Calumet Reports Q4 Sales Beat Amid Challenges, Eyes C-Corp Transition For Broader Appeal

Calumet Specialty Products Partners LP CLMT reported a fourth-quarter fiscal 2023 sales decline of 2.3% year-over-year to $976.50 million, beating the consensus of $926.13 million.

CLMT reported a net loss per unit of $(0.59), an improvement from $(0.95) YoY, missing the consensus of $(0.39).

The gross profit totaled $22.1 million (-38.3% Y/Y), and the margin contracted 130 bps to 2.3%.

The operating loss for the quarter contracted to $(13.9) million from $(28.4) million a year ago.

Adjusted EBITDA was $39.7 million compared to $63.9 million a year ago, margin contracted to 4.1% from 6.4% a year ago.

The company plans to convert its corporate structure from an MLP to a C-Corp by the middle of 2024, which it believes will open up the Calumet investment opportunity to a much broader audience. 

“Our 2023 financial results lagged our strategic progress due to the need to replace a cracked steam drum in Montana that left us operating at significantly reduced rates through the second half of the year and two weather events in Shreveport which resulted in significant lost opportunity,” commented Todd Borgmann, CEO.

Specialty Products and Solutions’ adjusted EBITDA was $75.6 million, compared to $96.1 million a year ago. 

Performance Brands’ adjusted EBITDA rose to $6.1 million from $2.7 million in the prior year, driven by improved industrial volumes and increased unit margins across the board as input costs have stabilized.

Montana/Renewables’ adjusted EBITDA for the quarter was $(25.8) million compared to $(13.1) million a year ago. Montana Renewables returned to normal operations in December; the steam drum was successfully replaced.

Cash and equivalents stood at $7.9 million at the end of the quarter. Total facility production in the quarter increased by 16.1% Y/Y to 80,785 bpd.

2029 Secured Notes: Calumet also announced that it has entered into a note purchase agreement to sell $200 million aggregate principal amount of a new series of 9.25% Senior Secured First Lien Notes due 2029 in a private placement transaction.

Price Action: CLMT shares are trading lower by 5.75% at $16.22 on Friday.