Calumet Specialty Products Partners (NASDAQ: CLMT) reported Q4 EPS of ($0.23), $0.12 better than the analyst estimate of ($0.35). Revenue for the quarter came in at $774.8 million versus the consensus estimate of $689.68 million.

"During the fourth quarter, Calumet delivered on key strategic priorities, including the refinancing of our 2021 notes and the divestment of our San Antonio fuels refinery" said Tim Go, Chief Executive Officer of Calumet. "Our leverage ratio improved to 4.0x net debt to trailing twelve month Adjusted EBITDA (or 4.6x excluding LCM/LIFO), down from 5.6x net debt to trailing twelve month Adjusted EBITDA (or 4.9x excluding LCM/LIFO) at the end of 2018. Calumet delivered another strong quarter of financial and operational performance, with strong utilization in both our Specialty and Fuel Products segments, overcoming seasonally softer demand and market headwinds, to deliver $49.9 million of Adjusted EBITDA (excluding LCM/LIFO) in the fourth quarter."

Go added, "For the full year, Calumet delivered $262.8 million of Adjusted EBITDA (excluding LCM/LIFO) and $191.9 million of cash flow from operations. Our Specialty Products segment contributed $207.9 million of Adjusted EBITDA (excluding LCM/LIFO), which was up 24% year-over-year. This helped to partially offset the lower Fuel Products segment contribution of $152.5 million of Adjusted EBITDA (excluding LCM/LIFO), which was down year-over-year, due primarily to the weaker crude differentials. In addition, our Specialty Products gross profit per barrel increased 7.2% to $34.41, and our Specialty Products EBITDA margins (excluding LCM/LIFO) increased 320 basis points to 15.4% driven by volume growth in solvents, naphthenic oils, & finished lubricants and our margin-enhancing self-help initiatives. In particular, our rationalization of low-margin SKUs shed 2,100 bpd of low profitability business and has freed up our commercial team to focus on growing our higher margin business. Finally, in 2019, we reduced total long-term debt by over $390 million and lowered our interest expenses by roughly $21 million.

Go concluded, "Looking ahead to 2020, Calumet remains firmly committed to our transformation, carrying the momentum of our improved profitability and strengthened balance sheet to drive top- and bottom-line growth in our core specialties business. We have taken the next step in our portfolio transformation and started the process of reviewing strategic options for our remaining fuels refinery in Great Falls, Montana and expect to execute upon an option, which could occur as early as this year. In addition, I am pleased to announce that Calumet completed the strategic acquisition of Paralogics, LLC during the first quarter, which expands our presence in the wax blending and packaging market. In conclusion, we remain focused on executing against our 2020 Self-Help efforts, which we expect to deliver $40 million in incremental Adjusted EBITDA. When combined with our other strategic priorities, we believe these efforts should help us expand our Specialty Products gross profit to over $40 per barrel and our Adjusted EBITDA Margins over 15%."

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