CVR Partners(UAN) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the three months ended March 31, 2025, increased to $142,866,000, up 11.9$127,665,000 in the same period of 2024[19] - Operating income rose significantly to $34,589,000, compared to$20,059,000 in the prior year, reflecting a 72.3% increase[19] - Net income for the first quarter of 2025 was $27,088,000, more than double the$12,579,000 reported in the same quarter of 2024, representing a 115.5% increase[19] - Basic and diluted earnings per common unit increased to $2.56, up from$1.19 in the prior year, marking a 115.9% rise[19] - Total revenue for the three months ended March 31, 2025, was $142.9 million, an increase of 11.9$127.7 million for the same period in 2024[45] - For the three months ended March 31, 2025, the company's operating income was $34.6 million, up from$20.1 million in the same period in 2024, and net income increased to $27.1 million from$12.6 million[100] - EBITDA and Adjusted EBITDA for Q1 2025 were $52.9 million, up from$39.5 million in Q1 2024, reflecting a 33.8% increase[114] Assets and Liabilities - Total current assets as of March 31, 2025, were $247,108,000, an increase of 5.8$233,541,000 at the end of 2024[17] - Cash and cash equivalents increased to $121,775,000 from$90,857,000, reflecting a 34.1% increase[17] - Total liabilities decreased slightly to $712,293,000 from$725,654,000, a reduction of 1.8%[17] - Long-term debt and finance lease obligation, including current portion, was $570.0 million as of March 31, 2025, slightly up from$568.9 million as of December 31, 2024[42] - As of March 31, 2025, total long-term debt was $548.0 million, consistent with the previous quarter[120] Cash Flow - Cash flows from operating activities for the first quarter of 2025 were$55,391,000, compared to $42,417,000 in the same period of 2024, indicating a 30.6$171.8 million, compared to $129.8 million as of December 31, 2024, indicating a 32.3$55.4 million, an increase of $13.0 million or 30.6$42.4 million in Q1 2024[130] Capital Expenditures - The partnership's capital expenditures for the first quarter of 2025 were $9,871,000, compared to$8,095,000 in the same period of 2024, reflecting a 21.9% increase[25] - Total capital expenditures for Q1 2025 were $5.9 million, with estimated full-year expenditures projected between$50 million and $60 million[123] - Maintenance capital expenditures for Q1 2025 were$3.7 million, with full-year estimates ranging from $40 million to$45 million[123] - Growth capital expenditures for Q1 2025 were $2.2 million, with full-year estimates projected between$10 million and $15 million[123] - The next planned turnaround at the Coffeyville Facility is scheduled for Q4 2025, costing approximately$15 million[124] Inventory and Expenses - Total inventories as of March 31, 2025, were $80.4 million, up from$75.6 million as of December 31, 2024, reflecting a 6.4% increase[36] - The cost of materials and other increased to $27.9 million in Q1 2025 from$25.3 million in Q1 2024, mainly due to higher natural gas prices and freight expenses[106] - Direct operating expenses decreased to $54.5 million in Q1 2025 from$55.7 million in Q1 2024, attributed to lower repairs and maintenance costs[107] Related Party Transactions - Sales to related parties rose to $1,118,000 in Q1 2025, compared to$639,000 in Q1 2024, indicating increased intercompany transactions[58] - Expenses from related parties decreased slightly to $9,916,000 in Q1 2025 from$10,855,000 in Q1 2024, showing a reduction in costs associated with related entities[59] - The Partnership's due to related parties decreased to $4,969,000 as of March 31, 2025, down from$6,213,000 at the end of 2024, reflecting better liquidity management[58] Market and Industry Outlook - The anticipated combination of increasing global population and decreasing arable land per capita supports long-term fundamentals for the U.S. nitrogen fertilizer industry[76] - Regulatory changes, including the EPA's renewable volume obligations, are expected to maintain strong demand for corn, supporting the use of nitrogen-based fertilizers[73] - Geopolitical risks, including the ongoing Russia-Ukraine conflict, may disrupt production and trade in the fertilizer industry, impacting future operations[72] - In spring 2025, farmers are estimated to plant 95.3 million corn acres, a 5.0% increase from 90.7 million acres in 2024, while soybean acres are expected to decrease by 4.1% to 83.5 million acres[79] Operational Improvements - The Partnership aims to achieve industry-leading utilization rates at both manufacturing facilities, focusing on operational improvements and cost reductions[71] - The company plans to execute debottlenecking projects in 2025 to improve reliability and expand production capabilities, including a nitrous oxide abatement unit installation[87] - The partnership is exploring the use of natural gas as an optional feedstock at its Coffeyville Facility, which could enhance ammonia production flexibility[85] - The ammonia utilization rate improved to 101% for the three months ended March 31, 2025, compared to 90% in the same period in 2024, primarily due to planned outages in 2024[96] Compensation and Distributions - Total quarterly distributions for 2025 were declared at $1.75 per common unit, totaling approximately$18.5 million, consistent with the previous quarter's distribution[61] - The Partnership declared a distribution of $2.26 per common unit for Q1 2025, totaling approximately$23.9 million, payable on May 19, 2025[129] - The Compensation Committee adopted the 2025 Performance Based Bonus Plan, which requires achieving at least 50% of an Adjusted EBITDA Threshold for bonus payments[141] - The EBITDA multiplier for the Partnership's performance measures will range from 50% to 150% based on Adjusted EBITDA achieved relative to the threshold[141] - The 2025 UAN Plan will be filed with the Quarterly Report on Form 10-Q for the period ending June 30, 2025[141]