UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 8, 2017
Ciner Resources LP
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
Five Concourse Parkway
Atlanta, Georgia 30328
(Address of principal executive office)
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Item 2.02 Results of Operations and Financial Condition.
In accordance with General Instruction B.2. of Form 8-K, the following information and the exhibits referenced herein are being furnished pursuant to Item 2.02 of Form 8-K and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, are not subject to the liabilities of that section and are not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. On May 8, 2017, Ciner Resources LP (the “Partnership”) announced via a press release its financial results for the first quarter ended March 31, 2017. A copy of that press release is being furnished as Exhibit 99.1 hereto and is incorporated herein by reference. In addition, on Tuesday, May 9, 2017, the Partnership will hold a conference call for analyst and media to discuss results for the first quarter ended March 31, 2017. The conference call will be made available via a simultaneous webcast live on the Partnership’s website at www.ciner.us.com.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number 99.1
Description Press Release, dated May 8, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CINER RESOURCES LP
By: Ciner Resource Partners LLC, its General Partner
By: /s/ Nicole C. Daniel
Nicole C. Daniel
Vice President, General Counsel and Secretary
Date: May 8, 2017
Exhibit Number 99.1
Description Press Release, dated May 8, 2017
CINER RESOURCES LP
CINER RESOURCES LP ANNOUNCES FIRST QUARTER 2017 FINANCIAL RESULTS
Atlanta, Georgia May 8, 2017 — Ciner Resources LP (NYSE: CINR) today reported its financial and operating results for the
first quarter ended March 31, 2017.
First Quarter 2017 Financial Highlights:
- Net sales of $126.6 million increased 10.7% over the prior-year first quarter.
- Net income of $22.4 million increased 6.2% over the prior-year first quarter.
- Adjusted EBITDA of $30.4 million increased 7.8% over the prior-year first quarter.
- Earnings per unit of $0.54 for the quarter increased 5.9% over the prior-year first quarter of $0.51.
- Quarterly distribution declared per unit of $0.567 increased by 0.5% over the prior-year first quarter.
- Net cash provided by operating activities of $10.8 million decreased 70.7% over prior-year first quarter.
- Distributable cash flow of $13.4 million increased 7.2% over the prior-year first quarter. The distribution coverage ratio was 1.17 and 1.11 for the three months ended March 31, 2017 and 2016, respectively.
Kirk Milling, CEO, commented: “While we are pleased we were able to deliver an 8% improvement in EBITDA compared to last year, the modest level of sales volume growth was below our expectations as we are still not realizing the full potential of our debottlenecking investments. We are optimistic our annual production outage in April will yield improvements in our equipment utilization that will drive higher production levels as the year progresses. Our first quarter results also reflect the initial benefits we hope to realize by leveraging Ciner’s global soda ash platform as we stabilized supply for our parent in Europe as their new capacity is phased in over the course of the year.
“Looking to the market, new developments in China to rationalize uneconomical and environmentally challenged capacity should provide some momentum for prices to rise further over the balance of the year, particularly in Asia. Combined with improvements in cost of goods sold, we are optimistic we can build further on the progress we’ve made to start the year.”
Our full year outlook, provided below, remains unchanged from the previously provided guidance disclosed in the fourth quarter and year end 2016 financial results except for our outlook on international prices:
- We expect our soda ash total volume sold to increase 1% to 3%.
- We are improving our outlook for international prices from flat to up 3% to up 3% to 5%.
- We expect domestic pricing to be flat to down 3%.
- Maintenance of business capital expenditures are planned to be in the range of $12 to $15 million.
- Expansion capital expenditures are planned to be in the range of $23 to $28 million.
Three Months Ended March 31, 2017 compared to Three Months Ended March 31, 2016
The following table sets forth a summary of net sales, sales volumes and average sales price, and the percentage change between the periods.
Net sales. Net sales increased by 10.7% to $126.6 million for the three months ended March 31, 2017 from $114.4 million for the three months ended March 31, 2016, driven by an increase in total average sales price of 8.9%, and an increase in soda ash volumes sold of 1.6%. The increased sales are a result of increased domestic sales volumes and sales volumes to CIDT. Sales to CIDT include the cost of rail freight and the additional ocean freight.
Cost of products sold. Cost of products sold, including depreciation, depletion and amortization expense, increased by 13.5% to $98.1 million for the three months ended March 31, 2017 from $86.4 million for the three months ended March 31, 2016, primarily due to increases in freight costs. The increase in freight costs was driven by higher export sales volumes. Freight costs to CIDT include the cost of rail freight and the additional ocean freight. In the three months ended March 31, 2016, international sales primarily consisted of transactions to ANSAC that only included the cost of rail freight.
Selling, general and administrative expenses. Our selling, general and administrative expenses decreased 12.1% to $5.1 million for the three months ended March 31, 2017, compared to $5.8 million for the three months ended March 31, 2016. The reduction was primarily driven by lower selling and administrative fees relating to our affiliate, ANSAC, as well as lower professional services fees.
CAPEX AND ORE TO ASH RATIO
FINANCIAL POSITION AND LIQUIDITY
As of March 31, 2017, we had cash and cash equivalents of $11.4 million. In addition, we have approximately $91 million ($200 million, less $89 million outstanding and less standby letters of credit of $20 million) of remaining capacity under our revolving credit facilities. As of March 31, 2017, our leverage and fixed charge coverage ratios, as calculated per the Ciner Wyoming Credit Facility, were 1.05 and 1.10 respectively.
CASH FLOWS AND QUARTERLY CASH DISTRIBUTION
Cash provided by operating activities decreased to $10.8 million during the three months ended March 31, 2017 compared to $36.8 million of cash generated during three months ended March 31, 2016, primarily driven by $18.5 million of working capital used in operating activities during the three months ended March 31, 2017 compared to $9.2 million of working capital provided by operating activities during the three months ended March 31, 2016.
Cash provided by operating activities during the three months ended March 31, 2017 were partially offset by cash used in investing activities of $6.0 million for capital expenditures and cash used in financing activities during the three month period of $13.1 million. The cash used in financing activities during the three months ended March 31, 2017 was due to distributions paid of $23.6 million, partially offset by net borrowings on the Ciner Wyoming revolving credit facility of $10.5 million.
On April 21, 2017, the Partnership declared its first quarter 2017 quarterly distribution of $0.567 per unit. This represents an increase of 0.5% over the distributions declared during the first quarter of 2016. The quarterly cash distribution is payable on May 15, 2017 to unitholders of record on May 1, 2017.
Ciner Resources LP will host a conference call tomorrow, May 9, 2017 at 8:30 a.m. ET. Participants can listen in by dialing 1-866-550-6980 (Domestic) or 1-804-977-2644 (International) and referencing confirmation 8756011. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection. A telephonic replay of the call will be available approximately two hours after the call’s completion by calling 1-800-585-8367 or 404-537-3406 and referencing confirmation 8756011, and will remain available for the following seven days. This conference call will be webcast live and archived for replay on Ciner Resources’ website at www.cinerresources.com.
ABOUT CINER RESOURCES LP
Ciner Resources LP, a master limited partnership, operates the trona ore mining and soda ash production business of Ciner Wyoming LLC (“Ciner 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
Ciner Resources LP owns a controlling interest comprised of a 51% membership interest in Ciner Wyoming LLC (“Ciner Wyoming”). Natural Resource Partners L.P. (“NRP”) owns a non-controlling interest consisting of a 49% membership interest in Ciner Wyoming.
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. These statements contain words such as “possible,” “believe,” “should,” “could,” “would,” “predict,” “plan,” “estimate,” “intend,” “may,” “anticipate,” “will,” “if,” “expect” 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: changes in general economic conditions, the Partnership’s ability to meet its expected quarterly distributions, changes in the Partnership’s relationships with its customers, including American Natural Soda Ash Corporation (“ANSAC”) and Ciner Ic ve Dis Ticaret Anonim Sirket (“CIDT”), the 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 facilities, 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, processing, and shipment of trona ore and soda ash, as well as the other factors discussed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2016, and subsequent reports filed with the Securities and Exchange Commission. All forwardlooking 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.
CINER RESOURCES LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
CINER RESOURCES LP
CONDENSED CONSOLIDATED BALANCE SHEETS
CINER RESOURCES LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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 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 Ciner 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, 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:
- our operating performance as compared to other publicly traded partnerships in our industry, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;
- 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 capital expenditure projects and the returns on investment of various investment opportunities.
We believe that the presentation of Adjusted EBITDA, distributable cash flow and distribution coverage ratio provide useful information 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 and 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 non-GAAP financial measures of Adjusted EBITDA and distributable cash flow to the GAAP financial measures of net income and net cash provided by operating activities:
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:
Ciner Resources LP
Director of Finance and Treasurer