Crush. "The improvements we are making across our platform, including enhancements to our PropDispatch technology, expand the value of the integrated last mile offerings we provide and result in what we believe is an unmatched portfolio of critical logistics and wellsite solutions. These improvements are crucial to addressing our customers’ primary focus - lower delivered cost per ton into the blender, combined with safety, service, and reliability.

"Additionally, the branding of our equipment leasing and sales under the name NexStage Equipment Systems reflects an important step in our continued development of a truly differentiated set of equipment solutions," continued Mr. Oehlert. "We are proud to provide the only last mile offering with both silos and containers. The customer flexibility this provides, combined with enhanced measurement and other upgrades, will serve as key differentiators for NexStage."

Liquidity

As of June 30, 2019, Hi-Crush had $52.8 million of cash, no borrowings and $59.2 million in available borrowing capacity under its senior secured revolving credit facility (the "ABL Facility"), resulting in total liquidity of $112.0 million.






Stock Repurchase Program

On June 8, 2019, the Company's board of directors approved a stock repurchase program of up to $25.0 million, effective on that date and authorized through June 2020. As of June 30, 2019, the Company has repurchased a total of 1,177,731 common shares for a total cost of $3.2 million. The Company's stock repurchase program had $21.8 million of remaining authorized capacity as of June 30, 2019.

"The Board authorized repurchase program and the recent purchases of shares by the Company and management reflect ongoing confidence in our strategy and the strength of our balance sheet," said Mr. Rasmus. "We remain committed to balancing our capital allocation priorities over the next year, including additional stock repurchases or opportunistic purchases of debt."

The Company has no restrictions with regard to stock or debt repurchases under its ABL Facility and Senior Notes due 2026 (the "Senior Notes"). The repurchase program does not obligate the Company to repurchase any specific dollar amount or number of shares, and may be suspended, modified or discontinued by the Board of Directors at any time, in its sole discretion and without notice.

Capital Expenditures

Total capital expenditures for the six months ended June 30, 2019 totaled $57.9 million. Growth capex for the six months ended June 30, 2019 totaled $19.2 million, primarily related to spending on logistics assets, including new topfill conveyor systems and trailers. For the second half of 2019, growth capex, including upgrades to the current silo systems and PropDispatch enhancements, is expected to range between $10 and $15 million.

Maintenance capex for the six months ended June 30, 2019 totaled $7.7 million. For the second half of 2019, maintenance capex is expected to range between $6 and $8 million.

Carryover growth capex from 2018 for construction projects associated with completion of our second Kermit facility and expansion at our Wyeville facility totaled $31.0 million. These expansion initiatives were fully-funded in 2018.

"We have continued to strategically deploy capital for the development of our equipment, focusing our investments on meeting the evolving requirements of our customers," said Ms. Fulton. "We are balancing thoughtful investments focused on minimizing the delivered cost of sand for our customers, combined with a major focus on generating strong investment returns and free cash flow. We are excited about the response we have received from the equipment upgrades we have made, and we are committed to limiting future investments to customer-driven, high impact opportunities. As a result, we expect a meaningfully lower capex spend for the remainder of 2019, with growth in the logistics and wellsite operations business coming from incremental improvements in technology and utilization of existing assets."

Free Cash Flow

Free cash flow was $5.8 million and $(17.9) million for the three and six months ended June 30, 2019, respectively. Free cash flow for the six months ended June 30, 2019 reflects the semi-annual interest payment made in February 2019 on the Senior Notes. Free cash flow for the three and six months ended June 30, 2019 excludes $5.8 million and $31.0 million, respectively, in 2018 carryover capex spending, which was fully-funded in 2018.

"This has been a year of strategic investment, aimed at best positioning our business for ongoing success regardless of market conditions," said Ms. Fulton. "In 2020, we anticipate reduced capex compared to the growth and maintenance capex spending in 2019, while maintaining strong liquidity and a focus on cash flow generation. Our leading, fully-integrated solutions offering, combined with returns on equipment investments and a reduction in capital investment requirements, is expected to result in positive free cash flow in 2020."






Corporate Conversion

On May 22, 2019, the unitholders of Hi-Crush Partners LP approved the proposed Conversion of its corporate structure from a master limited partnership (MLP) to a C-Corporation. As a result of the Conversion, the Company converted from an entity treated as a partnership for U.S. federal income tax purposes to an entity treated as a corporation for U.S. federal income tax purposes and is therefore subject to U.S. federal, state and local corporate income tax. The Conversion resulted in the Company obtaining a partial step-down in the tax basis of certain assets, and the Company recorded an estimated deferred tax provision of $(115.5) million, representing the excess of book basis over tax basis on the date of Conversion. The deferred tax provision does not impact the tax treatment of the Conversion to the Company's former unitholders.

"We do not anticipate any significant cash taxes for U.S. federal income tax purposes for the next few years as a result of available depreciation deductions," said Ms. Fulton. "Further, cash taxes associated with our state and Canadian operations are expected to be minimal for the foreseeable future."

Outlook

Reflecting customer conversations and potential market conditions, the Company expects total sales volumes to be in a range of 2.4 to 2.7 million tons for the third quarter of 2019. The Company also expects continued deployment of last mile systems during the second half of 2019. Outlook for volumes and last mile operations is subject to market conditions, E&P budget management and other factors.

"We remain intensely focused on managing our business in a way that maximizes shareholder value and cash flow over the near and long-term," said Mr. Rasmus. "The widely discussed potential for E&P budget exhaustion in the back half of 2019 could result in a modest decrease in activity levels late in the third quarter of 2019. We have taken steps to lower our cost structure and leverage the flexibility of our operations to respond to changes in our operating environment, while maintaining our focus on excellent customer service and safety. Our deep relationships with our E&P customers continue to provide visibility into their dynamic needs, and our platform of services is able to react quickly to provide fit-for-purpose solutions for whatever our customers require. We expect to continue the discipline we demonstrated in the second quarter which will lead to positive free cash flow generation in 2020, while keeping our balance sheet strong and flexible to meet the demands of an ever changing market."

Conference Call

On Wednesday, August 7, 2019, Hi-Crush will hold a conference call for investors at 7:30 a.m. Central Time (8:30 a.m. Eastern Time) to discuss Hi-Crush’s second quarter 2019 results. Hosting the call will be Robert E. Rasmus, Chairman and Chief Executive Officer, M. Alan Oehlert, Chief Operating Officer, and Laura C. Fulton, Chief Financial Officer. The call can be accessed live over the telephone by dialing (877) 407-0789, or for international callers, (201) 689-8562. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the replay is 13691985. The replay will be available until August 21, 2019.

Interested parties may also listen to a simultaneous webcast of the conference call by logging onto Hi-Crush’s website at www.hicrush.com under the Investors-Event Calendar and Presentations section. A replay of the webcast will also be available for approximately 30 days following the call. The slide presentation to be referenced on the call will also be on Hi-Crush’s website at www.hicrush.com under the Investors-Event Calendar and Presentations section.

Non-GAAP Financial Measures

This news release and the accompanying schedules include the non-GAAP financial measure of EBITDA, Adjusted EBITDA, free cash flow and contribution margin, which may be used periodically by management when discussing our financial results with investors and analysts. The accompanying schedules of this news release provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America ("GAAP").

We define EBITDA as net income, plus; (i) depreciation, depletion and amortization; (ii) interest expense, net of interest income; and (iii) income tax expense. We define Adjusted EBITDA as EBITDA, plus; (i) non-cash impairments of long-lived assets and goodwill; (ii) change in estimated fair value of contingent consideration; (iii) earnings (loss) from equity method investments; (iv) gain on remeasurement of equity method investments; (v) loss on extinguishment of debt; and (vi) non-recurring business development costs and other items. EBITDA and Adjusted EBITDA are supplemental measures utilized by our management and other users of our financial statements, such as investors, commercial banks and research analysts, to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.






We define free cash flow as net cash provided by (used in) operating activities less maintenance and growth capital expenditures. Free cash flow is a supplemental measure utilized by our management and other users of our financial statements, such as investors, commercial banks and research analysts, to assess our ability to generate cash from operations for mandatory obligations, including debt repayment, and discretionary investment opportunities.

We use contribution margin, which we define as total revenues less costs of goods sold excluding depreciation, depletion and amortization, to measure our financial and operating performance. Contribution margin excludes other operating expenses and income, including costs not directly associated with the operations of our business such as accounting, human resources, information technology, legal, sales and other administrative activities. We believe contribution margin is a meaningful measure because it provides an operating and financial measure of our ability to generate margin in excess of our operating cost base. 

About Hi-Crush

We are a fully-integrated, strategic provider of technology and logistics solutions to the North American petroleum industry. Our integrated suite of offerings, including software, range of equipment solutions for wellsite storage and delivery of proppant, owned and operated terminals, and frac sand mining facilities, as well as third party sourcing for proppant, provides customers with mine-to-wellsite logistics solutions in all major oil and gas basins in the United States.

Forward-Looking Statements

Some of the information in this news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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," "should," "assume," "forecast," "position," "predict," "strategy," "expect," "intend," "hope," "plan," "estimate," "anticipate," "could," "believe," "project," "budget," "potential," "likely," 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 Item 1A of Hi-Crush’s Form 10-K for the year ended December 31, 2018 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, claims or assessments, including unasserted claims; changes in the price and availability of natural gas or electricity; changes in prevailing economic conditions; 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.

Investor contact:
Caldwell Bailey, Lead Investor Relations Analyst
Marc Silverberg, ICR
ir@hicrush.com
(713) 980-6270






Unaudited Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
 
Three Months Ended
 
June 30,
 
March 31,
 
2019
 
2018 (1)
 
2019
Revenues
$
178,001

 
$
248,520

 
$
159,910

Cost of goods sold (excluding depreciation, depletion and amortization)
141,272

 
154,531

 
130,522

Depreciation, depletion and amortization
14,062

 
10,482

 
11,272

Gross profit
22,667

 
83,507

 
18,116

Operating costs and expenses:
 
 
 
 
 
General and administrative expenses
15,210

 
12,943

 
12,613

Depreciation and amortization
1,697

 
536

 
1,676

Accretion of asset retirement obligations
130

 
123

 
129

Change in estimated fair value of contingent consideration
(672
)
 

 

Other operating expenses, net
469

 
371

 
431

Income from operations
5,833

 
69,534

 
3,267

Other income (expense):
 
 
 
 
 
Earnings from equity method investments
1,284


1,144

 
1,116

Gain on remeasurement of equity method investment
3,612

 

 

Interest expense
(11,806
)
 
(3,722
)
 
(10,590
)
Income (loss) before income tax
(1,077
)
 
66,956

 
(6,207
)
Income tax expense (benefit):
 
 
 
 
 
Current tax
259

 

 

Deferred tax
660

 

 

Deferred tax resulting from conversion to a corporation
115,488

 

 

Income tax expense
116,407

 

 

Net income (loss)
$
(117,484
)
 
$
66,956

 
$
(6,207
)
Earnings (loss) per common share:
 
 
 
 
 
Basic
$
(1.16
)
 
$
0.68

 
$
(0.06
)
Diluted
$
(1.16
)
 
$
0.67

 
$
(0.06
)
Weighted average common stock outstanding:
 
 
 
 
 
Basic
101,312,754

 
88,392,179

 
101,017,441

Diluted
101,312,754

 
89,729,428

 
101,017,441


(1)
Financial information has been recast to include the results attributable to the sponsor and general partner.





 
Six Months Ended
 
June 30,
 
2019
 
2018 (1)
Revenues
$
337,911

 
$
466,633

Cost of goods sold (excluding depreciation, depletion and amortization)
271,794

 
296,514

Depreciation, depletion and amortization
25,334

 
18,281

Gross profit
40,783

 
151,838

Operating costs and expenses:
 
 
 
General and administrative expenses
27,823

 
23,886

Depreciation and amortization
3,373

 
1,061

Accretion of asset retirement obligations
259

 
249

Change in estimated fair value of contingent consideration
(672
)
 

Other operating expenses, net
900

 
1,370

Income from operations
9,100

 
125,272

Other income (expense):
 
 
 
Earnings from equity method investments
2,400

 
2,310

Gain on remeasurement of equity method investment
3,612

 

Interest expense
(22,396
)
 
(7,195
)
Income (loss) before income tax
(7,284
)
 
120,387

Income tax expense (benefit):
 
 
 
Current tax
259

 

Deferred tax
660

 

Deferred tax resulting from conversion to a corporation
115,488

 

Income tax expense
116,407

 

Net income (loss)
$
(123,691
)
 
$
120,387

Earnings (loss) per common share:
 
 
 
Basic
$
(1.22
)
 
$
1.32

Diluted
$
(1.22
)
 
$
1.30

Weighted average common stock outstanding:
 
 
 
Basic
101,165,914

 
88,629,958

Diluted
101,165,914

 
89,967,207


(1)
Financial information has been recast to include the results attributable to the sponsor and general partner.


Unaudited Adjusted Net Loss and Adjusted Loss Per Common Share
(Amounts in thousands, except shares, units, per share and per unit amounts)
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2019
Net loss
$
(117,484
)
 
$
(123,691
)
Deferred tax resulting from conversion to a corporation
$
115,488

 
$
115,488

Adjusted net loss
$
(1,996
)
 
$
(8,203
)
 
 
 
 
Basic weighted average common shares outstanding
101,312,754

 
101,165,914

Potentially dilutive common shares

 

Diluted weighted average common shares outstanding
101,312,754

 
101,165,914

 
 
 
 
Adjusted loss per share - basic
$
(0.02
)
 
$
(0.08
)
Adjusted loss per share - diluted
$
(0.02
)
 
$
(0.08
)






Unaudited EBITDA and Adjusted EBITDA
(Amounts in thousands)
 
Three Months Ended
 
June 30,
 
March 31,
 
2019
 
2018
 
2019
Reconciliation of Adjusted EBITDA to net income (loss):
 
 
 
 
 
Net income (loss)
$
(117,484
)
 
$
66,956

 
$
(6,207
)
Depreciation and depletion expense
14,237

 
10,598

 
11,500

Amortization expense
1,522

 
420

 
1,448

Interest expense
11,806

 
3,722

 
10,590

Income tax expense
116,407

 

 

EBITDA
26,488

 
81,696

 
17,331

Change in estimated fair value of contingent consideration
(672
)
 

 

Earnings from equity method investments
(1,284
)
 
(1,144
)
 
(1,116
)
Gain on remeasurement of equity method investment
(3,612
)
 

 

Non-recurring business development costs and other items (1)
3,135

 
1,084

 
1,009

Adjusted EBITDA
$
24,055

 
$
81,636

 
$
17,224


(1)
Non-recurring business development costs and other items for the three months ended June 30, 2019 and March 31, 2019, are primarily associated with the Conversion and business acquisitions. Non-recurring business development costs and other items for the three months ended June 30, 2018, are primarily associated with lease termination fees and expenses associated with the relocation of our corporate offices, following displacement from Hurricane Harvey and business development and legal costs.

 
Six Months Ended
 
June 30,
 
2019
 
2018
Reconciliation of Adjusted EBITDA to net income (loss):
 
 
 
Net income (loss)
$
(123,691
)
 
$
120,387

Depreciation and depletion expense
25,737

 
18,501

Amortization expense
2,970

 
841

Interest expense
22,396

 
7,195

Income tax expense
116,407

 

EBITDA
43,819

 
146,924

Change in estimated fair value of contingent consideration
(672
)
 

Earnings from equity method investments
(2,400
)
 
(2,310
)
Gain on remeasurement of equity method investment
(3,612
)
 

Non-recurring business development costs and other items (1)
4,144

 
1,084

Adjusted EBITDA
$
41,279

 
$
145,698


(1)
Non-recurring business development costs and other items for the six months ended June 30, 2019, are primarily associated with the Conversion and business acquisitions. Non-recurring business development costs and other items for the six months ended June 30, 2018, are primarily associated with lease termination fees and expenses associated with the relocation of our corporate offices, following displacement from Hurricane Harvey and business development and legal costs.





Unaudited Condensed Consolidated Cash Flow Information
(Amounts in thousands)
 
Six Months Ended
 
June 30,
 
2019
 
2018 (1)
Operating activities
$
8,975

 
$
140,723

Investing activities
(61,039
)
 
(43,191
)
Financing activities
(9,350
)
 
(76,766
)
Effects of exchange rate on cash
11

 

Net change in cash
$
(61,403
)
 
$
20,766


(1)
Financial information has been recast to include the results attributable to the sponsor and general partner.


Unaudited Free Cash Flow
(Amounts in thousands)
The following table presents a reconciliation of free cash flow to the most directly comparable GAAP financial measure, as applicable, for each of the periods indicated:
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2019
Net cash provided by operating activities
$
17,582

 
$
8,975

Less: Maintenance capital expenditures
(3,717
)
 
(7,723
)
Less: Growth capital expenditures (1)
(8,089
)
 
(19,167
)
Free cash flow
$
5,776

 
$
(17,915
)
(1)
We have excluded growth capital expenditures of $5,840 and $31,045 spent during the three and six months ended June 30, 2019, respectively, related to construction projects associated with completion of our second Kermit facility and expansion at our Wyeville facility, both of which were fully-funded in 2018. All other growth capital expenditures related to investments in our logistics and wellsite operations are included in the above.


Unaudited Per Ton Operating Activity
(Amounts in thousands, except tons and per ton amounts)
 
Three Months Ended
 
June 30,
 
March 31,
 
2019
 
2018
 
2019
Sand sold
2,662,086

 
3,037,504

 
2,411,262

Contribution margin
$
36,729

 
$
93,989

 
$
29,388

Contribution margin per ton sold
$
13.80

 
$
30.94

 
$
12.19


 
Six Months Ended
 
June 30,
 
2019
 
2018
Sand sold
5,073,348

 
5,655,131

Contribution margin
$
66,117

 
$
170,119

Contribution margin per ton sold
$
13.03

 
$
30.08







hcrq22019earningspresent
Hi-Crush, Inc. NYSE: HCR Investor Presentation August 2019


 
Forward Looking Statements and Non-GAAP Measures Forward-Looking Statements and Cautionary Statements Some of the information in this presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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," "should," "assume," "forecast," "position," "predict," "strategy," "expect," "intend," "hope," "plan," "estimate," "anticipate," "could," "believe," "project," "budget," "potential," "likely," 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 SEC, including those described under Item 1A of Hi-Crush’s Form 10-K for the year ended December 31, 2018 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, claims or assessments, including unasserted claims; 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. Use of Non-GAAP Information This presentation may include non-GAAP financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. For additional disclosure regarding such non-GAAP measures, including reconciliations to their most directly comparable GAAP measure, please refer to Hi-Crush’s most recent earnings release at www.hicrush.com. 2


 
The Hi-Crush Value Proposition Investor value creation Leading customer service delivering reliability, safety and efficiency Financial discipline focused on flexibility and efficient capital allocation Fully-integrated platform to most efficiently service customers Supplier of essential products and services for well completions and development of U.S. shale 3


 
Our Financial Priorities What We’re Focused On Maximizing Investment Returns Generating free cash flow and  Executing strategy through operational excellence strategic value and leveraging existing asset base and capabilities Free Cash Flow Generation Expecting positive free cash  Strong base of cash flow generation, supported by flow for full-year 2020 operational diversity and flexible capital program Strong Liquidity and Balance Sheet $112.0mm million of liquidity;  Maintaining strong liquidity including cash and ABL no covenants or near-term availability; balance sheet supports financial flexibility debt maturities Efficient Capital Allocation Reducing 2019 capex, $25mm  Commitment to balancing liquidity, balance sheet share buyback authorized strength, growth initiatives and capital return 4


 
Our Fully-Integrated Platform Customer Solutions Logistics & Equipment Flexible solutions utilizing silos and containers Technology PropDispatch: Real-time logistics and inventory management Terminal Network Owned & operated In-Basin Northern White Production facilities Production facilities Fully-Integrated Platform 5


 
Operational Structure Our structure gives us the ability to directly address specific customer needs with fit-for-purpose solutions Proppant Management, Logistics Dispatch and Inventory Monitoring Software PRONGHORN Energy Services Sand Supply and In-Basin Distribution Logistics and Equipment Sales and Terminals Wellsite Operations Leasing Each Business Line Addresses Unique Customer Requirements 6


 
Business Update 7


 
Latest Business Updates Liquidity and Cash Flow Last Mile $112.0mm in cash and available liquidity Loads up 36% in 2Q19 vs. 1Q19; 21 exiting 2Q19; generated $5.8mm of free systems deployed at the end of 2Q19; cash flow in 2Q19 operating as Pronghorn Energy Services Adjusted EBITDA E&P Relationships Achieved $24.1mm of Adjusted EBITDA in Continue to advance strategy of selling 2Q19, above expectations and reflecting directly to E&Ps; 66% of 2Q19 volumes; sequential growth of 40% up from 63% in 1Q19 and 51% in 4Q18 Sales Volumes Share Repurchases Achieved 2Q19 quarterly sales volume of Board authorized $25mm share 2.7mm tons, reflecting sequential increase repurchase program; repurchased of 10% 1.2mm shares for $3.2mm to date Contribution Margin C-Corp Conversion Delivered 2Q19 contribution margin per ton Effected conversion from MLP to C-Corp of $13.80 vs. $12.19 in prior quarter, on May 31, 2019 following successful reflecting sequential growth of 13% unitholder vote on May 22, 2019 8


 
Sustainable Capital Position Balance sheet flexibility enables Hi-Crush to address changing market dynamics and opportunities Strong Supportive Flexible Cash & liquidity Capital position Balance sheet $112.0mm1 No $443.2mm / $390.4mm1 Total Liquidity Maintenance Covenants Total / Net Debt $52.8mm1 No 3.8x3 Cash Principal Payments2 Net Debt / LTM EBITDA $59.2mm1 No $25mm ABL Availability Borrowings on ABL Stock Repurchase Program 1) As of June 30, 2019. 2) ABL Facility as of June 30, 2019: $59.2mm available at L+2.25% ($80.8mm borrowing base less $21.6mm of LCs). ABL Facility matures 2023; Senior Notes due 2026; interest payments on Senior Notes of $21.4mm due each February and August. 3) For the twelve months ended June 30, 2019. 9


 
Current Debt Structure Senior Notes ABL Facility $450mm $200mm $397.2mm net of cash1 $59.2mm of availability2 No maturities until August 2026 No borrowings No near-term maturities Highly flexible balance Supports efficient or covenant restrictions sheet position capital allocation 1) Cash balance of $52.8mm as of June 30, 2019. 2) ABL Facility as of June 30, 2019: $59.2mm available at L+2.25% ($80.8mm borrowing base less $21.6mm of LCs). 10


 
Capital Return via Stock Repurchases • Stock repurchase program approved for up to $25 million $3.2mm • Effective through June 30, 2020 completed to date1 Supported by… Balance Sheet Strength Ongoing Confidence in Strategy  $112.0mm total liquidity2  Leading proppant logistics solutions  No borrowings on ABL facility  Focused on serving E&P customers  No maintenance covenants  Deployment of technology  No maturities until 2026  Low-cost production Funded with… Existing cash Capex reductions Future free cash flow 1) Purchases made through June 20, 2019 under 10b-18 program, which places limitations on purchase amounts based on 30-day average volume and dates purchases can be made prior to the end of quarterly reporting period and for two days subsequent to earnings release date. 2) As of June 30, 2019. 11


 
Corporate Conversion Process is Complete Conversion to C-Corporation completed on May 31, 2019 Simplify Current Corporate Structure Remove structural hurdles to conversion and align interests of management and the unitholders Determine Optimal Conversion Structure Due diligence to determine how to eliminate or minimize any tax implications for unitholders Issue Proxy Statement Proxy statement to outline company strategy post-conversion and any potential tax implications Unitholder Vote Unitholders of record to vote on proposed conversion to C-Corporation on May 22, 2019 Conversion to C-Corporation Upon approval from unitholders, finalize conversion to C-Corporation and exchange units for shares of common stock - completed on May 31, 2019 Finalize Governance Structure Following conversion, finalize corporate governance structure to enhance shareholder participation 12


 
E&P Customer Benefits of Aligning with Hi-Crush Aligning with Hi-Crush supports enhanced operations and efficiency Dedicated frac sand Reliable supply from Diversified across regions provider with sand, multiple frac sand from operations in multiple silos and containers production facilities basins Optionality in last mile Integrated production Safety centric culture with and in-basin delivery and delivery process meet a track-record among the points long planning cycles best in industry Supported by leadingThe Result…-edge technology platform “We have typically sourced sand directly through our frac vendor, but we saw an opportunity here with Hi-Crush to gain efficiencies and improve our operations through integrated sand and logistics services – and we took it.” 13


 
Hi-Crush Benefits of Aligning with E&P Customers Relationship Driven Long project lead times and significant capital 66% requirements drive E&Ps to value strategic of quarterly sales volumes in 2Q19 relationships with suppliers who offer sold to E&P customers differentiated solutions 66% 63% Better Visibility Closer relationships provide greater visibility into 51% constantly-evolving activity, demand trends and market fundamentals 40% 33% 31% Growth Opportunity 25% Addressing E&Ps’ need for a direct-sourced, preferred provider of flexible, full-scope proppant 14% and logistics solutions 7% 0% 1% Reduces Volatility Partnering with the right E&Ps enhances stability as drilling and completion “manufacturing” programs are more consistent through commodity cycles % of total quarterly sales volumes 14


 
PropDispatch: Real-Time Logistics Management Advancing our last mile platform with best in class technology PropDispatch Software • Manages and displays on-pad inventory, in containers or silos, to accurately provide volume delivered downhole and minimize or eliminate trucking demurrage • Enables dispatching and real-time monitoring of truck loads between the transload and pad • Simplifies back office truck load reconciliation process • Comprehensive dashboards and real-time KPIs • Ability to integrate seamlessly to virtually any application Last mile simplified Real-time visibility Central dispatch Simplifies ordering, dispatching, Enables real-time decision making Efficiently dispatch drivers based hauling, tracking, reconciling and utilizing constant data flow of truck on location and proximity to supply invoicing of trucks and sand loads vs. inventory points 15


 
Driving Efficiency Through Technology & Equipment Meaningful opportunities exist to capture efficiencies that lead to lowest cost at the blender Dispatch to Load Time at Travel Time to Unload Time at Load Time Origin Destination Destination  Creates significant logistics  Flexible selection of equipment efficiencies with effectiveness of solutions maximizes wellsite dispatch team efficiency  PropDispatch technology  Proprietary conveyor and hopper employs systematic approach to bottom equipment meaningfully the load, dispatch and monitoring reduces offload times and process maximizes truck turns  Enhances ability to make  Precise measurement of sand into informed real-time decisions the blender results in better inventory management 16


 
Financial & Operating Outlook Guidance Metric Guidance Value Period Quarterly sales volumes 2.4 – 2.7mm tons Q3 2019 DD&A expense $14.5 – $15.5mm Q3 2019 G&A expense $11.5 – $12.5mm Q3 2019 Maintenance capex $6 – $8mm 2H 2019 Growth capex $10 – $15mm 2H 2019 U.S. federal cash taxes None FY 2019 – 2020 17


 
Fulfilling Our Corporate Responsibilities From our CEO Evidence of Our Commitment “The most important asset at Hi-Crush Behavior-based safety program is our people. Ensuring the health and ingrained in all aspects of our safety of our workers is a core culture across mine and logistics element of our culture.” operations; aimed at accident – Bob Rasmus prevention and rewards positive behavior Our CRUSH Principles Support SAFETY First Our Wisconsin mine and production facilities participate in Compliance the Wisconsin Department of Natural Resources Green Tier Program as a Tier 1 participant Reduction Understanding Responsibilities >90% reduction of particulate >90% matter emissions from wellsite Sustainable Practices sand operations from PropStream, meeting OSHA PEL Habitual Improvement regulations 18


 
Focused on a Rich Set of Corporate Values Environment Governance and Ethics  Water quality and usage  Governance  Air quality  Ethics  Energy usage and GHG emissions  Regulatory & legal environment management  Waste disposal and recycling  Critical risk management  Light pollution People  Noise pollution  Safety & health  Wetland protection  Culture/corporate commitment  Reclamation/habitat improvements  Community involvement  Wildlife Protection  Diversity and inclusion  Green Tier Program  Engagement  Workforce training & development  Local hiring 19


 
Appendix 20


 
Key Financial Metrics $ in 000s, except per ton Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Revenues $ 248,520 $ 213,972 $ 162,235 $ 159,910 $178,001 Adjusted EBITDA1 $ 81,636 $ 52,048 $ 14,889 $ 17,224 $24,055 Average selling price ($/ton) $ 70 $ 64 $ 58 $ 48 $47 Sales volumes (tons) 3,037,504 2,775,360 1,976,805 2,411,262 2,662,086 Contribution margin ($/ton)2 $ 30.94 $ 23.92 $ 14.35 $ 12.19 $13.80 • Revenues increased 11% sequentially, driven by higher Northern White sales volumes and volumes sold through our logistics and wellsite operations • Adjusted EBITDA increased to $24.1mm, driven by higher volumes and improved contribution margin per ton • Contribution margin per ton of $13.80, an increase of 13%, driven by increased sales volumes and positive impact on production costs, particularly at the Wisconsin facilities 1) EBITDA is defined as net income, plus; (i) depreciation, depletion and amortization; (ii) interest expense, net of interest income; and (iii) income tax expense. We define Adjusted EBITDA as EBITDA, plus; (i) non-cash impairments of long-lived assets and goodwill; (ii) change in estimated fair value of contingent consideration; (iii) earnings (loss) from equity method investments; (iv) gain on remeasurement of equity method investments; (v) loss on extinguishment of debt; and (vi) non- recurring business development costs and other items. 2) Contribution margin is defined as total revenues less costs of goods sold excluding depreciation, depletion and amortization. Contribution margin excludes other operating expenses and income, including costs not directly associated with the operations of our business such as accounting, human resources, information technology, legal, sales and other administrative activities. 21


 
Q2 2019: Summary – Statements of Operations Unaudited Quarterly Consolidated Statements of Operations (Amounts in thousands, except per unit amounts) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Revenues $ 248,520 $ 213,972 $ 162,235 $ 159,910 $ 178,001 Cost of goods sold (excluding depreciation, depletion and amortization) 154,531 147,583 133,877 130,522 141,272 Depreciation, depletion and amortization 10,482 10,241 9,762 11,272 14,062 Gross profit 83,507 56,148 18,596 18,116 22,667 Operating costs and expenses: General and administrative expenses 12,943 14,164 16,982 12,613 15,210 Depreciation and amortization 536 1,347 1,457 1,676 1,697 Accretion of asset retirement obligations 123 124 125 129 130 Change in estimated fair value of contingent consideration — — — — (672) Other operating expenses, net 371 754 1,072 431 469 Income (loss) from operations Marc - can you69,534 please 39,759 (1,040) 3,267 5,833 Other income (expense): Earnings from equity method investments add the table on1,144 this 1,624 1,250 1,116 1,284 Gain on remeasurement of equity method investment — — — — 3,612 Interest expense slide (3,722) (8,012) (10,140) (10,590) (11,806) Loss on extinguishment of debt — (6,233) — — — Income (loss) before income tax 66,956 27,138 (9,930) (6,207) (1,077) Income tax expense (benefit): Current tax — — — — 259 Deferred tax — — — — 660 Deferred tax resulting from conversion to a corporation — — — — 115,488 Income tax expense — — — — 116,407 Net income (loss) $ 66,956 $ 27,138 $ (9,930) $ (6,207) $ (117,484) Earnings (loss) per common share: Basic $ 0.68 $ 0.30 $ (0.08) $ (0.06) $ (1.16) Diluted $ 0.67 $ 0.29 $ (0.08) $ (0.06) $ (1.16) Note: Financial information has been recast to include the financial position and results attributable to the sponsor and general partner. 22


 
Q2 2019: EBITDA, Adjusted EBITDA and Free Cash Flow Unaudited EBITDA and Adjusted EBITDA (Amounts in thousands) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Reconciliation of Adjusted EBITDA to net income (loss): Net income (loss) $ 66,956 $ 27,138 $ (9,930) $ (6,207) $ (117,484) Depreciation and depletion expense 10,598 10,373 9,901 11,500 14,237 Amortization expense 420 1,215 1,318 1,448 1,522 Interest expense 3,722 8,012 10,140 10,590 11,806 Income tax expense — — — — 116,407 EBITDA 81,696 46,738 11,429 17,331 26,488 Change in estimated fair value of contingent consideration — — — — (672) Earnings from equity method investments (1,144) (1,624) (1,250) (1,116) (1,284) Gain on remeasurement of equity method investment — — — — (3,612) Loss on extinguishment of debt — 6,233 — — — Non-recurring business development costs and other items (1) 1,084 701 4,710 1,009 3,135 Adjusted EBITDA $ 81,636 $ 52,048 $ 14,889 $ 17,224 $ 24,055 Free Cash Flow Q2 2019 Q2 2019 YTD Net cash provided by operating activities $ 17,582 $ 8,975 Less: Maintenance capital expenditures (3,717) (7,723) Less: Growth capital expenditures (2) (8,089) (19,167) Free cash flow $ 5,776 $ (17,915) 1) Non-recurring business development costs and other items for Q2 2018 are primarily associated with lease termination fees and expenses associated with the relocation of our corporate offices, following displacement from Hurricane Harvey and business development and legal costs, Q3 2018 costs are associated with legal fees related to our Senior Notes offering and business development costs, Q4 2018 costs are associated with the acquisition of the sponsor and general partner, as well as severance costs and Q1 2019 and Q2 2019 costs are primarily associated with the Conversion and business acquisitions. 2) We have excluded growth capital expenditures of $5,840 and $31,045 spent during the three and six months ended June 30, 2019, respectively, related to construction projects associated with completion of our second Kermit facility and expansion at our Wyeville facility, both of which were fully-funded in 2018. All other growth capital expenditures related to investments in our logistics and wellsite operations are included in the above. 23


 
Solid Balance Sheet Strong liquidity and financial flexibility No debt payments before 2026 and no maintenance covenants $ in 000s March 31, 2019 June 30, 2019 Cash $ 60,404 $ 52,853 ABL Facility - - Senior unsecured notes1 440,935 441,244 Other notes payable 3,113 1,997 Total debt $ 444,048 $ 443,241 Net debt $ 383,644 $ 390,388 ABL Facility availability2 $ 55,164 $ 59,182 Total liquidity $ 115,568 $ 112,035 1) Senior unsecured notes due 2026: $450mm par value at 9.50%; presented net of issuance costs. 2) ABL Facility as of June 30, 2019: $59.2mm available at L+2.25% ($80.8mm borrowing base less $21.6mm of LCs). 24


 
Investor Contacts Caldwell Bailey Lead Analyst, Investor Relations Marc Silverberg Managing Director (ICR, Inc.) Phone: (713) 980-6270 E-mail: ir@hicrush.com 25