Calumet Posts Third Quarter Loss

Calumet Specialty Products Partners, L.P. reported a $23.6 million loss, improving from a $33.4 million loss in 2016s third quarter. The company announced Nov. 10 it would delay reporting of its third quarter earnings.

The net loss includes the impact of two items totaling a $21.1 million loss. One was an inventory adjustment item. The other pertained to enterprise resource planning system implementation expenses, mergers and acquisitions transaction expenses and realized hedging losses. ERP management systems integrate functions such as planning, purchasing, inventory, sales, marketing, finance and human resources. In its Nov. 10 announcement, Calumet said it was in the later stages of the ERP implementation, the results of which delayed issuing its third quarter earnings filing.

Calumet CEO Tim Go said in its Dec. 28 earnings news release that he wanted to express his disappointment over the delays required in filing our quarterly financial results and apologize to our stakeholders, all of whom have been patient with us as we implemented our new ERP system. Heading into the fourth quarter and beyond, we expect to file our quarterly results without delays.

Indianapolis-based Calumets sales for the quarter ending Sept. 30 reached almost $1.1 billion, up 13.5 percent from $966.6 million.

Third quarter specialty production volumes reached 28,228 barrels per day, up 4.4 percent from a year earlier. Lubricating oils reached 14,220 barrels per day, up 2.7 percent from a year earlier. Packaged and synthetic specialty products rose to 2,121 b/d, up 7.6 percent. Other third-quarter production volumes included 1,462 b/d of waxes, 7,868 b/d of solvents and 2,557 b/d of other products.

The companys core specialty products segment posted adjusted earnings before interest, taxes, depreciation and amortization of $43 million for the third quarter, the same as the third quarter a year earlier. Go noted that while the first two months of the third quarter marked healthy growth for its core business, the month of September was adversely affected by significant supply chain disruptions in the Gulf Coast region due to Hurricane Harvey, which caused us to delay and backlog some shipments in our highest margin specialties and branded products divisions out of the third quarter. The ability to deliver these results despite the negative impact of these events is indicate of the strength of our underlying business and reflects the improvements we have put in place over the course of the last year. We see continued strength in our core specialty markets, and shipping has returned to normal levels through the final quarter of the year.