Hi-Crush Partners LP Resumes Distribution for the Third Quarter of 2017 and Announces Unit Buyback Program
October 17 2017 - 4:15PM
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 $0.15 per unit on all
common units, or $0.60 on an annualized basis, for the third
quarter of 2017. Separately, the Board of Directors also
approved a unit buyback program of up to $100 million.
"The stabilization of market conditions,
combined with strong demand for frac sand and logistics services
has benefited our business," said Laura Fulton, Chief Financial
Officer of Hi-Crush. "We prudently expanded our geographic
reach and operational capabilities in response to continued strong
customer demand, and our volumes and cash flow have improved
markedly. With this in mind, our management, along with the Board
of Directors, determined that the timing was appropriate to resume
capital return to unitholders and to do so in two distinct ways.
First, by reinstating cash quarterly distributions to unitholders,
effective beginning the third quarter, payable in the fourth
quarter of 2017. And second, by pursuing an opportunistic unit
buyback on the open market of up to $100 million as authorized by
our Board."
The buyback authorization is effective
immediately, and the program will continue until otherwise modified
or terminated by the Board of Directors in its sole discretion and
without notice. The Partnership has authority at this time
under its Term Loan and Revolving Credit Agreement for repurchases
of up to $20 million which, over the near-term and combined with
the initial quarterly distribution and its expected growth, is
well-aligned with Hi-Crush's capital return intentions. The
Partnership will seek consent allowing for the authorized amount of
up to $100 million. The buyback program does not obligate the
Partnership to repurchase any specific dollar amount or number of
units and may be suspended or discontinued at any time.
"The third quarter cash distribution, augmented
by the buyback program, reflects a thoughtful balance for our
long-term capital return program and furthers our goal of
maximizing value to our unitholders," said Robert E. Rasmus, Chief
Executive Officer of Hi-Crush. "The proactive and prudent
actions we took over the course of the industry downturn during the
last two years, and the subsequent upturn in activity, have
resulted in our ability to generate strong cash flow and positioned
Hi-Crush to begin returning capital to unitholders. With this
initial distribution, we are setting the foundation for sustainable
and meaningful growth over the near and long term. We continue to
see fundamentals for the frac sand industry improving and believe
we are uniquely positioned to take advantage as we execute on our
operational strategy of Mine. Move. Manage."
The distribution will be paid on November 14,
2017 to all common unitholders of record on October 31, 2017.
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.
About Hi-Crush
Hi-Crush is a premier provider of proppant and
logistics solutions to the North American energy industry.
Our portfolio of purpose-built production facilities are 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
production facilities' direct access to major U.S. railroads
enhance our delivery capabilities into consuming basins, while our
strategically located owned and operated in-basin terminals as well
as our in-basin 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
well site. For more information, visit www.hicrush.com.
Forward-Looking Statements
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 SEC, including those described under 1A of Hi-Crush’s Form
10-K for the year ended December 31, 2016 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.
Investor contact:Investor
Relationsir@hicrush.com
Marc Silverberg, ICRmarc.silverberg@icrinc.com(646) 277-1293
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