Emerge Energy Services (fka EMESQ)

[Snackman]

Q1 results released. Loss per share 1.42. Consensus was-.59 revenue came in at 29.7 M. Consesus est was 122M. .. they have basically shuttered their fuel business and put it up for sale which means their business in almost sand based for fracking which is shrinking at a fast clip due to oil price. The sand segment lost 13.5 mil in Q 1 and earned over 24m same q in 2015. The US rig count continues to fall 354 in April to 328 May 6th.

Emerge Energy Services LP Announces Agreement to Divest Fuels Business in Deal Valued at Approximately $179 million
Emerge Energy Services LP 15 minutes ago GlobeNewswire

Transaction Would Drive Substantial Debt Reduction and Simplification of Emerge`s Operating Platform

Southlake, Texas (June 23, 2016) - Emerge Energy Services LP ("Emerge" or "the Company") (EMES) is pleased to announce that it has entered into a definitive agreement for the sale of Emerge`s fuels business (the "Fuels Business") to Sunoco LP ("Sunoco") (SUN), a publicly traded master limited partnership engaged in the wholesale distribution and retail sale of motor fuels. The Fuels Business is comprised of Dallas-based Direct Fuels LLC and Birmingham-based Allied Energy Company LLC, both wholly owned subsidiaries of Emerge, and engages primarily in the processing of transmix and the distribution of refined fuels.


The aggregate purchase price is $178.5 million, subject to working capital adjustments, and the transaction will be completed on a cash-free, debt-free basis. As stated previously, Emerge intends to apply the proceeds, net of transaction related expenses, to reduce its outstanding debt.


Following the sale, Emerge will become a pure-play business with all of its assets and operations focused on its Sand segment, which is engaged in the businesses of mining, processing and distributing silica sand, a key input for the hydraulic fracturing of oil and natural gas wells.


Ted W. Beneski, Chairman of the Board of Emerge, commented, "This agreement with Sunoco is the result of a thorough process undertaken to maximize value for unitholders. We are pleased with the results of this process and could not be happier to be partnering on this transaction with Sunoco, a top operator with a stellar reputation in the marketplace. The Fuels Business will be in good hands."


With respect to Emerge`s use of proceeds, Mr. Beneski continued, "As we have stated on previous earnings calls, we undertook the sale of the Fuels Business to generate proceeds to pay down Emerge`s debt. I am encouraged to say that the cash proceeds from this transaction will allow Emerge to substantially reduce its overall debt levels, and will better position the company to opportunistically execute on strategic initiatives and create long term value as the industry looks to exit the current prolonged downturn."