What Do EMES’s and HCLP’s Cash Flow Measures Indicate?



EMES and HCLP’s capital expenditures

Hi-Crush Partners’ (HCLP) capital expenditures in the third quarter of 2016 were $25.6 million, which includes the acquisition of its Blair facility and expansion capital for the Colorado, Texas, and Wyeville facilities. HCLP has updated guidance for 2016 capital expenditures to a range of $42 million to $47 million. Emerge Energy Services (EMES) spent $1.3 million in 3Q16 on capital projects including maintenance capital expenditures.

Article continues below advertisement

Distributable cash flow

The above graph compares EMES’s and HCLP’s distributable cash flow and capital expenditures for the third quarter of 2016. Both the companies reported negative distributable cash flow for the quarter. Emerge Energy reported negative distributable cash flow of -$13.3 million in 3Q16.

Similarly, Hi-Crush Partners’ distributable cash flow fell to -$6.7 million in 3Q16 from $10.2 million in the same period last year. HCLP’s average sales price per ton sold fell slightly to $43 per ton in 3Q16 from $45 per ton in 2Q16 due in part to a “reduction in higher-priced in-basin sales.” The company also recorded one-time costs associated with “business development activities and the Blair drop down, as well as removing railcars from storage to service growing sand volumes.”


EMES and HCLP haven’t paid any distributions since the second quarter of 2015. HCLP continued its distribution suspension in 3Q16 to “conserve and strategically apply cash.” EMES is restricted from making distributions to its common unitholders under its amended credit agreement. Moreover, it did not generate available cash to distribute in the third quarter.

US Silica Holdings (SLCA) announced a quarterly cash dividend of $0.06 per common share on November 3, 2016.


More From Market Realist