SUGAR LAND, Texas, May 1, 2012 /PRNewswire/ -- CVR Partners, LP
(NYSE: UAN), a manufacturer of ammonia and urea ammonium nitrate
(UAN) solution fertilizer products, today announced first quarter
2012 net income of $30.2 million, or
41 cents per fully diluted common
unit, on net sales of $78.3 million,
compared to net income of $16.7
million on net sales of $57.4
million for the 2011 first quarter.
(Logo: http://photos.prnewswire.com/prnh/20080226/CVRLOGO)
Adjusted EBITDA, a non-GAAP measure, was $38.0 million for the first quarter of 2012
compared to $25.9 million in the
first quarter of 2011.
"We are very pleased with our financial performance during the
first quarter of 2012," said Byron
Kelley, president and chief executive officer. "Lower
production volumes due to unscheduled down time for plant
maintenance in March were more than offset by higher sales prices
for our products in the first quarter of this year as compared to
the first quarter of 2011.
"In addition, given the strong pricing environment we have seen
during the last few months, the higher production rates at our
plant as a result of the March maintenance work, and our outlook
for the remainder of the year, we are increasing our full year
guidance," said Kelley.
Operations
For the first quarter 2012, average realized plant gate prices
for ammonia and UAN saw increases with ammonia up by 9 percent to
$613 per ton and UAN up by 51 percent
to $313 per ton, compared to
$564 per ton and $207 per ton for the same period in 2011.
CVR Partners produced 89,300 tons of ammonia during the first
quarter of 2012, of which 25,000 net tons were available for sale
while the rest was upgraded to 154,600 tons of more profitable
UAN. In the 2011 first quarter, the plant produced 105,300
tons of ammonia with 35,200 net tons available for sale with the
remainder upgraded to 170,600 tons of UAN.
On-stream factors during the 2012 first quarter were 93.3
percent for the gasifiers, 91.5 percent for the ammonia synthesis
loop, and 83.6 percent for the UAN conversion facility.
Distributions and Guidance
On April 26, 2012, CVR Partners
announced its first quarter 2012 distribution of 52.3 cents per common unit which will be paid on
May 15, 2012, to unitholders of
record on May 8, 2012. This will be
the fourth consecutive cash distribution paid by the partnership
since its IPO in April 2011, and will
result in cumulative cash distributions paid of $2.09 per common unit. This exceeds the
company's previous distribution guidance range of $2.00 to $2.05 per common unit for the 12 months
ended March 31, 2012, and represents
a 9 percent increase over its original distribution guidance of
$1.92 per common unit for the same
period.
CVR Partners said it is raising its previous distribution
guidance range for calendar year 2012 from $1.50 to $1.75 per
common unit to $1.65 to $1.85 per
common unit. Included in this guidance is an approximate
25 cent negative impact per common
unit associated with the company's biennial turnaround currently
scheduled for the 2012 fourth quarter. Normalized for the
turnaround, the distribution range would be approximately
$1.90 to $2.10 per common unit.
This news release contains forward-looking statements. You can
generally identify forward-looking statements by our use of
forward-looking terminology such as "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intend," "may,"
"might," "plan," "potential," "predict," "seek," "should," or
"will," or the negative thereof or other variations thereon or
comparable terminology. These forward-looking statements are only
predictions and involve known and unknown risks and uncertainties,
many of which are beyond our control. For a discussion of risk
factors which may affect our results, please see the risk factors
and other disclosures included in our Annual Report on
Form 10-K for the year ended Dec. 31, 2011, and any
subsequently filed quarterly reports on Form 10-Q. These
risks may cause our actual results, performance or achievements to
differ materially from any future results, performance or
achievements expressed or implied by these forward-looking
statements. Given these risks and uncertainties, you are
cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included in this
press release are made only as of the date hereof. CVR
Partners disclaims any intention or obligation to update publicly
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
About CVR Partners, LP
Headquartered in Sugar Land,
Texas, with manufacturing facilities located in Coffeyville, Kan., CVR Partners, LP is a
Delaware limited partnership
focused primarily on the manufacture of nitrogen fertilizers. The
CVR Partners nitrogen fertilizer manufacturing facility is the only
operation in North America that
uses a petroleum coke gasification process to produce nitrogen
fertilizer and includes a 1,225 ton-per-day ammonia unit, a 2,025
ton-per-day urea ammonium nitrate unit, and a dual-train gasifier
complex having a capacity of 84 million standard cubic feet per day
of hydrogen.
CVR Partners, LP
Financial and Operational Data
(all information in this release is unaudited except as
otherwise noted).
|
|
Three
Months Ended
March 31,
|
|
Change
from 2011
|
|
|
2012
|
2011
|
|
Change
|
Percent
|
|
|
(in
millions, except per unit data)
|
Consolidated Statement of Operations
Data:
|
Net sales
(1)
|
$
78.3
|
$
57.4
|
|
$
20.9
|
36.4%
|
Cost of
product sold – Affiliates
|
3.0
|
1.5
|
|
1.5
|
100.0
|
Cost of
product sold – Third parties
|
9.6
|
6.0
|
|
3.6
|
60.0
|
Direct
operating expense – Affiliates
|
0.4
|
0.7
|
|
(0.3)
|
(42.9)
|
Direct
operating expense – Third parties
|
22.5
|
22.3
|
|
0.2
|
0.9
|
Insurance
recovery – business interruption
|
—
|
(2.9)
|
|
2.9
|
(100.0)
|
Selling,
general and administrative expenses – Affiliates
|
3.8
|
6.4
|
|
(2.6)
|
(40.6)
|
Selling,
general and administrative expenses – Third parties
|
2.2
|
2.0
|
|
0.2
|
10.0
|
Depreciation and amortization
|
5.4
|
4.6
|
|
0.8
|
17.4
|
Operating income
|
31.4
|
16.8
|
|
14.6
|
86.9
|
Interest
expense and other financing costs
|
(1.2)
|
—
|
|
(1.2)
|
—
|
Other
income (expense), net
|
—
|
(0.1)
|
|
0.1
|
(100.0)
|
Net income
|
$ 30.2
|
$ 16.7
|
|
$ 13.5
|
80.8%
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per common unit – basic (2)
|
$
0.41
|
|
|
|
|
Net income
per common unit – diluted (2)
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
38.0
|
$
25.9
|
|
$
12.1
|
46.7%
|
Available
cash for distribution (2)*
|
$
38.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average, number of common units outstanding (in
thousands):
|
|
|
|
|
|
Basic (2)
|
73,031
|
|
|
|
|
Diluted (2)
|
73,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Below are
the components of Net sales:
|
|
|
|
Three
Months Ended
March 31,
|
|
|
2012
|
|
2011
|
|
Reconciliation to net sales (dollars in
millions):
|
|
|
|
|
Sales net plant gate
|
$
67.9
|
|
$
52.6
|
|
Freight in revenue
|
4.7
|
|
4.8
|
|
Hydrogen revenue
|
5.7
|
|
—
|
|
Total net sales
|
$ 78.3
|
|
$ 57.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
The
Partnership has omitted per unit data for the three months ended
March 31, 2011, as the Partnership operated under a different
capital structure prior to the closing of the Initial Public
Offering that closed on April 13, 2011; therefore, the per unit
information is not meaningful to investors.
|
|
* See "Use of Non-GAAP Financial Measures" below.
|
As of
March 31,
|
|
As of
December 31,
|
|
2012
|
|
2011
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance
Sheet Data:
|
|
|
|
Cash and
cash equivalents
|
$
225.6
|
|
$
237.0
|
Working
capital
|
204.1
|
|
229.4
|
Total
assets
|
656.9
|
|
659.3
|
Total
debt
|
125.0
|
|
125.0
|
Partners'
capital
|
478.0
|
|
489.5
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
|
(in
millions)
|
Other
Financial Data:
|
|
|
|
Cash flows
provided by operating activities
|
$
53.8
|
|
$
32.1
|
Cash flows
used in investing activities
|
(22.3)
|
|
(1.8)
|
Cash flows
used in financing activities
|
(42.9)
|
|
(1.7)
|
Net cash flow
|
$
(11.4)
|
|
$
28.6
|
|
|
|
|
Capital
expenditures
|
$
22.3
|
|
$
2.0
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
Key
Operating Statistics:
|
|
|
|
|
|
|
|
Production
(thousand tons):
|
|
|
|
Ammonia (gross produced) (1)
|
89.3
|
|
105.3
|
Ammonia (net available for sale)
(1)
|
25.0
|
|
35.2
|
UAN
|
154.6
|
|
170.6
|
|
|
|
|
Petroleum
coke consumed (thousand tons)
|
120.5
|
|
124.1
|
Petroleum
coke (cost per ton)
|
$
42
|
|
$
15
|
|
|
|
|
Sales
(thousand tons):
|
|
|
|
Ammonia
|
29.9
|
|
27.3
|
UAN
|
158.3
|
|
179.3
|
|
|
|
|
Product
pricing plant gate (dollars per ton) (2):
|
|
|
|
Ammonia
|
$
613
|
|
$
564
|
UAN
|
313
|
|
207
|
|
|
|
|
On-stream
factors (3):
|
|
|
|
Gasification
|
93.3%
|
|
100.0%
|
Ammonia
|
91.5%
|
|
96.7%
|
UAN
|
83.6%
|
|
93.2%
|
|
|
|
|
Market
Indicators:
|
|
|
|
Ammonia —
Southern Plains (dollars per ton)
|
$
586
|
|
$
605
|
UAN — Mid
Cornbelt (dollars per ton)
|
$
343
|
|
$
349
|
|
|
|
|
|
(1)
|
Gross tons
produced for ammonia represent total ammonia produced, including
ammonia produced that was upgraded into UAN. Net tons available for
sale represent ammonia available for sale that was not upgraded
into UAN.
|
|
|
(2)
|
Plant gate
sales per ton represent net sales less freight and hydrogen revenue
divided by product sales volume in tons in the reporting period,
and is shown in order to provide a pricing measure that is
comparable across the fertilizer industry.
|
|
|
(3)
|
On-stream
factor is the total number of hours operated divided by the total
number of hours in the reporting period and is included as a
measure of operating efficiency.
|
|
Use of Non-GAAP Financial Measures
To supplement the actual results in accordance with GAAP for the
applicable periods, the Partnership also uses non-GAAP measures as
discussed above, which are adjusted for GAAP-based results. The use
of non-GAAP adjustments are not in accordance with or an
alternative for GAAP. The adjustments are provided to enhance an
overall understanding of the Partnership's financial performance
for the applicable periods and are indicators management believes
are relevant and useful for planning and forecasting future
periods.
EBITDA is defined as net income before income tax
expense, net interest (income) expense and depreciation and
amortization expense, which are items management believes affect
the comparability of operating results. EBITDA is not a recognized
term under GAAP and should not be substituted for net income as a
measure of performance but should be utilized as a supplemental
measure of performance in evaluating our business. Management
believes that EBITDA provides relevant and useful information that
enables external users of our financial statements, such as
industry analysts, investors, lenders and rating agencies to better
understand and evaluate our ongoing operating results and allows
for greater transparency in the review of our overall financial,
operational and economic performance.
Adjusted EBITDA is defined as EBITDA adjusted for the
impact of share-based compensation, and, where applicable, major
scheduled turnaround expense and loss on disposition of assets. We
present Adjusted EBITDA because it is a key measure used in
material covenants in our credit facility. Adjusted EBITDA is not a
recognized term under GAAP and should not be substituted for net
income as a measure of our liquidity. Management believes that
Adjusted EBITDA enables investors and analysts to better understand
our liquidity and our compliance with the covenants contained in
our credit facility.
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
|
(in
millions)
|
Reconciliation of Net income to EBITDA and to
Adjusted EBITDA:
|
|
|
|
Net
income
|
$
30.2
|
|
$
16.7
|
Add:
|
|
|
|
Interest expense and other financing costs
|
1.2
|
|
—
|
Depreciation and amortization
|
5.4
|
|
4.6
|
EBITDA
|
$
36.8
|
|
21.3
|
Share-based compensation
|
1.2
|
|
4.6
|
Adjusted EBITDA
|
$ 38.0
|
|
$ 25.9
|
|
|
|
|
Available cash for distribution is not a recognized term
under GAAP. Amounts derived in the calculation are derived from
amounts separately presented in our consolidated financial
statements; with the exception of maintenance capital expenditures
and cash reserves for accrued expenses. The measure most directly
comparable to available cash is operating cash flow for which we
have reconciled to in this release. Available cash should not be
considered in isolation or as an alternative to net income or
operating income. Available cash as reported by the
Partnership may not be comparable to similarly titled measures of
other entities.
The Partnership announced a cash distribution of 52.3 cents per common unit for the first quarter
of 2012. The distribution was based on the Partnership's available
cash, which is generally equal to cash flow from operations for the
quarter, less cash needed for maintenance capital expenditures,
debt service and other contractual obligations, and reserves for
future operating or capital needs that the board of directors of
the general partner deems necessary or appropriate. The Partnership
also retains cash on hand associated with prepaid sales at each
quarter end for future distributions to common unitholders based
upon the recognition into income of the prepaid sales. Actual
distributions are set by the board of directors of our general
partner. The board of directors of our general partner may modify
our cash distribution policy at any time, and our partnership
agreement does not require us to make distributions at all.
|
Three
Months Ended
March
31, 2012
|
|
(in
millions, except per unit data)
|
Reconciliation of Cash flows from operations to
Available cash for distribution
|
|
Cash flows
from operations
|
$
53.8
|
|
|
Adjustments:
|
|
Plus: Deferred revenue balance at
December 31, 2011
|
9.0
|
Less: Deferred revenue balance at March
31, 2012
|
(16.0)
|
Less: Cash reserve for accrued
expenses
|
(7.5)
|
Less: Maintenance capital
expenditures
|
(1.1)
|
|
|
Available
cash for distribution
|
$ 38.2
|
|
|
Available
cash for distribution, per unit
|
$
0.523
|
SOURCE CVR Partners, LP