- Revenues increased 12% compared to
the three months ended September 30, 2015
- Net Income increased 26% compared to
the three months ended September 30, 2015
- Adjusted EBITDA increased 9%
compared to the three months ended September 30, 2015
World Point Terminals, LP (the “Partnership”), a Delaware
limited partnership (NYSE: WPT), announced today its financial
results for the quarter ended September 30, 2016.
“I am pleased with World Point’s third quarter accomplishments,”
said Ken Fenton, President and Chief Operating Officer of WPT GP,
LLC, the general partner of the Partnership. “In addition to the
year-over-year growth in revenues, net income and EBITDA, we placed
178,000 barrels of storage capacity in service and under contract
at the North Little Rock terminal and completed construction of two
rail spurs at the Chickasaw terminal that will improve logistical
efficiencies. Both projects provided an immediate boost to revenues
and are expected to provide long-term revenue streams to the
Partnership.”
Financial Summary
A summary of the financial results for the three months ended
September 30, 2016 compared to the three months ended September 30,
2015, includes:
- Revenues for the three months ended
September 30, 2016 increased $2.7 million, or 12% compared to the
three months ended September 30, 2015.
- Base storage services fees increased
$1.6 million, or 9%, primarily as a result of the addition of new
customer contracts at the Blakeley Island, Jacksonville and
Galveston terminals, increased terminaling activity at the Glenmont
terminal and the addition of the Salisbury terminal in the fourth
quarter of 2015, partially offset by reduced base storage fees at
the St. Louis terminal.
- Excess storage services fees for the
three months ended September 30, 2016 increased $0.2 million, or
135%, primarily as a result of increased terminaling activity at
the Jacksonville terminal.
- Ancillary and additive services
increased $0.9 million, or 28%, primarily as a result of increased
railcar loading activity at the Chickasaw terminal, increased
heating activity at the Baton Rouge terminal, increased ethanol
blending activity at the Jacksonville terminal and profit-sharing
revenue earned at the St. Louis terminal during 2016.
- Operating expenses for the three months
ended September 30, 2016 increased $1.2 million, or 16%, compared
to the three months ended September 30, 2015. This increase was
primarily attributable to a (i) $0.7 million increase in other
expense including environmental compliance costs of $0.5 million
incurred at the Newark terminal that are expected to be reimbursed
by insurance, less a deductible, (ii) $0.6 million increase in
repairs and maintenance primarily due to periodic tank cleaning and
repairs completed in the third quarter of 2016, and (iii) $0.1
million increase in utilities, offset by a (i) $0.1 million
decrease in insurance expense and (ii) $0.1 million decrease in
property taxes.
- Selling, general and administrative
expenses, including reimbursements to affiliates, for the three
months ended September 30, 2016 decreased 2%, compared to the three
months ended September 30, 2015 primarily as a result of $0.1
million in directors’ fees that were incurred later in the year in
2015 than in 2016, offset by a $0.1 million increase in personnel
costs and professional fees.
- Depreciation and amortization expense
for the three months ended September 30, 2016 decreased $0.5
million, or 8%, compared to the three months ended September 30,
2015. This decrease is primarily due to terminal assets that became
fully depreciated in December of 2015 and January of 2016 at the
Baltimore and Newark terminals.
- Interest expense consists primarily of
commitment fees paid to maintain the Credit Facility and
amortization of associated costs over the term of the facility.
Interest expense remained unchanged for the three months ended
September 30, 2016 compared to the three months ended September 30,
2015.
- Interest and dividend income for the
three months ended September 30, 2016 increased slightly compared
to the three months ended September 30, 2015. This increase was
attributable to higher amounts of short-term investments held
during the third quarter of 2016.
- Gain on investments for the three
months ended September 30, 2016 decreased $0.1 million, or 84%
compared to the three months ended September 30, 2015. The decrease
was primarily attributable to a small mark-to-market loss on
investments recorded in the third quarter of 2016 as opposed to a
$0.1 million gain during the third quarter of 2015.
- Income tax expense for the three months
ended September 30, 2016 decreased $0.1 million, compared with the
three months ended September 30, 2015.
- Net income for the three months ended
September 30, 2016 increased $1.8 million, or 26%, compared to the
three months ended September 30, 2015. Net income was $0.25 per
unit for the three months ended September 30, 2016.
- Average daily terminal throughput for
the three months ended September 30, 2016 increased 17 mbbls, or
10%, compared to the three months ended September 30, 2015
primarily as a result of increased throughput at the Jacksonville
and Galveston terminals.
- Adjusted EBITDA, as defined by the
Partnership, increased $1.3 million for the three months ended
September 30, 2016 compared with the three months ended September
30, 2015.
A summary of the financial results for the nine months ended
September 30, 2016 compared to the nine months ended September 30,
2015, includes:
- Revenues for the nine months ended
September 30, 2016 increased $2.8 million, or 4%, compared to the
nine months ended September 30, 2015.
- Base storage services fees increased
$2.6 million or 4%, primarily as a result of additional tanks at
the Blakeley Island terminal that were placed under contract during
the first half of 2016, new customers at the Galveston terminal,
increased terminaling activity at the Glenmont terminal, and the
addition of the Salisbury terminal in the fourth quarter of 2015,
partially offset by reduced base storage fees at the St. Louis
terminal.
- Excess storage services fees decreased
$0.1 million, or 10% for the nine months ended September 30, 2016
compared to the nine months ended September 30, 2015.
- Ancillary and additive services
increased $0.3 million, or 3%, compared to the nine months ended
September 30, 2015, primarily as a result of increased railcar
loading activity at the Chickasaw terminal, increased heating
activity at the Baton Rouge terminal, increased ethanol blending
activity at the Jacksonville terminal and profit-sharing revenue
earned at the St. Louis terminal, partially offset by reduced
polymer processing activity at the Granite City terminal caused by
a disruption in the Keystone Pipeline, reduced barge loading fees
at the Newark terminal and reduced heating fees at the Pine Bluff
terminal during 2016.
- Operating expenses for the nine months
ended September 30, 2016 increased $1.0 million, or 4%, compared to
the nine months ended September 30, 2015. This increase was
primarily attributable to a (i) $0.9 million increase in
environmental compliance costs incurred at the Newark terminal that
are expected to be reimbursed by insurance, less a deductible, (ii)
$0.2 million increase in repairs and maintenance primarily due to
periodic tank cleaning and repairs, and (iii) $0.2 million increase
in utility costs, offset by a $0.3 million decrease in insurance
expense.
- Selling, general and administrative
expenses for the nine months ended September 30, 2016 increased
$0.2 million, or 4%, compared to the nine months ended September
30, 2015 as a result of a (i) $0.2 million increase in personnel
and office expenses, (ii) $0.1 million increase in audit and tax
preparation expenses and (iii) $0.1 million increase in public
company expenses, offset by a $0.2 million decrease in insurance
and professional fees.
- Depreciation and amortization expense
for the nine months ended September 30, 2016 decreased $1.1
million, or 6%, compared to the nine months ended September 30,
2015. This decrease is primarily due to terminal assets that became
fully depreciated in December of 2015 and January of 2016 at the
Baltimore and Newark terminals.
- Interest expense consists primarily of
commitment fees paid to maintain the Credit Facility and
amortization of associated costs over the term of the facility.
Interest expense increased slightly for the nine months ended
September 30, 2016 compared to the nine months ended September 30,
2015.
- Interest and dividend income for the
nine months ended September 30, 2016 decreased $0.1 million
compared to the nine months ended September 30, 2015. This decrease
was attributable to lower amounts of short-term investments held
during the first half of 2016.
- Gain on investments for the nine months
ended September 30, 2016 increased $0.1 million compared to the
nine months ended September 30, 2015. The increase was primarily
attributable to a mark-to-market gain on investments recorded at
September 30, 2016 as opposed to a loss at September 30, 2015.
- Income tax expense for the nine months
ended September 30, 2016 increased slightly compared with the nine
months ended September 30, 2015.
- Net income for the nine months ended
September 30, 2016 increased $2.7 million, or 11%, compared to the
nine months ended September 30, 2015. Net income was $0.80 per unit
for the nine months ended September 30, 2016.
- Average daily terminal throughput for
the nine months ended September 30, 2016 decreased 20 mbbls or,
11%, compared to the nine months ended September 30, 2015 primarily
as a result of decreased throughput at the Galveston, Newark and
Weirton terminals.
- Adjusted EBITDA, as defined by the
Partnership, increased $1.6 million for the nine months ended
September 30, 2016 compared with the nine months ended September
30, 2015.
Attachment A to this communication contains selected financial
and operational data from the Partnership’s Condensed Consolidated
Statements of Income for the three and nine month periods ended
September 30, 2016 and September 30, 2015.
Filing of Quarterly Report on Form 10-Q
World Point Terminals, LP filed its Quarterly Report on Form
10-Q with the Securities and Exchange Commission and posted that
report to its website: www.worldpointlp.com on November 9,
2016.
Operational Update
The Partnership generated increased revenues, net income and
Adjusted EBITDA in the third quarter of 2016 as compared the third
quarter of 2015. This increase continued the recovery from the
period of reduced utilization that occurred during the middle of
2015 when some customers did not renew their contracts, resulting
in approximately 580,000 barrels of tankage being placed under
“spot” (month-to-month) contracts during the first quarter of 2015,
and 739,000 barrels of unutilized storage as of September 30, 2015,
at the Galveston terminal.
During the second quarter of 2016, some spot contracts were
terminated. As of September 30, 2016, 159,000 barrels of tankage
remain under spot contracts, and 470,000 barrels of tankage are
unutilized at the Galveston terminal. There is no certainty that we
will be able to keep the remaining tanks under contract throughout
2016. In addition, there is no certainty that contracts expiring in
2016 will be extended or that any extension or recontracting will
result in the same level of revenue to the Partnership.
The Partnership recently completed the construction of two tanks
totaling 178,000 barrels of storage capacity at the North Little
Rock terminal. The tanks were placed in service effective August
14, 2016.
About World Point Terminals, LP
World Point Terminals, LP is a master limited partnership that
owns, operates, develops and acquires terminals and other assets
relating to the storage of light refined products, heavy refined
products and crude oil. The Partnership currently owns 15.6 million
barrels of storage capacity at 18 strategically located terminals
in the East Coast, Gulf Coast and Midwest regions of the United
States. The Partnership is headquartered in St. Louis,
Missouri.
Forward-Looking Statements
Disclosures in this press release contain certain
forward-looking statements within the meaning of the federal
securities laws. Statements that do not relate strictly to
historical or current facts are forward-looking. These statements
contain words such as “possible,” “if,” “will” and “expect” and
involve risks and uncertainties including, among others that our
business plans may change as circumstances warrant. Accordingly,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. The Partnership does
not undertake any obligation to update or revise such
forward-looking statements to reflect events or circumstances that
occur, or which the Partnership becomes aware, after the date
hereof.
Non-GAAP Financial Measure.
In addition to the GAAP results provided in this quarterly
report on Form 10-Q, we provide a non-GAAP financial measure,
Adjusted EBITDA. We define Adjusted EBITDA as net income (loss)
before net interest expense, income tax expense, depreciation and
amortization expense and equity based compensation expense as
further adjusted to remove gain or loss on investments and on the
disposition of assets and non-recurring items.
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:
- our operating performance as compared
to other publicly traded partnerships in the midstream energy
industry, without regard to historical cost basis or 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 acquisitions and other
capital expenditure projects and the returns on investment in
various opportunities.
We believe that the presentation of Adjusted EBITDA will provide
useful information to investors in assessing our financial
condition and results of operations. The GAAP measures most
directly comparable to Adjusted EBITDA are net income and net cash
provided by operating activities. Our non-GAAP financial measure of
Adjusted EBITDA should not be considered as an alternative to GAAP
net income or net cash provided by operating activities. Adjusted
EBITDA has important limitations as an analytical tool because it
excludes some but not all items that affect net income. You should
not consider Adjusted EBITDA in isolation or as a substitute for
analysis of our results as reported under GAAP. Because Adjusted
EBITDA may be defined differently by other companies in our
industry, our definition of Adjusted EBITDA may not be comparable
to similarly titled measures of other companies, thereby
diminishing its utility.
Attachment B to this communication contains a reconciliation of
Adjusted EBITDA to the most directly comparable GAAP financial
measures for the three and nine month periods ended September 30,
2016 and September 30, 2015.
Attachment A:
Selected Financial and Operational Data
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2016 2015 2016
2015 (Dollars in thousands) REVENUES Third
parties $ 15,783 $ 13,762 $ 44,470 $ 44,219 Affiliates 9,420
8,723 30,408 27,846
25,203 22,485 74,878 72,065 Operating costs, expenses
and other Operating expenses 7,680 6,529 21,561 21,179 Operating
expenses reimbursed to affiliates 1,182 1,143 3,168 2,529 Selling,
general and administrative expenses 981 990 2,872 2,950 Selling,
general and administrative expenses reimbursed to affiliates 624
654 1,810 1,545 Depreciation and amortization 5,999 6,498 17,892
18,956 Income from joint venture (210 ) (432 )
(627 ) (602 ) Total operating costs, expenses and other
16,256 15,382 46,676
46,557 INCOME FROM OPERATIONS 8,947 7,103
28,202 25,508 OTHER INCOME (EXPENSE) Interest expense (209 )
(209 ) (623 ) (620 ) Interest and dividend income 61 55 171 232
Gain on investments and other-net 18 115
143 47 Income before income
taxes 8,817 7,064 27,893 25,167 Provision for income taxes
19 77 111 107 NET
INCOME $ 8,798 $ 6,987 $ 27,782 $ 25,060
Operating Data: Available storage capacity, end of
period (mbbls) 15,630 15,452 15,630 15,452 Average daily terminal
throughput (mbbls) 179 162 165 185
Attachment B: Reconciliation of Net
Income to Adjusted EBITDA and Net Cash Provided by Operating
Activities
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2016 2015 2016
2015 (in thousands) Reconciliation of Net Income
to Adjusted EBITDA: Net income $ 8,798 $ 6,987 $ 27,782
$ 25,060 Depreciation and amortization 5,999 6,498 17,892 18,956
Depreciation and amortization – CENEX joint venture 131 143 389 366
Provision for income taxes 19 77 111 107 Interest expense 209 209
623 620 Interest and dividend income (61 ) (55 ) (171 ) (232 )
Equity based compensation expense 623 635 1,894 1,905 Gain on
investments and other - net (18 ) (115 ) (143
) (47 )
Adjusted EBITDA $ 15,700 $ 14,379
$ 48,377 $ 46,735
Reconciliation of
net cash provided by operating activities to Adjusted EBITDA:
Net cash flows from operating activities $ 15,221 $ 18,573 $
47,437 $ 47,011 Changes in assets and liabilities that provided
cash 35 (4,902 ) 777 (1,519 ) Amortization of deferred financing
costs (47 ) (46 ) (139 ) (138 ) Income from CENEX joint venture 210
432 627 602 Distribution from CENEX joint venture - - (1,216 ) -
Depreciation and amortization – CENEX joint venture 131 143 389 366
Provision for income taxes 19 77 111 107 Interest expense 209 209
623 620 Interest and dividend income (61 ) (55 ) (171 ) (232 )
Realized loss on investments and other – net (17 )
(52 ) (61 ) (82 )
Adjusted EBITDA $ 15,700
$ 14,379 $ 48,377 $ 46,735
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