Sisecam Resources LP (NYSE: SIRE) (“we,” “us, “our,” or the
“Partnership”) today reported its financial and operating results
for second quarter ended June 30, 2022.
Second Quarter 2022 Financial Highlights:
- Net sales of $189.1 million increased 56.7% from the prior-year
second quarter; year-to-date net sales of $352.5 million increased
41.9% over the prior year for the same period. The quarter increase
is primarily attributable to a sales price increase of 45.7% and
the sales volume increase of 7.5% for the three months ended June
30, 2022 compared to the three months ended June 30, 2021. The
higher sales price and volume were due to strong demand in the
domestic and international markets.
- Soda ash volume produced increased 1.7% from the prior-year
second quarter, and soda ash volume sold increased 7.5% from the
prior-year second quarter; year-to-date soda ash volume produced
increased 3.1% from the prior-year, and soda ash volume sold
decreased 2.3% from the prior-year for the same period. During the
first quarter of 2021, the Partnership experienced an increase in
international sales volume associated with the initial impact of
direct sales to international customers subsequent to our December
31, 2020 ANSAC exit.
- Net income of $31.2 million increased $24.4 million from the
prior-year second quarter; year-to-date net income of $63.0 million
increased $50.6 million over the prior year for the same period.
The increases are primarily due to higher average sales price
partly offset by inflationary impact on operating.
- Adjusted EBITDA of $40.1 million increased 146.0% from the
prior-year second quarter; year-to-date Adjusted EBITDA of $79.5
million increased 148.4% over the prior year for the same period.
This increase is primarily attributable to the operating income
increase.
- Net income per limited partner unit of $0.76 for the quarter
increased 407% over the prior-year second quarter of $1.54;
year-to-date basic earnings per unit of $1.54 increased 470% over
the prior year for the same period.
- Net cash provided by operating activities of $24.7 million
decreased $0.1 million over prior-year second quarter; year-to-date
net cash provided by operating activities of $32.4 million
increased $14.0 million over the prior year in the same
period.
- Distributable cash flow of $16.1 million increased 973.3%
compared to the prior-year second quarter; year-to-date
distributable cash flow of $31.2 million increased 403.2% over the
prior year for the same period.
Ertugrul Kaloglu, CEO, commented: I am pleased to report another
successful quarter for Sisecam Resources, amidst continued strength
in the soda ash markets globally. We safely produced 668,400 short
tons in the second quarter, and successfully completed our planned
Unit 7 production line annual maintenance. We continue to focus on
operational reliability and meeting production goals while
maintaining safety as our highest priority.
Second quarter sales were strong due largely to advantageous
conditions in the export market, where tight supply has kept prices
elevated above historical levels. We are carefully following
markets both domestically and abroad and managing anticipated
decreased growth rates particularly for Sisecam’s export
markets.
While supply chain problems continues to create headwinds, our
goal is to drive the company with strong financials and prepare for
possible economic turmoil with proper balance sheet management.
Sales of $189 million in the second quarter translated into $31
million of net income and $40 million of adjusted EBITDA. High
inflation, expected recession or stagflation both domestically and
abroad and the cost of freight have strained working capital to
some extent. With this in mind, we continue to prioritize a healthy
capital structure/leverage ratio, as well as a strong coverage
ratio for our distributable cash.
We will maintain our focus on conservative cash flow management
to better position the company to thwart any negative effects from
increasing interest rates, inflationary pressures and overall
uncertainty in the broader economy and we are pleased with our
current operational stability and commercial position. I want to
thank our committed employees for their efforts this year and am
proud of our team’s successful transition to joining Sisecam’s
global business.
Financial Highlights
Three Months Ended June
30,
Six Months Ended June
30,
(Dollars in
millions, except per unit amounts)
2022
2021
% Change
2022
2021
% Change
Soda ash volume produced (millions of
short tons)
0.668
0.657
1.7
%
1.346
1.305
3.1
%
Soda ash volume sold (millions of short
tons)
0.699
0.650
7.5
%
1.339
1.370
(2.3
)%
Net sales
$
189.1
$
120.7
56.7
%
$
352.5
$
248.5
41.9
%
Net income
$
31.2
$
6.8
358.8
%
$
63.0
$
12.4
408.1
%
Net income attributable to Sisecam
Resources LP
$
15.4
$
2.9
431.0
%
$
31.1
$
5.3
486.8
%
Net income per limited partner unit
$
0.76
$
0.15
406.7
%
$
1.54
$
0.27
470.4
%
Adjusted EBITDA(1)
$
40.1
$
16.3
146.0
%
$
79.5
$
32.0
148.4
%
Adjusted EBITDA attributable to Sisecam
Resources LP(1)
$
20.2
$
8.0
152.5
%
$
39.9
$
15.7
154.1
%
Net cash provided (used) by operating
activities
$
24.7
24.8
(0.4
)%
$
32.4
$
18.4
76.1
%
Distributable cash flow attributable to
Sisecam Resources LP(1)
$
16.1
$
1.5
973.3
%
$
31.2
$
6.2
403.2
%
Distribution coverage ratio (1)
1.60
N/A
N/A
1.54
N/A
N/A
(1)See non-GAAP reconciliations
Three Months Ended June 30, 2022 compared to Three Months
Ended June 30, 2021
The following table sets forth a summary of net sales, sales
volumes and average sales price, and the percentage change between
the periods.
Three Months Ended June
30,
Percent
Increase/(Decrease)
(Dollars in millions, except for
average sales price data):
2022
2021
Net sales:
Domestic
$
79.0
$
70.5
12.1
%
International
110.1
50.2
119.3
%
Total net sales
$
189.1
$
120.7
56.7
%
Sales volumes (thousands of short
tons):
Domestic
344.7
329.5
4.6
%
International
354.2
320.7
10.4
%
Total soda ash volume sold
698.9
650.2
7.5
%
Average sales price (per short
ton):(1)
Domestic
$
229.18
$
213.96
7.1
%
International
$
310.84
$
156.53
98.6
%
Average
$
270.57
$
185.64
45.7
%
Percent of net sales:
Domestic sales
41.8
%
58.4
%
(28.4
)%
International sales
58.2
%
41.6
%
39.9
%
Total percent of net sales
100.0
%
100.0
%
Percent of sales volumes:
Domestic volume
49.3
%
50.7
%
(2.8
)%
International volume
50.7
%
49.3
%
2.8
%
Total percent of volume sold
100.0
%
100.0
%
(1) Average sales price per short ton is
computed as net sales divided by volumes sold
Consolidated Results
Net sales. Net sales increased by 56.7% to $189.1 million for
the three months ended June 30, 2022 from $120.7 million for the
three months ended June 30, 2021, primarily driven by an increase
in international average sales price of 98.6% because the prices
are generally negotiated on a quarterly basis with improving supply
and demand fundamentals recognized for soda ash in the global
market and particularly in Asia. The domestic average price also
increased by 7.1% due to customer mix, factoring in the overall
annual market price increase as the market has experienced
fundamental improvements. The higher sales price and volume were
due to the strong demand in the domestic and international
markets.
Cost of products sold. Cost of products sold, including
depreciation, depletion and amortization expense and freight costs,
increased by 39.3% to $148.8 million for the three months ended
June 30, 2022 from $106.8 million for the three months ended June
30, 2021, which was primarily due to increases in freight cost,
more specifically due to significant ocean freight cost increases
impacted by recent global supply chain constraints as well as price
increases in fuel.
Selling, general and administrative expenses. Our selling,
general and administrative expenses increased 37.5% to $7.7 million
for the three months ended June 30, 2022, compared to $5.6 million
for the three months ended June 30, 2021. The increase was
primarily due to the loss on disposal of assets for the three
months ended June 30, 2022 compared to three months ended June 30,
2021.
Operating income. As a result of the foregoing, operating income
increased by approximately 293% to $32.6 million for the three
months ended June 30, 2022 from a $8.3 million operating income for
the three months ended June 30, 2021. The increase was due to
higher net sales resulting from the higher average price for
international customers.
Net income. As a result of the foregoing, net income increased
by approximately 359% to $31.2 million for the three months ended
June 30, 2022, from $6.8 million for the three months ended June
30, 2021. The increase was due to higher net sales resulting from
the higher average price for international customers.
Six Months Ended June 30, 2022 compared to Six Months Ended
June 30, 2021
The following table sets forth a summary of net sales, sales
volumes and average sales price, and the percentage change between
the periods.
Six Months Ended June
30,
Percent
Increase/(Decrease)
(Dollars in
millions, except for average sales price data):
2022
2021
Net sales:
Domestic
$
148.5
$
136.8
8.6
%
International
204.0
111.7
82.6
%
Total net sales
$
352.5
$
248.5
41.9
%
Sales volumes (thousands of short
tons):
Domestic
658.0
644.9
2.0
%
International
680.8
725.2
(6.1
)%
Total soda ash volume sold
1,338.8
1,370.1
(2.3
)%
Average sales price (per short
ton):(1)
Domestic
$
225.68
$
212.13
6.4
%
International
$
299.65
$
154.03
94.5
%
Average
$
263.30
$
181.37
45.2
%
Percent of net sales:
Domestic sales
42.1
%
55.1
%
(23.6
)%
International sales
57.9
%
44.9
%
29.0
%
Total percent of net sales
100.0
%
100.0
%
Percent of sales volumes:
Domestic volume
49.1
%
47.1
%
4.2
%
International volume
50.9
%
52.9
%
(3.8
)%
Total percent of volume sold
100.0
%
100.0
%
(1) Average sales price per short ton is
computed as net sales divided by volumes sold
Consolidated Results
Net sales. Net sales increased by 41.9% to $352.5 million for
the six months ended June 30, 2022 from $248.5 million for the six
months ended June 30, 2021, primarily driven by an increase in the
average sales price by 45.2% due to both international and domestic
higher demand. Additionally, the sales volume in the six months
ended June 30, 2021, includes significant international sales
volumes in the first quarter of 2021 associated with the initial
impact of direct sales to international customers subsequent to the
Partnership’s December 31, 2020 ANSAC exit.
Cost of products sold. Cost of products sold, including
depreciation, depletion and amortization expense and freight costs,
increased by 22.8% to $272.7 million for the six months ended June
30, 2022 from $222.1 million for the six months ended June 30,
2021, which was primarily due to inflationary costs including ocean
freight costs and energy costs.
Selling, general and administrative expenses. Our selling,
general and administrative expenses increased 27.7% to $14.3
million for the six months ended June 30, 2022, compared to $11.2
million for the six months ended June 30, 2021. The increase was
primarily due to the loss on disposal of assets in the three months
ended June 30, 2022.
Operating income. As a result of the foregoing, operating income
increased by 330.9% to $65.5 million for the six months ended June
30, 2022, from $15.2 million for the six months ended June 30,
2021. During the six months ended June 30, 2022, sales price has
increased significantly due to the strong demand in the
international and domestic markets.
Net income. As a result of the foregoing, net income increased
by 408.1% to $63.0 million for the six months ended June 30, 2022,
from $12.4 million for the six months ended June 30, 2021. During
the six months ended June 30, 2022, sales price has increased
significantly due to the strong demand in the international and
domestic markets.
CAPEX AND ORE METRICS
The following table summarizes our capital expenditures, on an
accrual basis, ore grade and ore to ash ratio:
Three Months Ended June
30,
Six Months Ended June
30,
(In
millions)
2022
2021
2022
2021
Capital Expenditures:
Maintenance
$
7.1
$
8.5
$
14.3
$
16.0
Expansion
0.1
0.2
0.1
0.5
Total
7.2
$
8.7
$
14.4
$
16.5
Operating and Other Data:
Ore grade(1)
86.7
%
86.4
%
86.7
%
85.7
%
Ore to ash ratio(2)
1.61 :1.0
1.52: 1.0
1.58: 1.0
1.58: 1.0
(1)Ore grade is the percentage of raw
trona ore that is recoverable as soda ash free of impurities. A
higher ore grade will produce more soda ash than a lower ore
grade.
(2)Ore to ash ratio expresses the number
of short tons of trona ore needed to produce one short ton of soda
ash and includes our deca rehydration recovery process. In general,
a lower ore to ash ratio results in lower costs and improved
efficiency.
In connection with the acquisition by Sisecam Chemicals USA Inc.
(“Sisecam USA”) of 60% of Sisecam Chemicals Resources LLC, Sisecam
USA, the new controlling owner, is evaluating all the expansion
plans for the Partnership. As we evaluate investment opportunities,
we intend to maintain our disciplined financial policy with a
conservative capital structure.
Cash Flows Discussion
Operating Activities
Our operating activities during the six months ended June 30,
2022 provided cash of $32.4 million, an increase of 76.1% from the
$18.4 million cash provided during the six months ended June 30,
2021, primarily as a result of the following:
- an increase of 408.1% in net income of $63.0 million during the
six months ended June 30, 2022, compared to $12.4 million for the
prior-year period; and
- an offset by $35.5 million more cash used in working capital
during the six months ended June 30, 2022, compared to the six
months ended June 30, 2021. The increase of the cash used in
working capital period over period was primarily due to a higher
accounts receivable balance at June 30, 2022 primarily due to
higher international sales during six months ended June 30, 2022 as
compared to the six months ended June 30, 2021.
Investing Activities
We used cash flows of $15.0 million in investing activities
during the six months ended June 30, 2022, compared to $17.1
million used during the six months ended June 30, 2021, for capital
projects.
Financing Activities
Cash used in financing activities of $16.7 million during the
six months ended June 30, 2022 decreased as compared to $0.7
million of cash provided by financing activities in the prior-year
same period cash provided by financing activities, largely due to
larger distributions to general partner and noncontrolling interest
during the six months ended June 30, 2022 as compared to the six
months ended June 30, 2021.
ABOUT SISECAM RESOURCES LP
Sisecam Resources LP, a master limited partnership, operates the
trona ore mining and soda ash production business of Sisecam
Wyoming, one of the largest and lowest cost producers of natural
soda ash in the world, serving a global market from its facility in
the Green River Basin of Wyoming. The facility has been in
operation for more than 50 years.
NATURE OF OPERATIONS
Sisecam Resources LP owns a controlling interest comprised of a
51% membership interest in Sisecam Wyoming. Natural Resource
Partners L.P. owns a non-controlling interest consisting of a 49%
membership interest in Sisecam Wyoming.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements.
Statements other than statements of historical facts included in
this press release that address activities, events or developments
that the Partnership expects, believes or anticipates will or may
occur in the future are forward-looking statements. Forward-looking
statements include all statements that are not historical facts and
in some cases may be identified by the use of forward-looking
terminology such as the words “believe,” “expect,” “plan,”
“intend,” “seek,” “anticipate,” “estimate,” “predict,” “forecast,”
“project,” “potential,” “continue,” “may,” “will,” “could,”
“should” or the negative of these terms or similar expressions.
Such statements are based only on the Partnership’s current
beliefs, expectations and assumptions regarding the future of the
Partnership’s business, 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
Partnership’s control. The Partnership’s actual results and
financial condition may differ materially from those implied or
expressed by these forward-looking statements. Consequently, you
are cautioned not to place undue reliance on any forward-looking
statement because no forward-looking statement can be guaranteed.
Factors that could cause the Partnership’s actual results to differ
materially from the results contemplated by such forward-looking
statements include: the outcome of the non-binding proposal made by
Sisecam USA to acquire all of our issued and outstanding common
units not already owned by Sisecam USA or its affiliates, changes
in general economic conditions, changes in the Partnership’s
relationships with its customers, the domestic and international
demand for soda ash and the opportunities for the Partnership to
increase its volume sold, the development of glass and glass making
product alternatives, changes in soda ash prices, operating
hazards, unplanned maintenance outages at the Partnership’s
production facility, construction costs or capital expenditures
exceeding estimated or budgeted costs or expenditures, the effects
of government regulation, tax position, and other risks incidental
to the mining and processing of trona ore, and shipment of soda
ash, the impact of a cybersecurity event, and our change of control
effective December 21, 2021, the impact of war on the global
economy, energy supplies and raw materials, and our ability to
maintain or increase our distributions, and the short- and
long-term impacts of the COVID-19 pandemic, including the
resurgence or subsequent variants and the impact of government
orders on our employees and operations, as well as the other
factors discussed in the Partnership’s Annual Report on Form 10-K
for the year ended December 31, 2021, and any additional subsequent
reports filed with the United States Securities and Exchange
Commission. All forward-looking statements included in this press
release are expressly qualified in their entirety by such
cautionary statements. Unless required by law, the Partnership
undertakes no duty and does not intend to update the
forward-looking statements made herein to reflect new information
or events or circumstances occurring after this press release. All
forward-looking statements speak only as of the date made.
Supplemental Information
SISECAM RESOURCES LP
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(In millions, except per unit
data)
2022
2021
2022
2021
Net Sales
$
189.1
$
120.7
$
352.5
$
248.5
Operating costs and expenses:
Cost of products sold including freight
costs (excludes depreciation, depletion and amortization expense
set forth separately below)
141.6
99.1
259.0
205.7
Depreciation, depletion and amortization
expense
7.2
7.7
13.7
16.4
Selling, general and administrative
expenses—affiliates
4.1
4.2
9.5
7.8
Selling, general and administrative
expenses—others
3.6
1.4
4.8
3.4
Total operating costs and expenses
156.5
112.4
287.0
233.3
Operating income
32.6
8.3
65.5
15.2
Other expenses:
Interest expense
(1.4
)
(1.5
)
(2.5
)
(2.8
)
Total other expense, net
(1.4
)
(1.5
)
(2.5
)
(2.8
)
Net income
31.2
6.8
63.0
12.4
Net income attributable to noncontrolling
interest
15.8
3.9
31.9
7.1
Net income attributable to Sisecam
Resources LP
15.4
2.9
31.1
5.3
Other comprehensive income:
Income/(loss) on derivative financial
instruments
(8.2
)
5.1
(3.0
)
6.6
Comprehensive income
23.0
11.9
60.0
19.0
Comprehensive income attributable to
noncontrolling interest
11.8
6.4
30.4
10.3
Comprehensive income attributable to
Sisecam Resources LP
$
11.2
$
5.5
$
29.6
$
8.7
Net income per limited partner
unit:
Net income per limited partner unit
(basic)
$
0.76
$
0.15
$
1.54
$
0.27
Net income per limited partner unit
(diluted)
$
0.76
$
0.15
$
1.54
$
0.27
Limited partner units
outstanding:
Weighted average limited partner units
outstanding (basic)
19.8
19.8
19.8
19.8
Weighted average limited partner units
outstanding (diluted)
19.8
19.8
19.8
19.8
SISECAM RESOURCES LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
As of
(In millions)
June 30, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
3.4
$
2.7
Accounts receivable—affiliates
51.2
49.3
Accounts receivable, net
170.6
116.9
Inventory
36.8
30.1
Other current assets
10.5
9.0
Total current assets
272.5
208.0
Property, plant and equipment, net
303.6
304.2
Other non-current assets
32.3
31.1
Total assets
$
608.4
$
543.3
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
8.7
$
8.6
Accounts payable
30.8
21.9
Due to affiliates
5.8
2.3
Accrued expenses
46.3
41.0
Total current liabilities
91.6
73.8
Long-term debt
145.6
115.0
Other non-current liabilities
13.6
9.8
Total liabilities
250.8
198.6
Commitments and contingencies (See Note
9)
Equity:
Common unitholders - Public and Sisecam
Chemicals Wyoming LLC (19.8 units issued and outstanding at June
30, 2022 and December 31, 2021)
195.3
187.4
General partner unitholders - Sisecam
Resource Partners LLC (0.4 units issued and outstanding at June 30,
2022 and December 31, 2021)
4.4
4.6
Accumulated other comprehensive income
1.5
3.0
Partners’ capital attributable to Sisecam
Resources LP
201.2
195.0
Noncontrolling interest
156.4
149.7
Total equity
357.6
344.7
Total liabilities and partners’ equity
$
608.4
$
543.3
SISECAM RESOURCES LP
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June
30,
(In millions)
2022
2021
Cash flows from operating
activities:
Net income
$
63.0
$
12.4
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization
expense
13.9
16.7
Loss on disposal of assets, net
1.7
Equity-based compensation expenses
0.3
0.4
Other non-cash items
0.3
0.2
Changes in operating assets and
liabilities:
Accounts receivable—affiliates
(1.9
)
(4.4
)
Accounts receivable, net
(53.7
)
(13.7
)
Inventory
(6.9
)
2.3
Other current and non-current assets
(1.8
)
(2.0
)
Accounts payable
8.2
6.1
Due to affiliates
3.5
(0.7
)
Accrued expenses and other liabilities
5.8
1.1
Net cash provided (used) by operating
activities
32.4
18.4
Cash flows from investing
activities:
Capital expenditures
(15.0
)
(17.1
)
Net cash used in investing activities
(15.0
)
(17.1
)
Cash flows from financing
activities:
Borrowings on Sisecam Wyoming Credit
Facility
90.5
57.5
Borrowings on Sisecam Resources LP Credit
Facility
—
1.0
Repayments on Sisecam Wyoming Credit
Facility
(55.5
)
(50.0
)
Repayments on Sisecam Resources LP Credit
Facility
—
(2.0
)
Repayments on Sisecam Wyoming Equipment
Financing Arrangement
(4.3
)
(1.5
)
Distributions to common unitholders,
general partner, and noncontrolling interest
(47.2
)
(3.9
)
Common units surrendered for taxes
(0.2
)
(0.1
)
Net cash used in financing activities
(16.7
)
0.7
Net increase in cash and cash
equivalents
3.4
2.5
Cash and cash equivalents at beginning of
period
2.7
0.5
Cash and cash equivalents at end of
period
$
3.4
$
2.5
Supplemental disclosure of cash flow
information:
Interest paid during the period
$
2.2
$
2.3
Supplemental disclosure of non-cash
investing activities:
Capital expenditures on account
3.6
1.4
Non-GAAP Financial Measures
We report our financial results in accordance with generally
accepted accounting principles in the United States (“GAAP”). We
also present the non-GAAP financial measures of:
- Distributable cash flow; and
- Distribution coverage ratio.
We define Adjusted EBITDA as net income (loss) plus net interest
expense, income tax, depreciation, depletion and amortization,
equity-based compensation expense and certain other expenses that
are non-cash charges or that we consider not to be indicative of
ongoing operations. Distributable cash flow is defined as Adjusted
EBITDA less net cash paid for interest, maintenance capital
expenditures and income taxes, each as attributable to Sisecam
Resources LP. The Partnership may fund expansion-related capital
expenditures with borrowings under existing credit facilities such
that expansion-related capital expenditures will have no impact on
cash on hand or the calculation of cash available for distribution.
In certain instances, the timing of the Partnership’s borrowings
and/or its cash management practices will result in a mismatch
between the period of the borrowing and the period of the capital
expenditure. In those instances, the Partnership adjusts designated
reserves (as provided in the partnership agreement) to take account
of the timing difference. Accordingly, expansion-related capital
expenditures have been excluded from the presentation of cash
available for distribution. Distributable cash flow will not
reflect changes in working capital balances. We define distribution
coverage ratio as the ratio of distributable cash flow as of the
end of the period to cash distributions payable with respect to
such period.
Adjusted EBITDA is a non-GAAP supplemental financial measure
that management and external users of our consolidated financial
statements, such as industry analysts, investors, lenders and
rating agencies, may use to assess the Partnership’s operating
performance and liquidity. Adjusted EBITDA may provide an operating
performance comparison to other publicly traded partnerships in our
industry, without regard to historical cost basis or financing
methods. Adjusted EBITDA may also be used to assess the
Partnership’s liquidity including such things as the ability of our
assets to generate sufficient cash flows to make distributions to
our unitholders and our ability to incur and service debt and fund
capital expenditures.
Distributable cash flow and distribution coverage ratio are
non-GAAP supplemental financial measures that management and
external users of our consolidated financial statements, such as
industry analysts, investors, lenders and rating agencies, may use
to assess the Partnership’s liquidity, including:
- the ability of our assets to generate sufficient cash flow to
make distributions to our unitholders; and
- our ability to incur and service debt and fund capital
expenditures.
We believe that the presentation of Adjusted EBITDA provides
useful information to our investors in assessing our financial
conditions, results of operations and liquidity. Distributable cash
flow and distribution coverage ratio provide useful information to
investors in assessing our liquidity. The GAAP measures most
directly comparable to Adjusted EBITDA is net income and net cash
provided by operating activities. The GAAP measure most directly
comparable to distributable cash flow and distribution coverage
ratio is net cash provided by operating activities. Our non-GAAP
financial measures of Adjusted EBITDA, distributable cash flow and
distribution coverage ratio should not be considered as
alternatives to GAAP net income, operating income, net cash
provided by operating activities, or any other measure of financial
performance or liquidity presented in accordance with GAAP.
Adjusted EBITDA and distributable cash flow have important
limitations as analytical tools because they exclude some, but not
all items that affect net income and net cash provided by operating
activities. Investors should not consider Adjusted EBITDA,
distributable cash flow and distribution coverage ratio in
isolation or as a substitute for analysis of our results as
reported under GAAP. Because Adjusted EBITDA, distributable cash
flow and distribution coverage ratio may be defined differently by
other companies, including those in our industry, our definition of
Adjusted EBITDA, distributable cash flow and distribution coverage
ratio may not be comparable to similarly titled measures of other
companies, thereby diminishing its utility.
The table below presents a reconciliation of the GAAP financial
measures of net income and net cash provided by operating
activities to the non-GAAP financial measures of Adjusted EBITDA
and distributable cash flow:
Three Months Ended June
30,
Six Months Ended June
30,
(In millions, except per unit
data)
2022
2021
2022
2021
Reconciliation of net income to
Adjusted EBITDA attributable to Sisecam Resources LP:
Net income
$
31.2
$
6.8
$
63.0
$
12.4
Add backs:
Depreciation, depletion and amortization
expense
7.2
7.7
13.7
16.4
Interest expense, net
1.4
1.5
2.5
2.8
Equity-based compensation expense, net of
forfeitures
0.3
0.3
0.3
0.4
Adjusted EBITDA
40.1
16.3
79.5
32.0
Less: Adjusted EBITDA attributable to
noncontrolling interest
19.9
8.3
39.6
16.3
Adjusted EBITDA attributable to Sisecam
Resources LP
20.2
8.0
39.9
15.7
Reconciliation of net cash from
operating activities to Adjusted EBITDA and distributable cash flow
attributable to Sisecam Resources LP:
Net cash provided by operating
activities
$
24.7
$
24.8
$
32.4
$
18.4
Add/(less):
Amortization of long-term loan
financing
(0.1
)
(0.1
)
(0.2
)
(0.3
)
Net change in working capital
15.7
(9.6
)
46.8
11.3
Interest expense, net
1.4
1.5
2.5
2.8
Other non-cash items and loss on disposal
of assets, net
(1.6
)
(0.3
)
(2.0
)
(0.2
)
Adjusted EBITDA
40.1
16.3
79.5
32.0
Less: Adjusted EBITDA attributable to
noncontrolling interest
19.9
8.3
39.6
16.3
Adjusted EBITDA attributable to Sisecam
Resources LP
20.2
8.0
39.9
15.7
Less: Cash interest expense, net
attributable to Sisecam Resources LP
0.6
0.7
1.1
1.2
Less: Maintenance capital expenditures
attributable to Sisecam Resources LP
3.5
5.8
7.6
8.3
Distributable cash flow attributable to
Sisecam Resources LP
$
16.1
$
1.5
$
31.2
$
6.2
Cash distribution declared per unit
$
0.50
$
—
$
1.00
$
—
Total distributions to unitholders and
general partner
$
10.1
$
—
$
20.2
$
—
Distribution coverage ratio
1.60
N/A
1.54
N/A
The following table presents a reconciliation of the non-GAAP
financial measures of Adjusted EBITDA to GAAP financial measure of
net income for the periods presented:
(Dollars in millions, except per unit
data)
Cumulative Four Quarters ended
Q2-2022
Q2-2022
Q1-2022
Q4-2021
Q3-2021
Q2-2021
Reconciliation of net income to
Adjusted EBITDA attributable to Sisecam Resources LP:
Net income
$
102.0
$
31.2
$
31.8
$
23.6
$
15.4
$
6.8
Add backs:
Depreciation, depletion and amortization
expense
28.9
7.2
6.5
7.8
7.4
7.7
Interest expense, net
4.7
1.4
1.1
0.9
1.3
1.5
Equity-based compensation (benefit)
expense, net of forfeitures
0.4
0.3
—
0.1
—
0.3
Adjusted EBITDA
136.0
$
40.1
39.4
32.4
24.1
16.3
Less: Adjusted EBITDA attributable to
non-controlling interest
67.9
19.9
19.7
16.2
12.1
8.3
Adjusted EBITDA attributable to Sisecam
Resources LP
$
68.1
$
20.2
$
19.7
$
16.2
$
12.0
$
8.0
Adjusted EBITDA attributable to Sisecam
Resources LP
$
68.1
$
20.2
$
19.7
$
16.2
$
12.0
$
8.0
Less: Cash interest expense, net
attributable to Sisecam Resources LP
2.2
0.6
0.5
0.5
0.6
0.7
Less: Maintenance capital expenditures
attributable to Sisecam Resources LP
13.3
3.5
4.1
2.5
3.2
4.4
Distributable cash flow attributable to
Sisecam Resources LP
$
52.6
$
16.1
$
15.1
$
13.2
$
8.2
$
2.9
Cash distribution declared per unit
$
1.990
$
0.50
$
0.500
$
0.650
$
0.340
$
—
Total distributions to unitholders and
general partner
$
40.5
$
10.1
$
10.1
$
13.4
$
6.9
$
—
Distribution coverage ratio
1.30
1.60
1.50
0.99
1.19
N/A
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220729005487/en/
Sisecam Resources LP Investor Relations M. Nedim
Kulaksizoglu Chief Financial Officer (770) 375-2321
NKULAKSIZOGLU@sisecam.com
Sisecam Resources (NYSE:SIRE)
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