Executive Summary

Q3 2023 was weak operationally with revenue down sharply and minimal cash generation: total revenues $11.08M, net loss $2.81M, Adjusted EBITDA $2.01M, and Net Cash Provided by Operating Activities $0.87M .
Liquidity and credit remain the central risk: senior secured facility matured Nov 2, 2023; forbearance extended to Nov 17, 2023; no additional borrowings permitted; unrestricted cash $6.3M (Nov 2) vs $8.7M (Sep 30) .
Distribution remains suspended for Q3 2023 and constrained by lender waivers; management prioritizes free cash flow for operations and debt reduction .
Delisting risk elevated: NYSE thresholds flagged; 30-day average market cap ~$16.5M and last price $0.3996/unit as of Nov 6, 2023; below-compliance risk persists if market cap falls < $15M or price < $0.16 .
Commercial backdrop: Stroud trial terminalling agreement extended through Jan 2024; potential longer-term agreement contingent on successful testing .

What Went Well and What Went Wrong

What Went Well

Stroud Terminal saw a short-term rail-to-truck agreement extended through Jan 2024, creating a path to a potential longer-term contract if testing succeeds .
Operating costs declined YoY due to lower pipeline fees, subcontracted rail services, O&M, and the absence of Stroud idling costs and Casper impairment recognized in Q3 2022 .
Q3 2023 net loss improved materially vs Q3 2022 due to the absence of the prior-year $71.6M impairment at Casper; net loss narrowed to $2.8M from $69.4M YoY .

Management quote: “We are pleased to have announced a short-term extension of the forbearance under our Credit Agreement… we are also advancing several ongoing commercial discussions… such as our recent announcement regarding the extension of the terminalling services agreement at the Stroud Terminal.” — CFO Adam Altsuler .

What Went Wrong

Revenues declined primarily due to reduced contracted capacity at Hardisty and the Casper Terminal sale at end of Q1 2023; Stroud revenue remained muted vs prior year .
Adjusted EBITDA fell 84% YoY on lower revenue and throughput; DCF fell to $0.3M, reflecting higher cash taxes and interest paid .
Credit facility constraints and covenant non-compliance underscore balance sheet fragility; partnership had no available capacity under the credit agreement and is operating under lender forbearance .

Financial Results

Consolidated Metrics vs Prior Quarters

Metric	Q1 2023	Q2 2023	Q3 2023
Revenues ($USD Millions)	$21.13	$19.47	$11.08
Operating Income (EBIT) ($USD Millions)	$8.01	$4.42	$(0.58)
Net Income (Loss) ($USD Millions)	$1.98	$4.64	$(2.81)
Adjusted EBITDA ($USD Millions)	$3.29	$5.80	$2.01
Net Cash Provided by (Used in) Operating Activities ($USD Millions)	$(0.58)	$(1.31)	$0.87
EBITDA Margin %	15.6%	29.8%	18.2%
EBIT Margin %	37.9%	22.7%	(5.2%)
Net Income Margin %	9.4%	23.8%	(25.3%)

Notes: Margins are calculated from cited revenue, operating income, net income, and Adjusted EBITDA figures in the company’s press releases . EPS per unit was not disclosed in the press materials (N/A).

YoY Comparison (Q3 2023 vs Q3 2022)

Metric	Q3 2022	Q3 2023	YoY Change
Revenues ($USD Millions)	$21.48	$11.08	(48.4%)
Adjusted EBITDA ($USD Millions)	$12.26	$2.01	(83.6%)
Net Income (Loss) ($USD Millions)	$(69.35)	$(2.81)	+$66.54M (impairment absent)

Drivers: reduced Hardisty contracted capacity, Casper sale, and lower throughput; Q3 2022 had a $71.6M impairment at Casper .

Revenue Composition by Quarter

Revenue Line ($USD Thousands)	Q1 2023	Q2 2023	Q3 2023
Terminalling services	$19,739	$18,364	$9,785
Terminalling services — related party	$714	$732	$740
Fleet leases — related party	$283	$287	$373
Fleet services — related party	$85	$86	$0
Freight and other reimbursables	$190	$0	$5
Freight and other reimbursables — related party	$115	$2	$174
Total Revenues	$21,126	$19,471	$11,077

KPIs and Balance Sheet Snapshot

KPI / Balance Sheet	Q1 2023	Q2 2023	Q3 2023
Adjusted EBITDA ($USD Millions)	$3.29	$5.80	$2.01
Distributable Cash Flow ($USD Millions)	$(1.63)	$1.12	$0.29
Net Cash Provided by (Used in) Operating Activities ($USD Millions)	$(0.58)	$(1.31)	$0.87
Cash & Cash Equivalents ($USD Millions, quarter-end)	$10.84	$10.29	$8.69
Long-term debt, current portion ($USD Thousands)	$214,206	$195,447	$195,787
Unrestricted cash (as of Nov 2, 2023) ($USD Millions)	—	—	$6.3
Borrowings outstanding (as of Nov 2, 2023) ($USD Millions)	—	—	$195.9

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly distribution	Q3 2023	Suspended since Q1 2023	Continued suspension; lender waivers prohibit distributions without consent	Maintained
Credit facility status	Nov 2023	Negotiating extension/renewal; forbearance through Oct 10 per Aug 8 amendment	Facility matured Nov 2; forbearance extended to Nov 17; no new borrowings or LCs permitted	Lowered flexibility/liquidity
Stroud Terminal agreement	Aug–Oct 2023	3-month trial starting Aug 2023	Trial extended through Jan 2024; potential longer-term deal if successful	Improved commercial visibility
NYSE listing compliance	Q2 2023	Notified below $1.00 continued listing standard on Jul 26	Elevated delisting risk given market cap and price thresholds cited; market cap ~$16.5M, price $0.3996 on Nov 6	Risk persists

No formal revenue/margin/OpEx/tax guidance was issued in Q3 press materials .

Earnings Call Themes & Trends

Note: A Q3 2023 earnings call transcript was not available in the document catalog; Q1 included a call, Q2 and Q3 press materials did not provide transcripts .

Topic	Previous Mentions (Q1, Q2)	Current Period (Q3)	Trend
Liquidity/credit facility	Q1: targeting refinancing ahead of Nov 2023 maturity; suspended distribution to bolster liquidity . Q2: amendment and interim waiver; additional reporting and restrictions .	Facility matured; forbearance through Nov 17; prohibited from new borrowings; covenant non-compliance but not in default during forbearance .	Deteriorating (higher risk)
Hardisty contracted capacity	Q1/Q2: lower contracted capacity pressured revenues; lower pipeline fees consistent with throughput decline .	Continued revenue pressure; lower pipeline fees tied to reduced Hardisty revenues .	Persistent headwind
Stroud Terminal commercialization	Q2: 3-month trial commencing Aug 2023 .	Trial extended through Jan 2024, potential for longer-term agreement .	Improving
Distribution policy	Q1: suspended to support liquidity . Q2: continued suspension .	Continued suspension with lender constraints .	Unchanged
NYSE listing status	Q2: below $1 average price notification .	Elevated delisting risk thresholds cited with current market cap/price metrics .	Elevated risk

Management Commentary

CFO stance on near-term priorities: “We… announced a short-term extension of the forbearance under our Credit Agreement… [and] advancing several ongoing commercial discussions… such as… extension of the terminalling services agreement at the Stroud Terminal.” — CFO Adam Altsuler .
CEO on commercial focus (Q2): “We remained focused on existing and new commercial opportunities at… Hardisty and Stroud… optimistic that this focus will lead to longer-term, take-or-pay commitments…” — CEO Dan Borgen .
CEO on liquidity measures (Q1): “Suspend the Partnership’s quarterly distribution and utilize free cash flow to support… operations and… potentially pay down debt… [positioning] for… refinancing or replacement of our senior secured credit facility later this year.” — CEO Dan Borgen .

Q&A Highlights

No Q3 earnings call transcript was available to review; therefore, no Q&A highlights or clarifications can be provided for Q3 2023 .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2023 EPS/revenue/EBITDA was unavailable at time of retrieval due to S&P Global request limits. As a result, no comparison to estimates can be provided for this quarter.

Key Takeaways for Investors

Liquidity and refinancing risk dominate: facility matured and forbearance extends only through Nov 17, with no new borrowings permitted; unrestricted cash $6.3M as of Nov 2 vs $8.7M at Sep 30 .
Earnings power under pressure: Q3 revenues $11.08M and Adj. EBITDA $2.01M; EBITDA margin fell to 18.2%, reflecting volume and contract headwinds .
Hardisty capacity reduction and Casper sale remain structural drags; pipeline fee and subcontracted rail costs declined but could not offset revenue pressure .
Stroud presents optionality: trial extended through Jan 2024 with potential to convert to longer-term take-or-pay, which could stabilize revenue mix .
Distribution suspension continues and is lender-constrained, signaling ongoing capital preservation and balance sheet prioritization .
Delisting risk is non-trivial given NYSE thresholds and current market metrics; watch price and market cap developments closely .
Absent estimates, the trajectory vs prior quarters is the best gauge: Q2 outperformed Q1 on cash margins, but Q3 retrenched; momentum remains fragile .

USD Partners LP (USDP)·Q3 2023 Earnings Summary