Sisecam Resources LP (NYSE: SIRE) (“we,” “us, “our,” or the
“Partnership”) today reported its financial and operating results
for third quarter ended September 30, 2022.
Third Quarter 2022 Financial Highlights:
- Net sales of $190.5 million increased 40.5% from the prior-year
third quarter; year-to-date net sales of $543.0 million increased
41.4% over the prior year for the same period. This increase is
primarily attributable to a sales price increase of 42.6% even
though the sales volume slightly decreased by 1.5% for the three
months ended September 30, 2022, compared to the three months ended
September 30, 2021. The increase for the nine months ended
September 30, 2022 from the nine months ended September 30, 2021,
primarily driven by an increase in the average sales price by 44.3%
due to both international and domestic higher demand. The higher
sales prices were due to strong demand in the domestic and
international markets.
- Soda ash volume produced decreased 4.6% from the prior-year
third quarter, and soda ash volume sold decreased 1.5% from the
prior-year third quarter; year-to-date soda ash volume produced
increased 0.4% from the prior-year, and soda ash volume sold
decreased 2.0% from the prior-year for the same period.
- Net income of $31.1 million increased $15.7 million from the
prior-year third quarter; year-to-date net income of $94.1 million
increased $66.3 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 costs.
- Adjusted EBITDA of $40.6 million increased 68.5% from the
prior-year third quarter; year-to-date Adjusted EBITDA of $120.1
million increased 114.1% over the prior year for the same period.
This increase is primarily attributable to the operating income
increase.
- Basic earnings per unit of $0.76 for the quarter increased
111.1% over the prior-year third quarter of $0.36; year-to-date
basic earnings per unit of $2.30 increased 265.1% over the prior
year for the same period.
- Net cash provided by operating activities of $49.3 million
increased $39.4 million over prior-year third quarter; year-to-date
net cash provided by operating activities of $81.7 million
increased $53.4 million over the prior year in the same
period.
- Distributable cash flow of $16.8 million increased 104.9%
compared to the prior-year third quarter; year-to-date
distributable cash flow of $48.1 million increased 204.4% over the
prior year for the same period.
Ertugrul Kaloglu, CEO, commented: The Sisecam Resources team
delivered another successful quarter adding to strong year-to-date
results mostly driven by strong pricing and demand in the soda ash
market globally. We safely produced 686 thousand short tons in the
third quarter, and successfully completed our planned Unit 6
production line annual maintenance.
Strong sales results, both domestically and internationally,
drove strong third quarter and YTD sales helping to offset
challenges resulting from inflation, recession concerns and
continued supply chain issues.
Third quarter and Year-to-Date net sales of $190.5 million and
$543 million, respectively, an increase year-over-year of 40.5% and
41.4% respectively, have benefited from continued advantageous
sales conditions particularly in markets overseas. While higher
energy and freight expense have challenged cost of products sold,
the team has worked hard to manage those costs and reduce impact of
any increases.
Expense and cash flow management continue to be a focus for the
team to reduce risks related to higher interest rates, inflation,
supply chain pressures and a possible recession. The company is
preparing for possible future uncertainty by prioritizing balance
sheet management with a conservative capital structure to continue
to meet future cash flow needs.
We are pleased with our strong commercial position and stable
operations which have helped drive superior results in the third
quarter. Going forward, our focus will remain on reducing future
operational and financial risks to manage potential impacts from
uncertainty in the economy.
Financial Highlights
Three Months Ended
September 30,
Nine Months Ended
September 30,
(Dollars in
millions, except per unit amounts)
2022
2021
% Change
2022
2021
% Change
Soda ash volume produced (millions of
short tons)
685.9
719.2
(4.6
) %
2,032.2
2,023.9
0.4
%
Soda ash volume sold (millions of short
tons)
690.1
700.5
(1.5
) %
2,028.9
2,070.6
(2.0
) %
Net sales
$
190.5
$
135.6
40.5
%
$
543.0
$
384.1
41.4
%
Net income
$
31.1
$
15.4
101.9
%
$
94.1
$
27.8
238.5
%
Net income attributable to Sisecam
Resources LP
$
15.4
$
7.4
108.1
%
$
46.5
$
12.7
266.1
%
Net income per limited partner unit
$
0.76
$
0.36
111.1
%
$
2.30
$
0.63
265.1
%
Adjusted EBITDA(1)
$
40.6
$
24.1
68.5
%
$
120.1
$
56.1
114.1
%
Adjusted EBITDA attributable to Sisecam
Resources LP(1)
$
20.3
$
12.0
69.2
%
$
60.2
$
27.7
117.3
%
Net cash provided (used) by operating
activities
$
49.3
$
9.9
398.0
%
$
81.7
$
28.3
188.7
%
Distributable cash flow attributable to
Sisecam Resources LP(1)
$
16.8
$
8.2
104.9
%
$
48.1
$
15.8
204.4
%
Distribution coverage ratio (1)
1.67
1.19
N/A
1.59
2.29
N/A
(1) See non-GAAP reconciliations
Three Months Ended September 30, 2022 compared to Three
Months Ended September 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 September
30,
Percent Increase/
(Decrease)
(Dollars in
millions, except for average sales price data):
2022
2021
Net sales:
Domestic
$
80.4
$
71.1
13.1
%
International
110.1
64.5
70.7
%
Total net sales
$
190.5
$
135.6
40.5
%
Sales volumes (thousands of short
tons):
Domestic
354.0
336.7
5.1
%
International
336.1
363.8
(7.6
)%
Total soda ash volume sold
690.1
700.5
(1.5
)%
Average sales price (per short
ton):(1)
Domestic
$
227.11
$
211.17
7.5
%
International
$
327.55
$
177.30
84.7
%
Average
$
276.04
$
193.58
42.6
%
Percent of net sales:
Domestic sales
42.2
%
52.4
%
(19.5
)%
International sales
57.8
%
47.6
%
21.4
%
Total percent of net sales
100.0
%
100.0
%
Percent of sales volumes:
Domestic volume
51.3
%
48.1
%
6.7
%
International volume
48.7
%
51.9
%
(6.2
)%
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 40.5% to $190.5 million for
the three months ended September 30, 2022 from $135.6 million for
the three months ended September 30, 2021, primarily driven by an
increase in international average sales price of 84.7% 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. Domestic average price also
increased by 7.5% due to customer mix while also factoring in the
overall annual market price increase as the market has experienced
fundamental improvements. The higher sales prices were due to
strong demand in the domestic and international markets.
Cost of products sold, including depreciation, depletion and
amortization expense, freight costs and affiliates. Cost of
products sold, including depreciation, depletion and amortization
expense, freight costs and affiliates increased by 34.7% to $151.1
million for the three months ended September 30, 2022 from $112.2
million for the three months ended September 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 decreased 1.5% to $6.6 million
for the three months ended September 30, 2022, compared to $6.7
million for the three months ended September 30, 2021. The decrease
was primarily due to the decline in sales volume to ANSAC and
therefore lower related charge per ton which was mostly offset by
loss on disposal of assets for the three months ended September 30,
2022, compared to three months ended September 30, 2021.
Operating income. As a result of the foregoing, operating income
increased by approximately 96.4% to $32.8 million for the three
months ended September 30, 2021 from $16.7 million operating income
for the three months ended September 30, 2021. The increase was
primarily due to higher net sales resulting from higher average
sales price.
Net income. As a result of the foregoing, net income increased
by approximately 101.9% to $31.1 million for the three months ended
September 30, 2022, from $15.4 million for the three months ended
September 30, 2021.
Nine Months Ended September 30, 2022 compared to Nine Months
Ended September 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.
Nine Months Ended September
30,
Percent Increase/
(Decrease)
(Dollars in
millions, except for average sales price data):
2022
2021
Net sales:
Domestic
$
228.9
$
207.9
10.1
%
International
314.1
176.2
78.3
%
Total net sales
$
543.0
$
384.1
41.4
%
Sales volumes (thousands of short
tons):
Domestic
1,012.0
981.6
3.1
%
International
1,016.9
1,089.0
(6.6
)%
Total soda ash volume sold
2,028.9
2,070.6
(2.0
)%
Average sales price (per short
ton):(1)
Domestic
$
226.19
$
211.80
6.8
%
International
$
308.88
$
161.80
90.9
%
Average
$
267.63
$
185.50
44.3
%
Percent of net sales:
Domestic sales
42.2
%
54.1
%
(22.0
)%
International sales
57.8
%
45.9
%
25.9
%
Total percent of net sales
100.0
%
100.0
%
Percent of sales volumes:
Domestic volume
49.9
%
47.4
%
5.3
%
International volume
50.1
%
52.6
%
(4.8
)%
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 41.4% to $543.0 million for
the nine months ended September 30, 2022 ,from $384.1 million for
the nine months ended September 30, 2021, primarily driven by an
increase in the average sales price by 44.3% due to both
international and domestic higher demand. Additionally, the sales
volume in the nine months ended September 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, including depreciation, depletion and
amortization expense, freight costs and affiliates. Cost of
products sold, including depreciation, depletion and amortization
expense, freight costs and affiliates, increased by 26.8% to $423.8
million for the nine months ended September 30, 2022 from $334.3
million for the nine months ended September 30, 2021, which was
primarily due to inflationary costs including increased ocean
freight costs and energy costs.
Selling, general and administrative expenses. Our selling,
general and administrative expenses increased by 16.8% to $20.9
million for the nine months ended September 30, 2022, compared to
$17.9 million for the nine months ended September 30, 2021. The
increase was primarily due to loss on disposal of assets partly
offset by the decline in sales volume to ANSAC and therefore lower
related charge per ton for the nine months ended September 30,
2022, compared to nine months ended September 30, 2021.
Operating income. As a result of the foregoing, operating income
increased by 208.2% to $98.3 million for the nine months ended
September 30, 2022, from $31.9 million for the nine months ended
September 30, 2021. During the nine months ended September 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 238.5% to $94.1 million for the nine months ended September 30,
2022, from $27.8 million for the nine months ended September 30,
2021. During the nine months ended September 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 September
30,
Nine Months Ended September
30,
(In
millions)
2022
2021
2022
2021
Capital Expenditures:
Maintenance
$
4.3
$
4.8
$
18.6
$
20.8
Expansion
0.1
0.1
0.2
0.6
Total
$
4.4
$
4.9
$
18.8
$
21.4
Operating and Other Data:
Ore grade(1)
86.6
%
87.3
%
86.7
%
86.0
%
Ore to ash ratio(2)
1.60:1.0
1.55:1.0
1.59:1.0
1.57:1.0
(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 nine months ended September
30, 2022 provided cash of $81.7 million, an increase of 188.7% from
the $28.3 million cash provided during the nine months ended
September 30, 2021, primarily as a result of the following:
- an increase of 238.5% as a result of net income of $94.1
million during the nine months ended September 30, 2022, compared
to $27.8 million for the prior-year period; and
- a partial offset by $13.9 million more cash used in working
capital during the nine months ended September 30, 2022, compared
to the nine months ended September 30, 2021. The increase of the
cash used in working capital period over period was primarily due
to a higher accounts receivable balance at September 30, 2022,
primarily due to higher international sales during nine months
ended September 30, 2022, as compared to the nine months ended
September 30, 2021.
Investing Activities
We used cash flows of $20.2 million in investing activities
during the nine months ended September 30, 2022, compared to $20.7
million used during the nine months ended September 30, 2021, for
capital projects as described in “Capital Expenditures” above.
Financing Activities
Cash used in financing activities of $49.3 million during the
nine months ended September 30, 2022, increased as compared to $5.1
million of cash used in financing activities in the prior-year same
period, largely due to larger distributions to general partner and
noncontrolling interest during the nine months ended September 30,
2022, compared to the nine months ended September 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
September 30,
Nine Months Ended
September 30,
(In millions,
except per unit data)
2022
2021
2022
2021
Net Sales
$
190.5
$
135.6
$
543.0
$
384.1
Operating costs and expenses:
Cost of products sold including freight
costs (excludes depreciation, depletion and amortization expense
set forth separately below)
138.6
104.0
391.4
307.5
Cost of product sold - affiliates
4.7
0.8
10.9
3.0
Depreciation, depletion and amortization
expense
7.8
7.4
21.5
23.8
Selling, general and administrative
expenses—affiliates
5.2
5.2
14.7
13.0
Selling, general and administrative
expenses—others
1.4
1.5
6.2
4.9
Total operating costs and expenses
157.7
118.9
444.7
352.2
Operating income
32.8
8.3
98.3
31.9
Other expenses:
Interest expense
(1.7
)
(1.3
)
(4.2
)
(4.1
)
Total other expense, net
(1.7
)
(1.3
)
(4.2
)
(4.1
)
Net income
31.1
15.4
94.1
27.8
Net income attributable to noncontrolling
interest
15.7
8.0
47.6
15.1
Net income attributable to Sisecam
Resources LP
15.4
7.4
46.5
12.7
Other comprehensive income:
Income/(loss) on derivative financial
instruments
0.6
8.6
(2.4
)
15.2
Comprehensive income
31.7
24.0
91.7
43.0
Comprehensive income attributable to
noncontrolling interest
16.0
12.2
46.4
22.5
Comprehensive income attributable to
Sisecam Resources LP
$
15.7
$
11.8
$
45.3
$
20.5
Net income per limited partner
unit:
Net income per limited partner unit
(basic)
$
0.76
$
0.36
$
2.30
$
0.63
Net income per limited partner unit
(diluted)
$
0.76
$
0.36
$
2.30
$
0.63
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)
September 30, 2022
December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents
$
14.9
$
2.7
Accounts receivable - affiliates
52.9
49.3
Accounts receivable, net of allowance for
credit losses
159.2
116.9
Inventory
35.4
30.1
Other current assets
12.5
9.0
Total current assets
274.9
208.0
Property, plant and equipment, net
298.6
304.2
Other non-current assets
32.7
31.1
Total assets
$
606.2
$
543.3
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
8.7
$
8.6
Accounts payable
22.8
21.9
Due to affiliates
3.9
2.3
Accrued expenses
53.7
41.0
Total current liabilities
89.1
73.8
Long-term debt
133.4
115.0
Other non-current liabilities
14.9
9.8
Total liabilities
237.4
198.6
Commitments and Contingencies
Equity:
Common unitholders - Public and Sisecam
Chemicals Wyoming LLC (19.8 units issued and outstanding at
September 30, 2022 and December 31, 2021)
200.4
187.4
General partner unitholders - Sisecam
Resource Partners LLC (0.4 units issued and outstanding at
September 30, 2022 and December 31, 2021)
4.5
4.6
Accumulated other comprehensive loss
1.8
3.0
Partners’ capital attributable to Ciner
Resources LP
206.7
195.0
Non-controlling interest
162.1
149.7
Total equity
368.8
344.7
Total liabilities and equity
$
606.2
$
543.3
SISECAM RESOURCES LP CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September
30,
(In
millions)
2022
2021
Cash flows from operating
activities:
Net income
$
94.1
$
27.8
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization
expense
21.7
24.2
Loss on disposal of assets, net
3.4
—
Equity-based compensation expenses
0.3
0.4
Other non-cash items
0.5
0.3
Changes in operating assets and
liabilities:
Accounts receivable - affiliates
(3.6
)
(3.5
)
Accounts receivable, net of allowance for
credit losses
(42.3
)
(26.8
)
Inventory
(6.7
)
2.9
Other current and non-current assets
(0.8
)
(1.2
)
Accounts payable
1.1
2.7
Due to affiliates
1.6
(0.9
)
Accrued expenses and other liabilities
12.4
2.4
Net cash provided (used) by operating
activities
81.7
28.3
Cash flows from investing
activities:
Capital expenditures
(20.2
)
(20.7
)
Net cash used in investing activities
(20.2
)
(20.7
)
Cash flows from financing
activities:
Borrowings on Sisecam Wyoming Credit
Facility
125.5
67.5
Borrowings on Sisecam Resources LP Credit
Facility
—
1.0
Repayments on Sisecam Wyoming Credit
Facility
(100.5
)
(65.0
)
Repayments on Sisecam Resources LP Credit
Facility
—
(2.0
)
Repayments on Sisecam Wyoming Equipment
Financing Arrangement
(6.5
)
(2.3
)
Distributions to common unitholders,
general partner, and noncontrolling interest
(67.7
)
(3.9
)
Other
(0.1
)
(0.4
)
Net cash used in financing activities
(49.3
)
(5.1
)
Net increase in cash and cash
equivalents
12.2
2.5
Cash and cash equivalents at beginning of
period
2.7
0.5
Cash and cash equivalents at end of
period
$
14.9
$
3.0
Supplemental disclosure of cash flow
information:
Interest paid during the period
$
3.7
$
3.5
Supplemental disclosure of non-cash
investing activities:
Capital expenditures on account
$
2.7
$
2.7
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:
- Adjusted EBITDA;
- 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 September
30,
Nine Months Ended September
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
$
31.1
$
15.4
$
94.1
$
27.8
Add backs:
Depreciation, depletion and amortization
expense
7.8
7.4
21.5
23.8
Interest expense, net
1.7
1.3
4.2
4.1
Equity-based compensation expense, net of
forfeitures
—
—
0.3
0.4
Adjusted EBITDA
40.6
24.1
120.1
56.1
Less: Adjusted EBITDA attributable to
noncontrolling interest
20.3
12.1
59.9
28.4
Adjusted EBITDA attributable to Sisecam
Resources LP
$
20.3
$
12.0
$
60.2
$
27.7
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
$
49.3
$
9.9
$
81.7
$
28.3
Add/(less):
Amortization of long-term loan
financing
(0.1
)
(0.1
)
(0.3
)
(0.4
)
Net change in working capital
(8.5
)
13.1
38.3
24.4
Interest expense, net
1.7
1.3
4.2
4.1
Other non-cash items and loss on disposal
of assets, net
(1.8
)
(0.1
)
(3.8
)
(0.3
)
Adjusted EBITDA
40.6
24.1
120.1
56.1
Less: Adjusted EBITDA attributable to
noncontrolling interest
20.3
12.1
59.9
28.4
Adjusted EBITDA attributable to Sisecam
Resources LP
20.3
12.0
60.2
27.7
Less: Cash interest expense, net
attributable to Sisecam Resources LP
0.8
0.6
1.9
1.8
Less: Maintenance capital expenditures
attributable to Sisecam Resources LP
2.7
3.2
10.2
10.1
Distributable cash flow attributable to
Sisecam Resources LP
$
16.8
$
8.2
$
48.1
$
15.8
Cash distribution declared per unit
$
0.50
$
0.34
$
1.50
$
0.34
Total distributions to unitholders and
general partner
$
10.1
$
6.9
$
30.3
$
6.9
Distribution coverage ratio
1.67
1.19
1.59
2.29
The following table presents a reconciliation of the GAAP
financial measure of net income to the non-GAAP financial measures
of Adjusted EBITDA and distributable cash flow attributable to
Sisecam Resources LP for the periods presented.
(Dollars in
millions, except per unit data)
Cumulative
Four
Quarters
ended
Q3-2022
Q3-2022
Q2-2022
Q1-2022
Q4-2021
Q3-2021
Reconciliation of net income to
Adjusted EBITDA attributable to Sisecam Resources LP:
Net income
$
117.7
$
31.1
$
31.2
$
31.8
$
23.6
$
15.4
Add backs:
Depreciation, depletion and amortization
expense
29.3
7.8
7.2
6.5
7.8
7.4
Interest expense, net
5.1
1.7
1.4
1.1
0.9
1.3
Equity-based compensation (benefit)
expense, net of forfeitures
0.5
—
0.3
0.1
0.1
—
Adjusted EBITDA
152.5
40.6
40.1
39.4
32.4
24.1
Less: Adjusted EBITDA attributable to
non-controlling interest
76.1
20.3
19.9
19.7
16.2
12.1
Adjusted EBITDA attributable to Sisecam
Resources LP
$
76.4
$
20.3
$
20.2
$
19.7
$
16.2
$
12.0
Adjusted EBITDA attributable to Sisecam
Resources LP
$
76.4
$
20.3
$
20.2
$
19.7
$
16.2
$
12.0
Less: Cash interest expense, net
attributable to Sisecam Resources LP
2.4
0.8
0.6
0.5
0.5
0.6
Less: Maintenance capital expenditures
attributable to Sisecam Resources LP
12.8
2.7
3.5
4.1
2.5
3.2
Distributable cash flow attributable to
Sisecam Resources LP
$
61.2
$
16.8
$
16.1
$
15.1
$
13.2
$
8.2
Cash distribution declared per unit
$
2.15
$
0.50
$
0.50
$
0.50
$
0.65
$
0.34
Total distributions to unitholders and
general partner
$
43.7
$
10.1
$
10.1
$
10.1
$
13.4
$
6.9
Distribution coverage ratio
1.40
1.67
1.60
1.50
0.99
1.19
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221028005484/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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