Calumet Specialty Products Partners (NASDAQ: CLMT) reported Q1 EPS of $0.28, $0.46 better than the analyst estimate of ($0.18). Revenue for the quarter came in at $692.6 million versus the consensus estimate of $659.44 million.

Management Commentary

"Despite the slowing demand towards the end of the quarter, Calumet delivered another solid quarter and start to the year, as focused execution against our specialty-focused strategy and improved operations in our fuel products segment combined to deliver the strongest first quarter of Adjusted EBITDA since 2015, including net loss of $14.4 million and Adjusted EBITDA of $83.7 million," said Chief Executive Officer Steve Mawer. "Our core specialty business delivered strong profitability in the quarter, driven by the Partnership's commercial excellence initiatives that have led the improvement in our sales mix and maintaining our margins in a falling crude price environment. These efforts contributed to the significant year-over-year expansion to Adjusted gross profit per barrel and Adjusted EBITDA margins during the quarter. Our fuels segment performed well, with solid results supported by improved operational performance and record utilization at the Great Falls refinery. These structural improvements to both the commercial and operational aspects of our business drove the Partnership's healthy earnings."

Mawer added, "Looking ahead, we will continue to prioritize the health and safety of our team, customers and the communities in which we do business. I want to thank all our employees for their hard work and dedication to our customers through this difficult time. Many of our employees continue to work remotely, however, we are actively assessing and planning for a range of scenarios that would allow us to return to work, in accordance with guidance from health authorities. While federal guidelines and state orders have deemed our businesses as essential, the economic impacts of the virus are starting to be evident in a number of our end-markets. To date, our business operations have continued with limited interruption to our supply chain, and we will work to service the needs of our customers through this period of uncertainty. Calumet has taken significant strategic actions over the last several years to reposition the Partnership's portfolio around the more consistent and defensible core specialty business. As this drastic change in the economic environment unfolded, we enacted a previously developed response plan which included reducing capital spending, inventory and corporate overhead costs, which has bolstered our liquidity. These actions, combined with the ongoing contributions of our improved operations have improved the resilience of our business, which we believe will increase Calumet's ability to successfully navigate this period of volatility and uncertainty."

Mawer concluded, "We remain firmly committed to our strategic priorities, and will work diligently to continue to prioritize free cash flows and improvement to our balance sheet and leverage metrics. While the demand landscape is unclear, we anticipate that we have adequate liquidity between our cash balance and borrowing capacity to weather these unusual market conditions."

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