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8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - JP Energy Partners LPa15-11400_18k.htm

Exhibit 99.1

 

GRAPHIC

 

JP Energy Partners LP Announces First Quarter 2015 Financial Results

 

IRVING, Texas, May 12, 2015 — JP Energy Partners LP (NYSE: JPEP) (“JP Energy”, “we,” “our,” or “us”) today announced first quarter 2015 financial and operating results.

 

JP Energy reported Adjusted EBITDA of $15.2 million for the first quarter of 2015, compared to $8.5 million for the first quarter of 2014 and reported net income of $0.7 million for the first quarter of 2015, compared to a net loss of $8.6 million for the first quarter of 2014. Distributable Cash Flow was $13.3 million for the first quarter of 2015, resulting in a distribution coverage ratio for the quarter of 1.11x.

 

“We had a great first quarter and we are on track to meet our full year guidance,” said J. Patrick Barley, Executive Chairman and Chief Executive Officer of JP Energy.  “Our first quarter performance demonstrated the diversity of our operating platform as our NGL business benefited from the lower commodity price environment and even though rig counts fell significantly across all of the major shale plays due to lower crude prices, we still experienced increased volumes through our crude oil gathering platform.  In addition, we also announced three expansions in the first four months of this year; two organic opportunities to expand and improve our Silver Dollar pipeline and an accretive acquisition in the NGL segment. We will continue to execute our business strategy and we look forward to building on the success of the first quarter.”

 

Review of Segment Performance

 

NGL Distribution and Sales — Adjusted EBITDA for the NGL Distribution and Sales segment was $12.1 million for the first quarter of 2015, compared to $5.3 million for the first quarter of 2014.  The increase was primarily due to a $6.9 million increase in adjusted gross margin as a result of an increase in sales volumes from the expansion of our customer base as well as an increase in the average sales margin of NGL and refined products from more favorable market conditions.

 

Crude Oil Pipelines and Storage — Adjusted EBITDA for the Crude Oil Pipelines and Storage segment was $5.5 million for the first quarter of 2015, compared to $5.0 million for the first quarter of 2014.  The increase was primarily due to a $0.6 million increase in adjusted gross margin as a result of significantly increased volumes from the expansion of the Silver Dollar Pipeline System in the fourth quarter of 2014.

 

Crude Oil Supply and Logistics — Adjusted EBITDA for the Crude Oil Supply and Logistics segment was $2.0 million for the first quarter of 2015, compared to $0.7 million for the first quarter of 2014.  The increase was primarily due to a $1.9 million increase in adjusted gross margin in the Permian Basin related to the expansion of the Silver Dollar Pipeline System in the fourth quarter of 2014.  This was partially offset by higher operating expenses and lower margin per barrel due to the competitive environment.

 

Refined Products Terminals and Storage — Adjusted EBITDA for the Refined Products Terminals and Storage segment was $2.8 million for the first quarter of 2015, compared to $4.9 million for the first quarter of 2014.  The decrease was primarily due to a $2.2 million decrease in adjusted gross margin from lower volumes and realized prices for refined products sold.

 

Cash Distributions

 

On April 28, 2015, JP Energy announced that it would pay on May 14, 2015, to unitholders of record on May 7, 2015, a cash distribution of $0.3250 per common and subordinated unit for the three month period ended March 31, 2015.

 

Earnings Conference Call Information

 

We will hold a conference call on Wednesday, May 13, 2015, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss our first quarter 2015 financial results. The call can be accessed live over the telephone by dialing (877) 407-0784, or for international callers, (201) 689-8560.  A replay will be available shortly after the call and can be accessed by dialing (877) 870-5176, or for international callers (858) 384-5517. The passcode for the replay is 13607518. The replay of the conference call will be available for approximately two weeks following the call.

 



 

Interested parties may also listen to a simultaneous webcast of the call on our website at www.jpenergypartners.com under the “Investors” section. A replay of the webcast will also be available for approximately two weeks following the call.

 

About JP Energy Partners LP

 

JP Energy Partners LP (JPEP) is a publicly traded, growth-oriented limited partnership that owns, operates, develops and acquires a diversified portfolio of midstream energy assets. Our operations currently consist of: (i) crude oil pipelines and storage; (ii) crude oil supply and logistics; (iii) refined products terminals and storage; and (iv) NGL distribution and sales, which together provide midstream infrastructure solutions for the growing supply of crude oil, refined products and NGLs in the United States. To learn more, please visit our website at www.jpenergypartners.com.

 

Use of Non-GAAP Financial Measures

 

Adjusted EBITDA, distributable cash flow and adjusted gross margin are supplemental, non-GAAP financial measures used by management and by external users of our financial statements, such as investors and commercial banks, to assess:

 

·                  our operating performance as compared to those of other companies in the midstream sector, without regard to financing methods, historical cost basis or capital structure;

 

·                  the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;

 

·                  our ability to incur and service debt and fund capital expenditures; and

 

·                  the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

 

We believe that the presentation of Adjusted EBITDA, distributable cash flow and adjusted gross margin provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA and distributable cash flow are net income (loss) and cash flow from operating activities, respectively, and the GAAP measure most directly comparable to adjusted gross margin is operating income (loss). These non-GAAP measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures exclude some, but not all, items that affect the most directly comparable GAAP financial measure. Because Adjusted EBITDA, distributable cash flow and adjusted gross margin may be defined differently by other companies in the our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

 

We define Adjusted EBITDA as net income (loss) plus (minus) interest expense (income), income tax expense (benefit), depreciation and amortization expense, asset impairments, (gains) losses on asset sales, certain non-cash charges such as non-cash equity compensation, non-cash vacation expense, non-cash (gains) losses on commodity derivative contracts (total (gain) loss on commodity derivatives less net cash flow associated with commodity derivatives settled during the period) and selected (gains) charges and transaction costs that are unusual or non-recurring. We define distributable cash flow as Adjusted EBITDA less net cash interest paid, income taxes paid and maintenance capital expenditures. We define adjusted gross margin as total revenues minus cost of sales, excluding depreciation and amortization, and certain non-cash charges such as non-cash vacation expense and non-cash gains (losses) on derivative contracts (total gain (losses) on commodity derivatives less net cash flow associated with commodity derivatives settled during the period).

 

Forward-Looking Statements

 

Disclosures in this press release contain “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature.  These forward-looking statements are based on our current expectations and beliefs concerning

 

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future developments and their potential effect on us.  While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.  All comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions.  Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to the price of, and the demand for, crude oil, refined products and NGLs in the markets we serve; the volumes of crude oil that we gather, transport and store, the throughput volumes at our refined products terminals and our NGL sales volumes; the fees we receive for the crude oil, refined products and NGL volumes we handle; pressures from our competitors, some of which may have significantly greater resources than us; the cost of propane that we buy for resale, including due to disruptions in its supply, and whether we are able to pass along cost increases to our customers; competitive pressures from other energy sources such as natural gas, which could reduce existing demand for propane; the risk of contract cancellation, non-renewal or failure to perform by our customers, and our inability to replace such contracts and/or customers; leaks or releases of hydrocarbons into the environment that result in significant costs and liabilities; the level of our operating, maintenance and general and administrative expenses; regulatory action affecting our existing contracts, our operating costs or our operating flexibility; failure to secure or maintain contracts with our largest customers, or non-performance of any of those customers under the applicable contract; competitive conditions in our industry; changes in the long-term supply of and demand for oil and natural gas; volatility of fuel prices; actions taken by our customers, competitors and third-party operators; our ability to complete growth projects on time and on budget; inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change; environmental hazards; industrial accidents; changes in laws and regulations (or the interpretation thereof) related to the transportation, storage or terminaling of crude oil and refined products or the distribution and sales of NGLs; fires, explosions or other accidents; the effects of future litigation; and other factors discussed from time to time in each of our documents and reports filed with the Securities and Exchange Commission. Any forward-looking statement applies only as of the date on which such statement is made and we do not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

 

Contacts:

Investor Relations, 866-912-3714

investorrelations@jpep.com

 

Source: JP Energy Partners LP

 

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JP ENERGY PARTNERS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

March 31,

 

December 31,

 

 

 

2015

 

2014

 

 

 

(in thousands, except unit data)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

2,152

 

$

3,325

 

Restricted cash

 

600

 

600

 

Accounts receivable, net

 

84,915

 

108,725

 

Receivables from related parties

 

8,497

 

10,548

 

Inventory

 

30,938

 

20,826

 

Prepaid expenses and other current assets

 

11,659

 

4,915

 

Total Current Assets

 

138,761

 

148,939

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment, net

 

272,645

 

262,148

 

Goodwill

 

248,721

 

248,721

 

Intangible assets, net

 

143,979

 

148,311

 

Deferred financing costs and other assets, net

 

4,848

 

5,054

 

Total Non-Current Assets

 

670,193

 

664,234

 

Total Assets

 

$

808,954

 

$

813,173

 

 

 

 

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

73,468

 

$

88,052

 

Accrued liabilities

 

24,773

 

28,971

 

Capital leases and short-term debt

 

305

 

229

 

Customer deposits and advances

 

2,255

 

5,050

 

Current portion of long-term debt

 

386

 

383

 

Total Current Liabilities

 

101,187

 

122,685

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Long-term debt

 

110,995

 

84,125

 

Other long-term liabilities

 

4,868

 

5,683

 

Total Liabilities

 

217,050

 

212,493

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

Partners’ capital

 

 

 

 

 

General partner interest

 

1,350

 

 

Common units (21,852,219 units authorized; 18,198,894 and 18,209,519 units issued and outstanding as of March 31, 2015 and December 31, 2014, respectively)

 

310,488

 

315,630

 

Subordinated units (18,197,249 units authorized; 18,153,897 and 18,197,249 units issued and outstanding as of March 31, 2015 and December 31, 2014, respectively)

 

280,066

 

285,050

 

Total Partners’ Capital

 

591,904

 

600,680

 

Total Liabilities and Partners’ Capital

 

$

808,954

 

$

813,173

 

 

4



 

JP ENERGY PARTNERS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2015

 

2014

 

 

 

(in thousands, except unit and per unit data)

 

REVENUES:

 

 

 

 

 

Crude oil sales

 

$

231,917

 

$

341,005

 

Gathering, transportation and storage fees

 

6,951

 

8,096

 

NGL and refined product sales

 

54,185

 

63,801

 

Refined products terminals and storage fees

 

3,108

 

2,663

 

Other revenues

 

3,125

 

3,102

 

Total revenues

 

299,286

 

418,667

 

 

 

 

 

 

 

COSTS AND EXPENSES:

 

 

 

 

 

Cost of sales, excluding depreciation and amortization

 

254,890

 

382,889

 

Operating expense

 

16,611

 

16,153

 

General and administrative

 

14,475

 

12,633

 

Depreciation and amortization

 

11,339

 

10,094

 

Loss on disposal of assets, net

 

130

 

356

 

Total costs and expenses

 

297,445

 

422,125

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

1,841

 

(3,458

)

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

Interest expense

 

(1,173

)

(3,259

)

Loss on extinguishment of debt

 

 

(1,634

)

Other income, net

 

19

 

111

 

 

 

 

 

 

 

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

687

 

(8,240

)

 

 

 

 

 

 

Income tax (expense) benefit

 

(22

)

57

 

 

 

 

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

665

 

(8,183

)

 

 

 

 

 

 

DISCONTINUED OPERATIONS

 

 

 

 

 

Net loss from discontinued operations

 

 

(405

)

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

665

 

$

(8,588

)

 

 

 

 

 

 

Basic and diluted loss per unit

 

 

 

 

 

Net income allocated to common units

 

$

342

 

 

 

Weighted average number of common units outstanding - basic

 

18,206,669

 

 

 

Weighted average number of common units outstanding - diluted

 

18,224,336

 

 

 

Basic and diluted income per common unit

 

$

0.02

 

 

 

 

 

 

 

 

 

Net income allocated to subordinated units

 

$

323

 

 

 

Weighted average number of subordinated units outstanding - basic and diluted

 

18,185,621

 

 

 

Basic and diluted income per subordinated unit

 

$

0.02

 

 

 

 

 

 

 

 

 

Distribution declared per common and subordinated unit

 

$

0.325

 

 

 

 

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JP ENERGY PARTNERS LP

NON-GAAP RECONCILIATIONS

(Unaudited)

 

 

 

Three months ended March 31,

 

 

 

2015

 

2014

 

 

 

(in thousands)

 

Segment Adjusted EBITDA

 

 

 

 

 

Crude oil pipelines and storage

 

$

5,476

 

$

4,968

 

Crude oil supply and logistics

 

1,982

 

695

 

Refined products terminals and storage

 

2,822

 

4,853

 

NGLs distribution and sales

 

12,098

 

5,252

 

Discontinued operations

 

 

79

 

Corporate and other

 

(7,189

)

(7,349

)

Total Adjusted EBITDA

 

15,189

 

8,498

 

Depreciation and amortization

 

(11,339

)

(10,094

)

Interest expense

 

(1,173

)

(3,259

)

Loss on extinguishment of debt

 

 

(1,634

)

Income tax (expense) benefit

 

(22

)

57

 

Loss on disposal of assets, net

 

(130

)

(356

)

Unit-based compensation

 

(431

)

(282

)

Total gain on commodity derivatives

 

771

 

135

 

Net cash (receipts) payments for commodity derivatives settled during the period

 

3,192

 

(633

)

Non-cash inventory costing adjustment

 

(2,915

)

 

Transaction costs and other

 

(2,477

)

(536

)

Discontinued operations

 

 

(484

)

Net income (loss)

 

$

665

 

$

(8,588

)

 

 

 

Three months ended March 31,

 

 

 

2015

 

2014

 

 

 

(in thousands)

 

Segment Adjusted gross margin

 

 

 

 

 

Crude oil pipelines and storage

 

$

6,667

 

$

6,096

 

Crude oil supply and logistics

 

4,992

 

3,070

 

Refined products terminals and storage

 

3,632

 

5,862

 

NGL distribution and sales

 

28,358

 

21,443

 

Total Adjusted gross margin

 

43,649

 

36,471

 

Operating expenses

 

(16,611

)

(16,153

)

General and administrative

 

(14,475

)

(12,633

)

Depreciation and amortization

 

(11,339

)

(10,094

)

Loss on disposal of assets, net

 

(130

)

(356

)

Total gain on commodity derivatives

 

771

 

135

 

Net cash (receipts) payments for commodity derivatives settled during the period

 

3,192

 

(633

)

Non-cash inventory costing adjustment

 

(2,915

)

 

Other

 

(301

)

(195

)

Operating income (loss)

 

$

1,841

 

$

(3,458

)

 

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JP ENERGY PARTNERS

NON-GAAP RECONCILIATION (CONTINUED)

(Unaudited)

 

 

 

Three
months ended
March 31,
2015

 

 

 

(in thousands)

 

Net cash provided by operating activities

 

$

3,440

 

Depreciation and amortization

 

(11,339

)

Derivative valuation changes

 

4,008

 

Amortization of deferred financing costs

 

(227

)

Unit-based compensation

 

(431

)

Loss on disposal of assets

 

(130

)

Bad debt expense

 

(467

)

Other non-cash items

 

(71

)

Changes in assets and liabilities

 

5,882

 

Net income

 

$

665

 

Depreciation and amortization

 

11,339

 

Interest expense

 

1,173

 

Income tax expense

 

22

 

Loss on disposal of assets, net

 

130

 

Unit-based compensation

 

431

 

Total gain on commodity derivatives

 

(771

)

Net cash receipts (payments) for commodity derivatives settled during the period

 

(3,192

)

Non-cash inventory costing adjustment

 

2,915

 

Transaction costs and other

 

2,477

 

Adjusted EBITDA

 

$

15,189

 

Less:

 

 

 

Cash interest paid, net of interest income

 

887

 

Maintenance capital expenditures

 

990

 

Distributable cash flow

 

$

13,312

 

Less:

 

 

 

Distributions

 

11,966

 

Amount in excess of distributions

 

$

1,346

 

Distribution coverage

 

1.11

x

 

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JP ENERGY PARTNERS

SUPPLEMENTAL OPERATIONAL DATA

(Unaudited)

 

 

 

 

 

Three months ended March 31,

 

Segment

 

Key Operational Data

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

 

 

Crude oil pipelines and storage

 

Crude oil pipeline throughput (Bbls/d)

 

28,329

 

18,129

 

10,200

 

Crude oil supply and logistics

 

Crude oil sales (Bbls/d)

 

73,779

 

43,356

 

30,423

 

Refined products terminals and storage

 

Terminal and storage throughput (Bbls/d)

 

63,787

 

61,619

 

2,168

 

NGLs distribution and sales

 

NGL and refined product sales (Mgal/d)

 

274

 

236

 

38

 

 

8