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NGL Energy Partners LP Announces First Quarter Fiscal 2022 Financial Results

TULSA, Okla.–(BUSINESS WIRE)–
NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its first quarter Fiscal 2022 results. Highlights for the quarter include:

• Loss from continuing operations for the first quarter of Fiscal 2022 of $134.5 million, compared to a loss from continuing operations of $33.8 million for the first quarter of Fiscal 2021
• Adjusted EBITDA¹ from continuing operations for the first quarter of Fiscal 2022 of $91.1 million, compared to $91.0 million for the first quarter of Fiscal 2021; Record quarterly Adjusted EBITDA of $81.5 million in the Water Solutions segment as produced water volumes approach pre-pandemic levels
• Sale of the Partnership’s approximately 71.5% interest in Sawtooth Caverns, LLC for gross consideration of $70.0 million
• Publication of the Partnership’s inaugural Sustainability Report, which can be found on the Partnership’s website (www.nglenergypartners.com)
• Reaffirms Fiscal 2022 Adjusted EBITDA guidance of $570 million – $600 million and capital expenditure guidance of $100 million – $125 million²

“Our Water Solutions segment continues to drive the growth of the Partnership and performed very well during the first quarter. Adjusted EBITDA for the segment grew significantly quarter over quarter with both produced water volumes processed and Adjusted EBITDA achieving expectations. Results in our Crude Oil Logistics and Liquids Logistics segments were impacted by increases in our inventories and timing of recognizing hedge gains (losses). We expect to see improved results going forward due to embedded, unrealized gains in our inventory, with the annual result being in line with the low end of our original expectations for the fiscal year,” stated Mike Krimbill, NGL’s CEO. “Overall, the Partnership is pleased with the outlook for the future as both the macroeconomic environment and our Water Solutions business continue to improve,” Krimbill concluded.

Quarterly Results of Operations

The following table summarizes operating income (loss) and Adjusted EBITDA from continuing operations by reportable segment for the periods indicated:

		Quarter Ended
		June 30, 2021										June 30, 2020
		Operating Income (Loss)					Adjusted EBITDA					Operating Income (Loss)					Adjusted EBITDA
		(in thousands)
Water Solutions		$	7,583				$	81,511				$	(16,047	)			$	56,926
Crude Oil Logistics		(11,581		)			13,148					23,320					30,854
Liquids Logistics		(53,409		)			5,574					4,562					12,232
Corporate and Other		(11,927		)			(9,132		)			(22,620		)			(9,030		)
Total		$	(69,334	)			$	91,101				$	(10,785	)			$	90,982

Water Solutions

The Partnership processed approximately 1.7 million barrels of water per day during the quarter ended June 30, 2021, a 22.0% increase when compared to approximately 1.4 million barrels of water per day processed during the quarter ended June 30, 2020, due to higher production volumes in the Delaware Basin driven by the recovery in crude oil prices from the prior year. Additionally, brackish non-potable water, resale of raw produced water and recycled water revenue all increased driven by the demand for these services.

Revenues from recovered crude oil, including the impact from realized skim oil hedges, totaled $16.0 million for the quarter ended June 30, 2021, an increase of $5.9 million from the prior year period. This increase was due to an increase in the number of wells completed in our area of operations during the current period and higher crude oil prices, as well as a strategic decision made by the Partnership to store the majority of its recovered barrels due to low prices during the quarter ended June 30, 2020.

Operating expenses in the Water Solutions segment decreased to $0.26 per barrel compared to $0.32 per barrel in the comparative quarter last year primarily due to significant steps taken to reduce operating costs per barrel along with higher produced water volumes processed. The Water Solutions segment continues to evaluate additional cost saving initiatives.

Crude Oil Logistics

Operating income for the first quarter of Fiscal 2022 decreased compared to the first quarter of Fiscal 2021 primarily due to an increase in net derivative losses on our inventory position as a result of increasing crude oil prices as well as lower activity and the reduction of minimum volume commitments on our Grand Mesa Pipeline. Revenues from third parties for Grand Mesa Pipeline decreased by $27.3 million, compared to the quarter ended June 30, 2020 due to lower third-party volumes transported on the pipeline. During the three months ended June 30, 2021, financial volumes on the Grand Mesa Pipeline averaged approximately 77,000 barrels per day, compared to approximately 119,000 barrels per day for the three months ended June 30, 2020.

Liquids Logistics

Operating loss for the Liquids Logistics segment totaled $53.4 million for the quarter ended June 30, 2021, including the $60.1 million loss on the sale of the Partnership’s membership interest in Sawtooth Caverns, LLC, which impacts comparability to the prior year period.

Total product margin per gallon, excluding the impact of derivatives, was $0.066 for the quarter ended June 30, 2021, compared to $0.024 for the quarter ended June 30, 2020. This increase in margin was primarily due to increased biodiesel and RIN prices and was offset by lower demand for other products. Refined products volumes decreased by approximately 26.7 million gallons, or 12.6%, during the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020 due to tighter supply and continued weakness in demand in certain parts of the country due to the COVID-19 pandemic. Propane volumes decreased by approximately 82.0 million gallons, or 32.5%, as warmer weather during the quarter and higher prices led to weaker demand. Butane volumes increased by approximately 3.0 million gallons, or 2.5%, when compared to the quarter ended June 30, 2020.

Corporate and Other

Corporate and Other expenses decreased from the comparable prior year period primarily due the $10.2 million net loss recorded for the uncollectible portion of a loan receivable with a third party in the prior year.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility) was approximately $303 million as of June 30, 2021. Borrowings on the Partnership’s revolving credit facility totaled $77 million, a $73 million increase to the March 31, 2021 balance. This increase was primarily due to increases in working capital balances as both inventory volumes and commodity prices increased.

The Partnership is in compliance with all of its debt covenants and has no significant debt maturities before November 2023. The Partnership still expects to generate excess cash flow in Fiscal Year 2022, which will be utilized to repay outstanding indebtedness and improve leverage.

First Quarter Conference Call Information

A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Monday, August 9, 2021. Analysts, investors, and other interested parties may access the conference call by pre-registering here and providing access code 5592767. An archived audio replay of the conference call will be available for 7 days beginning at 1:00 pm Central Time on August 10, 2021, which can be accessed by dialing (855) 859-2056 and providing access code 5592767.

Non-GAAP Financial Measures

NGL defines EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities, certain legal settlements and other. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to TransMontaigne Product Services, LLC (“TPSL”), our refined products business in the mid-continent region of the United States (“Mid-Con”) and our gas blending business in the southeastern and eastern regions of the United States (“Gas Blending”), which are included in discontinued operations, and certain refined products businesses within NGL’s Liquids Logistics segment, as discussed below. EBITDA and Adjusted EBITDA should not be considered as alternatives to net loss, loss from continuing operations before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP, as those items are used to measure operating performance, liquidity or the ability to service debt obligations. NGL believes that EBITDA provides additional information to investors for evaluating NGL’s ability to make quarterly distributions to NGL’s unitholders and is presented solely as a supplemental measure. NGL believes that Adjusted EBITDA provides additional information to investors for evaluating NGL’s financial performance without regard to NGL’s financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities.

Other than for certain businesses within NGL’s Liquids Logistics segment, for purposes of the Adjusted EBITDA calculation, NGL makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is open, NGL records changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, NGL reverses the previously recorded unrealized gain or loss and record a realized gain or loss. NGL does not draw such a distinction between realized and unrealized gains and losses on derivatives of certain businesses within NGL’s Liquids Logistics segment. The primary hedging strategy of these businesses is to hedge against the risk of declines in the value of inventory over the course of the contract cycle, and many of the hedges cover extended periods of time. The “inventory valuation adjustment” row in the reconciliation table reflects the difference between the market value of the inventory of these businesses at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. NGL includes this in Adjusted EBITDA because the unrealized gains and losses associated with derivative contracts associated with the inventory of this segment, which are intended primarily to hedge inventory holding risk and are included in net income, also affect Adjusted EBITDA. In NGL’s Crude Oil Logistics segment, they purchase certain crude oil barrels using the West Texas Intermediate (“WTI”) calendar month average (“CMA”) price and sell the crude oil barrels using the WTI CMA price plus the Argus CMA Differential Roll Component (“CMA Differential Roll”) per NGL’s contracts. To eliminate the volatility of the CMA Differential Roll, NGL entered into derivative instrument positions in January 2021 to secure a margin of approximately $0.20 per barrel on 1.5 million barrels per month from May 2021 through December 2023. Due to the nature of these positions, the cash flow and earnings recognized on a GAAP basis will differ from period to period depending on the current crude oil price and future estimated crude oil price which are valued utilizing third-party market quoted prices. NGL is recognizing in Adjusted EBITDA the gains and losses from the derivative instrument positions entered into in January 2021 to properly align with the physical margin NGL is hedging each month through the term of this transaction. This representation aligns with management’s evaluation of the transaction.

Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions and other. Maintenance capital expenditures represent capital expenditures necessary to maintain the Partnership’s operating capacity. For the CMA Differential Roll transaction, as discussed above, we have included an adjustment to Distributable Cash Flow to reflect, in the period for which they relate, the actual cash flows for the positions that settled that are not being recognized in Adjusted EBITDA. Distributable Cash Flow is a performance metric used by senior management to compare cash flows generated by the Partnership (excluding growth capital expenditures and prior to the establishment of any retained cash reserves by the Board of Directors) to the cash distributions expected to be paid to unitholders. Using this metric, management can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. This financial measure also is important to investors as an indicator of whether the Partnership is generating cash flow at a level that can sustain, or support an increase in, quarterly distribution rates. Actual distribution amounts are set by the Board of Directors.

Forward-Looking Statements

This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes such forward-looking statements are reasonable, NGL cannot assure they will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

NGL provides Adjusted EBITDA guidance that does not include certain charges and costs, which in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, such as income taxes, interest and other non-operating items, depreciation and amortization, net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities and items that are unusual in nature or infrequently occurring. The exclusion of these charges and costs in future periods will have a significant impact on the Partnership’s Adjusted EBITDA, and the Partnership is not able to provide a reconciliation of its Adjusted EBITDA guidance to net income (loss) without unreasonable efforts due to the uncertainty and variability of the nature and amount of these future charges and costs and the Partnership believes that such reconciliation, if possible, would imply a degree of precision that would be potentially confusing or misleading to investors.

About NGL Energy Partners LP

NGL Energy Partners LP, a Delaware limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process.

For further information, visit the Partnership’s website at www.nglenergypartners.com.

____________________

¹ See the “Non-GAAP Financial Measures” section of this release for the definition of Adjusted EBITDA and a discussion of this non-GAAP financial measure.

² See the “Forward-Looking Statements” section of this release for more information.

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (in Thousands, except unit amounts)
	June 30, 2021					March 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,471				$	4,829
Accounts receivable-trade, net of allowance for expected credit losses of $2,154 and $2,192, respectively	844,072					725,943
Accounts receivable-affiliates	8,775					9,435
Inventories	246,181					158,467
Prepaid expenses and other current assets	106,418					109,164
Total current assets	1,207,917					1,007,838
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $804,971 and $776,279, respectively	2,548,552					2,706,853
GOODWILL	744,439					744,439
INTANGIBLE ASSETS, net of accumulated amortization of $509,622 and $517,518, respectively	1,187,070					1,262,613
INVESTMENTS IN UNCONSOLIDATED ENTITIES	21,425					22,719
OPERATING LEASE RIGHT-OF-USE ASSETS	143,365					152,146
OTHER NONCURRENT ASSETS	54,722					50,733
Total assets	$	5,907,490				$	5,947,341
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	763,220				$	679,868
Accounts payable-affiliates	101					119
Accrued expenses and other payables	182,230					170,400
Advance payments received from customers	16,408					11,163
Current maturities of long-term debt	2,230					2,183
Operating lease obligations	45,864					47,070
Total current liabilities	1,010,053					910,803
LONG-TERM DEBT, net of debt issuance costs of $52,385 and $55,555, respectively, and current maturities	3,370,908					3,319,030
OPERATING LEASE OBLIGATIONS	96,910					103,637
OTHER NONCURRENT LIABILITIES	115,438					114,615
CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively	551,097					551,097
EQUITY:
General partner, representing a 0.1% interest, 129,724 and 129,724 notional units, respectively	(52,348		)			(52,189		)
Limited partners, representing a 99.9% interest, 129,593,939 and 129,593,939 common units issued and outstanding, respectively	448,963					582,784
Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively	305,468					305,468
Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively	42,891					42,891
Accumulated other comprehensive loss	(258		)			(266		)
Noncontrolling interests	18,368					69,471
Total equity	763,084					948,159
Total liabilities and equity	$	5,907,490				$	5,947,341

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (in Thousands, except unit and per unit amounts)
		Three Months Ended June 30,
		2021					2020
REVENUES:
Water Solutions		$	130,226				$	88,065
Crude Oil Logistics		553,624					276,039
Liquids Logistics		804,805					479,998
Other		—					313
Total Revenues		1,488,655					844,415
COST OF SALES:
Water Solutions		10,338					4,700
Crude Oil Logistics		537,257					217,557
Liquids Logistics		777,198					454,336
Other		—					454
Total Cost of Sales		1,324,793					677,047
OPERATING COSTS AND EXPENSES:
Operating		65,784					64,987
General and administrative		15,774					17,158
Depreciation and amortization		84,102					83,986
Loss on disposal or impairment of assets, net		67,536					12,022
Operating Loss		(69,334		)			(10,785		)
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities		212					289
Interest expense		(67,130		)			(43,961		)
Gain on early extinguishment of liabilities, net		51					19,355
Other income, net		1,249					1,035
Loss From Continuing Operations Before Income Taxes		(134,952		)			(34,067		)
INCOME TAX BENEFIT		450					301
Loss From Continuing Operations		(134,502		)			(33,766		)
Loss From Discontinued Operations, net of Tax		—					(1,486		)
Net Loss		(134,502		)			(35,252		)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(438		)			(51		)
NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP		$	(134,940	)			$	(35,303	)
NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	(159,332	)			$	(55,815	)
NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	—				$	(1,485	)
NET LOSS ALLOCATED TO COMMON UNITHOLDERS		$	(159,332	)			$	(57,300	)
BASIC LOSS PER COMMON UNIT
Loss From Continuing Operations		$	(1.23	)			$	(0.43	)
Loss From Discontinued Operations, net of Tax		$	—				$	(0.01	)
Net Loss		$	(1.23	)			$	(0.44	)
DILUTED LOSS PER COMMON UNIT
Loss From Continuing Operations		$	(1.23	)			$	(0.43	)
Loss From Discontinued Operations, net of Tax		$	—				$	(0.01	)
Net Loss		$	(1.23	)			$	(0.44	)
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING		129,593,939					128,771,715
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING		129,593,939					128,771,715

EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION (Unaudited) The following table reconciles NGL’s net loss to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow:
		Three Months Ended June 30,
		2021					2020
		(in thousands)
Net loss		$	(134,502	)			$	(35,252	)
Less: Net income attributable to noncontrolling interests		(438		)			(51		)
Net loss attributable to NGL Energy Partners LP		(134,940		)			(35,303		)
Interest expense		67,130					44,066
Income tax benefit		(450		)			(301		)
Depreciation and amortization		83,357					83,202
EBITDA		15,097					91,664
Net unrealized (gains) losses on derivatives		(16,264		)			26,671
CMA Differential Roll net losses (gains) (1)		24,310					—
Inventory valuation adjustment (2)		1,218					3,820
Lower of cost or net realizable value adjustments		(3,806		)			(32,003		)
Loss on disposal or impairment of assets, net		67,538					13,084
Gain on early extinguishment of liabilities, net		(87		)			(19,355		)
Equity-based compensation expense (3)		960					2,302
Acquisition expense (4)		67					157
Other (5)		2,068					4,348
Adjusted EBITDA		$	91,101				$	90,688
Adjusted EBITDA – Discontinued Operations (6)		$	—				$	(294	)
Adjusted EBITDA – Continuing Operations		$	91,101				$	90,982
Less: Cash interest expense (7)		63,359					40,399
Less: Income tax benefit		(450		)			(301		)
Less: Maintenance capital expenditures		7,745					9,168
Less: CMA Differential Roll (8)		23,932					—
Less: Preferred unit distributions paid		—					15,030
Distributable Cash Flow – Continuing Operations		$	(3,485	)			$	26,686

____________________

(1)		Adjustment to align, within Adjusted EBITDA, the net gains and losses of the Partnership’s CMA Differential Roll derivative instruments positions with the physical margin being hedged. See “Non-GAAP Financial Measures” section above for a further discussion.
(2)		Amount reflects the difference between the market value of the inventory at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. See “Non-GAAP Financial Measures” section above for a further discussion.
(3)		Equity-based compensation expense in the table above may differ from equity-based compensation expense reported in the footnotes to our unaudited condensed consolidated financial statements included in the Partnership’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. Amounts reported in the table above include expense accruals for bonuses expected to be paid in common units, whereas the amounts reported in the footnotes to our unaudited condensed consolidated financial statements only include expenses associated with equity-based awards that have been formally granted.
(4)		Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions.
(5)		Amounts for the three months ended June 30, 2021 and 2020 represent non-cash operating expenses related to our Grand Mesa Pipeline, unrealized losses on marketable securities and accretion expense for asset retirement obligations.
(6)		Amounts include the operations of TPSL, Gas Blending and Mid-Con.
(7)		Amounts represent interest expense payable in cash for the period presented, excluding changes in the accrued interest balance.
(8)		Amount represents the cash portion of the adjustments of the Partnership’s CMA Differential Roll derivative instrument positions, as discussed above, that settled during the period.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT
	Three Months Ended June 30, 2021
	Water Solutions					Crude Oil Logistics					Liquids Logistics					Corporate and Other					Consolidated
	(in thousands)
Operating income (loss)	$	7,583				$	(11,581	)			$	(53,409	)			$	(11,927	)			$	(69,334	)
Depreciation and amortization	62,981					12,409					6,967					1,745					84,102
Amortization recorded to cost of sales	—					—					73					—					73
Net unrealized losses (gains) on derivatives	3,566					(14,454		)			(5,376		)			—					(16,264		)
CMA Differential Roll net losses (gains)	—					24,310					—					—					24,310
Inventory valuation adjustment	—					—					1,218					—					1,218
Lower of cost or net realizable value adjustments	—					(11		)			(3,795		)			—					(3,806		)
Loss (gain) on disposal or impairment of assets, net	7,491					(42		)			60,087					—					67,536
Equity-based compensation expense	—					—					—					960					960
Acquisition expense	—					—					—					67					67
Other income, net	612					196					363					78					1,249
Adjusted EBITDA attributable to unconsolidated entities	459					—					(10		)			(55		)			394
Adjusted EBITDA attributable to noncontrolling interest	(954		)			—					(529		)			—					(1,483		)
Other	(227		)			2,321					(15		)			—					2,079
Adjusted EBITDA	$	81,511				$	13,148				$	5,574				$	(9,132	)			$	91,101

	Three Months Ended June 30, 2020
	Water Solutions					Crude Oil Logistics					Liquids Logistics					Corporate and Other					Continuing Operations					Discontinued Operations (TPSL, Mid-Con, Gas Blending)					Consolidated
	(in thousands)
Operating (loss) income	$	(16,047	)			$	23,320				$	4,562				$	(22,620	)			$	(10,785	)			$	—				$	(10,785	)
Depreciation and amortization	58,133					16,795					8,156					902					83,986					—					83,986
Amortization recorded to cost of sales	—					—					77					—					77					—					77
Net unrealized losses (gains) on derivatives	13,312					14,638					(1,279		)			—					26,671					—					26,671
Inventory valuation adjustment	—					—					3,840					—					3,840					—					3,840
Lower of cost or net realizable value adjustments	—					(29,060		)			(2,963		)			—					(32,023		)			—					(32,023		)
Loss on disposal or impairment of assets, net	329					1,450					4					10,239					12,022					—					12,022
Equity-based compensation expense	—					—					—					2,302					2,302					—					2,302
Acquisition expense	12					—					—					145					157					—					157
Other income, net	256					338					377					64					1,035					—					1,035
Adjusted EBITDA attributable to unconsolidated entities	465					—					(1		)			(62		)			402					—					402
Adjusted EBITDA attributable to noncontrolling interest	(487		)			—					(536		)			—					(1,023		)			—					(1,023		)
Intersegment transactions (1)	—					—					(27		)			—					(27		)			—					(27		)
Other	953					3,373					22					—					4,348					—					4,348
Discontinued operations	—					—					—					—					—					(294		)			(294		)
Adjusted EBITDA	$	56,926				$	30,854				$	12,232				$	(9,030	)			$	90,982				$	(294	)			$	90,688

____________________

(1) Amount reflects the transactions with TPSL, Mid-Con and Gas Blending that are eliminated in consolidation.

OPERATIONAL DATA (Unaudited)
	Three Months Ended
	June 30,
	2021			2020
	(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin	1,428,222			1,106,355
Eagle Ford Basin	91,843			95,375
DJ Basin	118,801			132,365
Other Basins	28,082			32,324
Total	1,666,948			1,366,419
Solids processed (barrels per day)	1,316			1,899
Skim oil sold (barrels per day)	2,500			687
Crude Oil Logistics:
Crude oil sold (barrels)	7,994			9,292
Crude oil transported on owned pipelines (barrels)	7,034			10,476
Crude oil storage capacity – owned and leased (barrels) (1)	5,239			5,239
Crude oil inventory (barrels) (1)	1,147			1,622
Liquids Logistics:
Refined products sold (gallons)	185,306			211,974
Propane sold (gallons)	170,279			252,289
Butane sold (gallons)	122,574			119,566
Other products sold (gallons)	92,853			114,222
Natural gas liquids and refined products storage capacity – owned and leased (gallons) (1)	168,677			399,251
Refined products inventory (gallons) (1)	2,776			2,656
Propane inventory (gallons) (1)	60,673			77,968
Butane inventory (gallons) (1)	45,911			73,291
Other products inventory (gallons) (1)	40,691			31,583

____________________

(1)

Information is presented as of June 30, 2021 and June 30, 2020, respectively.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005799/en/

NGL Energy Partners LP

Trey Karlovich, 918-481-1119

Chief Financial Officer and Executive Vice President

[email protected]

or

Linda Bridges, 918-481-1119

Senior Vice President – Finance and Treasurer

[email protected]

KEYWORDS: United States North America Oklahoma

INDUSTRY KEYWORDS: Energy Transport Logistics/Supply Chain Management Oil/Gas

MEDIA:

Logo

Masonite International Corporation Expands Share Repurchase Authorization to $250 Million

TAMPA, Fla.–(BUSINESS WIRE)–
Masonite International Corporation (NYSE: DOOR) announced today that its Board of Directors approved a new share repurchase program allowing the Company to repurchase up to $250 million of its outstanding common shares, inclusive of approximately $40 million which currently remains available under the existing share repurchase authorization approved in May 2018.

Any repurchases under the new and existing program will be made in the open market, in privately negotiated transactions or otherwise, subject to market conditions, applicable legal requirements, and other relevant factors. The share repurchase programs do not obligate the Company to acquire any particular number of common shares, and it may be suspended or terminated at any time at the Company’s discretion. The timing of the repurchases and the actual amount repurchased will be determined by the Company based on its evaluation of a variety of factors, including the market price of the Company’s common shares, general market and economic conditions, and other factors. Repurchases under the share repurchase program are permitted to be made under one or more Rule 10b5-1 plans, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under applicable insider trading laws.

“Our Board of Directors and management view Masonite’s shares as an attractive investment opportunity,” said Howard Heckes, President and Chief Executive Officer. “We believe that investing to support the growth expectations set forth in the Company’s 2025 Centennial Plan, in combination with opportunistic share repurchases, will provide enhanced long-term returns to shareholders.”

About Masonite

Masonite International Corporation is a leading global designer, manufacturer, marketer and distributor of interior and exterior doors for the new construction and repair, renovation and remodeling sectors of the residential and non-residential building construction markets. Since 1925, Masonite has provided its customers with innovative products and superior service at compelling values. Masonite currently serves approximately 7,600 customers in 60 countries. Additional information about Masonite can be found at www.masonite.com.

Forward-looking Statements

This press release contains forward-looking information and other forward-looking statements within the meaning of applicable Canadian and/or U.S. securities laws, including our discussion of our additional share repurchase program, our 2025 Centennial Plan and the effects of our strategic initiatives. When used in this press release, such forward-looking statements may be identified by the use of such words as “may,” “might,” “could,” “will,” “would,” “should,” “expect,” “believes,” “outlook,” “predict,” “forecast,” “objective,” “remain,” “anticipate,” “estimate,” “potential,” “continue,” “plan,” “project,” “targeting,” or the negative of these terms or other similar terminology.

Forward-looking statements involve significant known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Masonite, or industry results, to be materially different from any future plans, goals, targets, objectives, results, performance or achievements expressed or implied by such forward-looking statements. As a result, such forward-looking statements should not be read as guarantees of future performance or results, should not be unduly relied upon, and will not necessarily be accurate indications of whether or not such results will be achieved. Factors that could cause actual results to differ materially from the results discussed in the forward-looking statements include, but are not limited to, downward trends in our end markets and in economic conditions; reduced levels of residential new construction; residential repair, renovation and remodeling; and non-residential building construction activity due to increases in mortgage rates, changes in mortgage interest deductions and related tax changes and reduced availability of financing; competition; the continued success of, and our ability to maintain relationships with, certain key customers in light of customer concentration and consolidation; our ability to accurately anticipate demand for our products including seasonality; scale and scope of the coronavirus (“COVID-19”) pandemic and its impact on our operations, customer demand and supply chain; increases in prices of raw materials and fuel; tariffs and evolving trade policy and friction between the United States and other countries, including China, and the impact of anti-dumping and countervailing duties; increases in labor costs, the availability of labor, or labor relations (i.e., disruptions, strikes or work stoppages); our ability to manage our operations including potential disruptions, manufacturing realignments (including related restructuring charges) and customer credit risk; product liability claims and product recalls; our ability to generate sufficient cash flows to fund our capital expenditure requirements, to meet our pension obligations and to meet our debt service obligations, including our obligations under our senior notes and our asset-based revolving credit facility (ABL Facility); limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes and our ABL Facility; fluctuating foreign exchange and interest rates; our ability to replace expiring patents and to innovate, keep pace with technological developments and successfully integrate acquisitions; the continuous operation of our information technology and enterprise resource planning systems and management of potential cyber security threats and attacks; political, economic and other risks that arise from operating a multinational business; uncertainty relating to the United Kingdom’s exit from the European Union; retention of key management personnel; and environmental and other government regulations, including the United States Foreign Corrupt Practices Act (“FCPA”), and any changes in such regulations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005583/en/

Richard Leland

VP, FINANCE AND TREASURER

[email protected]

813.739.1808

Farand Pawlak, CPA

DIRECTOR, INVESTOR RELATIONS

[email protected]

813.371.5839

KEYWORDS: United States North America Florida

INDUSTRY KEYWORDS: Construction & Property Other Manufacturing Building Systems Manufacturing

MEDIA:

Posted on August 9, 2021 6:58 pm

Planet Fitness, Inc. Announces Second Quarter 2021 Results

Adds 700,000 net new members since end of first quarter, marking six consecutive months of net member growth

Ends second quarter with total membership of more than 14.8 million and over 98% of stores open globally

PR Newswire

HAMPTON, N.H., Aug. 9, 2021 /PRNewswire/ — Today, Planet Fitness, Inc. (NYSE:PLNT) reported financial results for its second quarter ended June 30, 2021.

“Our membership momentum continues to defy our historical seasonal patterns, and, as of the end of July we had more than 15 million members. It’s a testament to the strength of our brand that more than 13 million people remained members of Planet Fitness in the depths of the global pandemic when most of our gyms were temporarily closed. And today, with nearly all of our stores reopened, existing members are re-engaging with us, and net membership is continuing to climb as people realize the importance of fitness to their overall wellness,” said Chris Rondeau, Chief Executive Officer. “There is a dislocation in the fitness industry with approximately 22 percent of U.S. gyms permanently closed due to the impact from COVID-19 through the end of the second quarter, while, at the same time, more Americans are realizing that fitness is essential to physical, mental, and emotional well-being. We believe Planet Fitness is the place that fills that gap with our affordable, non-intimidating workout environment, and, as a result, we are confident in achieving and possibly exceeding our long-term target of 4,000 locations in the U.S.”

Second Quarter Fiscal 2021 results

• Total revenue increased from the prior year period by 241.1% to $137.3 million.
• Net income attributable to Planet Fitness, Inc. was $14.0 million, or $0.17 per diluted share, compared to a loss of $29.2 million, or $0.36 per diluted share in the prior year period.
• Net income increased $47.0 million to $15.0 million, compared to a net loss of $32.0 million in the prior year period.
• Adjusted net income⁽¹⁾ increased $46.1 million to $18.2 million, or $0.21 per diluted share, compared to an Adjusted net loss of $27.9 million, or $0.32 per diluted share in the prior year period.
• Adjusted EBITDA⁽¹⁾ increased $64.8 million to $55.6 million from a loss of $9.3 million in the prior year period.
• 24 new Planet Fitness stores were opened during the period, bringing system-wide total stores to 2,170 as of June 30, 2021.
• Cash of $527.4 million as of June 30, 2021, which includes cash and cash equivalents of $469.1 million and restricted cash of $58.2 million.

⁽¹⁾ Adjusted net income (loss) and Adjusted EBITDA are non-GAAP measures. For reconciliations of Adjusted EBITDA and Adjusted net income (loss) to U.S. GAAP (“GAAP”) net income (loss) see “Non-GAAP Financial Measures” accompanying this press release.

Operating Results for the Second Quarter Ended June 30, 2021

For the second quarter 2021, total revenue increased $97.0 million or 241.1% to $137.3 million from $40.2 million in the prior year period.  By segment:

• Franchise segment revenue increased $51.8 million or 246.9% to $72.8 million from $21.0 million in the prior year period. The increase in franchise segment revenue for the second quarter 2021 is primarily due to a $37.7 million increase in franchise royalty revenue, an $8.3 million increase in NAF revenue, and a $5.0 million increase in franchise and other fees, primarily attributable to temporary store closures as a result of COVID-19 in the prior year period;
• Corporate-owned stores segment revenue increased $31.2 million or 330.8% to $40.6 million from $9.4 million in the prior year period. The increase was primarily due to temporary store closures as a result of COVID-19 in the prior year period, as well as the opening of seven new corporate-owned stores since April 1, 2020; and
• Equipment segment revenue increased $14.0 million or 142.8% to $23.8 million from $9.8 million in the prior year period, driven by higher equipment sales to new and existing franchisee-owned stores in the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to temporary store closures as a result of COVID-19 in the prior year period.

For the second quarter of 2021, net income attributable to Planet Fitness, Inc. was $14.0 million, or $0.17 per diluted share, compared to a net loss attributable to Planet Fitness, Inc. of $29.2 million, or $0.36 per diluted share in the prior year period. Net income was $15.0 million in the second quarter of 2021 compared to a net loss of $32.0 million in the prior year period. Adjusted net income increased $46.1 million to $18.2 million, or $0.21 per diluted share, from an Adjusted net loss of $27.9 million, or $0.32 per diluted share in the prior year period. Adjusted net income (loss) has been adjusted to reflect a normalized federal income tax rate of 26.6% and 26.8% for the current and prior year period, respectively, and excludes certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance (see “Non-GAAP Financial Measures”).

Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization, adjusted for the impact of certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance (see “Non-GAAP Financial Measures”), increased $64.8 million to $55.6 million from a loss of $9.3 million in the prior year period.

Segment EBITDA represents our Total Segment EBITDA broken down by the Company’s reportable segments. Total Segment EBITDA is equal to EBITDA, which is defined as net income before interest, taxes, depreciation and amortization (see “Non-GAAP Financial Measures”).

• Franchise segment EBITDA increased $48.2 million to $51.8 million. The increase in franchise segment EBITDA for the second quarter 2021 was a result of higher royalty and national advertising fund collections in the three months ended June 30, 2021 consisting of a $37.7 million increase in franchise royalty revenue, a $8.3 million increase in NAF revenue, and a $5.0 million increase in franchise and other fees, primarily attributable to temporary store closures as a result of COVID-19 in the prior year period;
• Corporate-owned stores segment EBITDA increased $16.7 million to $10.4 million. The increase was primarily due to temporary store closures as a result of COVID-19 in the prior year period, as well as the opening of seven new corporate-owned stores since April 1, 2020; and
• Equipment segment EBITDA increased by $4.3 million to $5.6 million driven by higher equipment sales to new and existing franchisee-owned stores in the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to temporary store closures as a result of COVID-19 in the prior year period.

2021 Outlook

For the year ending December 31, 2021, the Company expects the following, assuming there is no significant worsening of the COVID-19 pandemic that seriously impacts performance, including prolonged store closures or other mandated operational restrictions:

• To be at the high-end of its 75 to 100 new store opening range
• Full-year revenue will be between $530 million and $540 million
• Selling, General & Administrative expenses will be in the low $90 million dollar range
• Adjusted EBITDA will be between $200 million and $210 million
• Adjusted net income per share, diluted, will be between $0.65 and $0.70

Presentation of Financial Measures

Planet Fitness, Inc. (the “Company”) was formed in March 2015 for the purpose of facilitating the initial public offering (the “IPO”) and related recapitalization transactions that occurred in August 2015, and in order to carry on the business of Pla-Fit Holdings, LLC (“Pla-Fit Holdings”) and its subsidiaries. As the sole managing member of Pla-Fit Holdings, the Company operates and controls all of the business and affairs of Pla-Fit Holdings, and through Pla-Fit Holdings, conducts its business. As a result, the Company consolidates Pla-Fit Holdings’ financial results and reports a non-controlling interest related to the portion of Pla-Fit Holdings not owned by the Company.

The financial information presented in this press release includes non-GAAP financial measures such as EBITDA, Segment EBITDA, Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, diluted, to provide measures that we believe are useful to investors in evaluating the Company’s performance. These non-GAAP financial measures are supplemental measures of the Company’s performance that are neither required by, nor presented in accordance with GAAP. These financial measures should not be considered in isolation or as substitutes for GAAP financial measures such as net  income or any other performance measures derived in accordance with GAAP. In addition, in the future, the Company may incur expenses or charges such as those added back to calculate Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, diluted. The Company’s presentation of Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, diluted, should not be construed as an inference that the Company’s future results will be unaffected by similar amounts or other unusual or nonrecurring items. See the tables at the end of this press release for a reconciliation of EBITDA, Adjusted EBITDA, Total Segment EBITDA, Adjusted net income (loss), and Adjusted net income (loss) per share, diluted, to their most directly comparable GAAP financial measure.

Same store sales refers to year-over-year sales comparisons for the same store sales base of both corporate-owned and franchisee-owned stores, which is calculated for a given period by including only sales from stores that had sales in the comparable months of both years. We define the same store sales base to include those stores that have been open and for which monthly membership dues have been billed for longer than 12 months. We measure same store sales based solely upon monthly dues billed to members of our corporate-owned and franchisee-owned stores. As a result of the closure of all of our stores due to COVID-19 in March 2020, a majority of stores remained closed for a portion of the three and six months ended June 30, 2020. Because less than 50% of our stores in the same store sales base had membership billings in all of the months included in the three and six months ended June 30, 2020, we are not providing same store sales comparisons for the three and six months ended June 30, 2021 and 2020.

The non-GAAP financial measures used in our full-year outlook will differ from net income (loss) and net income (loss) per share, diluted, determined in accordance with GAAP in ways similar to those described in the reconciliations at the end of this press release. We do not provide guidance for net income (loss) or net income (loss) per share, diluted, determined in accordance with GAAP or a reconciliation of guidance for Adjusted EBITDA and Adjusted net income per share, diluted, to the most directly comparable GAAP measure because we are not able to predict with reasonable certainty the amount or nature of all items that will be included in our net income and net income per share, diluted, for the year ending December 31, 2021. These items are uncertain, depend on many factors and could have a material impact on our net income and net income per share, diluted, for the year ending December 31, 2021.

Investor Conference Call

The Company will hold a conference call at 4:30 pm (ET) on August 9, 2021 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.planetfitness.com via the “Investor Relations” link. The webcast will be archived on the website for one year.

About Planet Fitness

Founded in 1992 in Dover, NH, Planet Fitness is one of the largest and fastest-growing franchisors and operators of fitness centers in the United States by number of members and locations. As of June 30, 2021, Planet Fitness had more than 14.8 million members and 2,170 stores in 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia. The Company’s mission is to enhance people’s lives by providing a high-quality fitness experience in a welcoming, non-intimidating environment, which we call the Judgement Free Zone®. More than 95% of Planet Fitness stores are owned and operated by independent business men and women.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties.  Forward-looking statements include the Company’s statements with respect to expected future performance presented under the heading “2021 Outlook,” those attributed to the Company’s Chief Executive Officer in this press release, including with respect to the Company’s long-term targets for U.S. store locations, and other statements, estimates and projections that do not relate solely to historical facts. Forward-looking statements can be identified by words such as “believe,” “expect,” “goal,” plan,” “will,” “prospects,” “future,” “strategy” and similar references to future periods, although not all forward-looking statements include these identifying words.  Forward-looking statements are not assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of the business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results to differ materially include risks and uncertainties associated with the duration and impact of COVID-19, which has resulted and may continue to result in store closures and a decrease in our net membership base and may give rise to or heighten one or more of the other risks and uncertainties described herein, competition in the fitness industry, the Company’s and franchisees’ ability to attract and retain members, the Company’s and franchisees’ ability to identify and secure suitable sites for new franchise stores, changes in consumer demand, changes in equipment costs, the Company’s ability to expand into new markets domestically and internationally, operating costs for the Company and franchisees generally, availability and cost of capital for franchisees, acquisition activity, developments and changes in laws and regulations, our substantial increased indebtedness as a result of our refinancing and securitization transactions and our ability to incur additional indebtedness or refinance that indebtedness in the future, our future financial performance and our ability to pay principal and interest on our indebtedness, our corporate structure and tax receivable agreements, failures, interruptions or security breaches of the Company’s information systems or technology, general economic conditions and the other factors described in the Company’s annual report on Form 10-K for the year ended December 31, 2020, and the Company’s other filings with the Securities and Exchange Commission. In light of the significant risks and uncertainties inherent in forward-looking statements, investors should not place undue reliance on forward-looking statements, which reflect the Company’s views only as of the date of this press release. Except as required by law, neither the Company nor any of its affiliates or representatives undertake any obligation to provide additional information or to correct or update any information set forth in this release, whether as a result of new information, future developments or otherwise.

 

Planet Fitness, Inc. and subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except per share amounts)
		For the three months ended June 30,								For the six months ended June 30,
		2021				2020				2021				2020
Revenue:
Franchise		$	59,758			$	16,214			$	111,938			$	65,125
Commission income		70				45				342				435
National advertising fund revenue		13,021				4,743				24,630				13,971
Corporate-owned stores		40,579				9,419				78,456				49,935
Equipment		23,823				9,813				33,762				37,998
Total revenue		137,251				40,234				249,128				167,464
Operating costs and expenses:
Cost of revenue		18,497				8,478				26,482				30,323
Store operations		28,430				14,681				54,337				40,838
Selling, general and administrative		21,789				15,896				44,279				32,848
National advertising fund expense		13,529				10,878				26,282				26,083
Depreciation and amortization		15,036				13,008				30,510				25,800
Other (gain) loss		(282)				15				(2,420)				26
Total operating costs and expenses		96,999				62,956				179,470				155,918
Income (loss) from operations		40,252				(22,722)				69,658				11,546
Other expense, net:
Interest income		195				359				412				2,286
Interest expense		(20,125)				(20,467)				(40,369)				(40,708)
Other income (expense)		(147)				(73)				18				(760)
Total other expense, net		(20,077)				(20,181)				(39,939)				(39,182)
Income (loss) before income taxes		20,175				(42,903)				29,719				(27,636)
Provision (benefit) for income taxes		5,159				(10,918)				8,513				(6,034)
Net income (loss)		15,016				(31,985)				21,206				(21,602)
Less net income (loss) attributable to non-controlling interests		1,006				(2,808)				1,615				(1,032)
Net income (loss) attributable to Planet Fitness, Inc.		$	14,010			$	(29,177)			$	19,591			$	(20,570)
Net income (loss) per share of Class A common stock:
Basic		$	0.17			$	(0.36)			$	0.24			$	(0.26)
Diluted		$	0.17			$	(0.36)			$	0.23			$	(0.26)
Weighted-average shares of Class A common stock outstanding:
Basic		83,223				79,966				83,154				79,532
Diluted		83,837				79,966				83,771				79,532