Q3 2019 Earnings Call
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I would now like to end the conference over to your Speaker today, Mr. Rob Dorn, Vice President Investor Relations and Treasurer. Please go ahead Sir.
Thank you Linda.
I think everyone and welcome to spare parts. This conference call a webcast to review our 29 <unk> third quarter results. Joining me today as you start in the <unk> CEO .
Executive VP and CFO during rebar senior VP and Chief legal officer.
Oh, that's being webcast and we encourage listeners to follow along with the sporting presentation, which is also available on our website. This morning called <unk>.
With their prepared remarks, and then we'll open up the line of question.
Before I turn the call I'd like to remind you that somebody comments made today.
Any forward looking at major enterprise Spear Street expectations estimates judgments projection.
Further somebody information provided the first and non-GAAP measures. Please refer to the third quarter and DNA posted on our and our website yesterday for further details on forward looking information and non-GAAP measures.
I would encourage listeners to review the out yet.
It's more detail on the financial information to the third quarter as we won't be going over each financial metric on today's call. This will allow us to move more quickly into the question and answer period on there now turn the call Gordon.
Thanks, Rob and good morning, everyone. Thanks for joining us this morning, probably called other great third quarter with strong results compared to the prior year quarter.
In the U.S. propane distribution businesses, how they improved results compared to last year.
Let me do do it grew wholesale propane market fundamentals.
Good price manage rather than a lower price environment.
Realized synergies from NGL contribution from Mark talked Kim completed in quarter, 420 team and quarter to 20 like team.
Sure I'll take your make only been profitable operation was hard due to the impact of our S 16, and improve short jump worried resolved upset that far apart a modest increase on par I can buy resolved generally more or less affected all your brother North American <unk> by industry trend then some north America apart from our producer.
Our due to where we didn't know what brand as well as a more diversified products.
All the way the ended the quarter, we closed 32nd retail propane acquisition and North Carolina, and then New Brunswick, So hard 29, p., we'd make for retail propane distribution acquisition board totaling 53 million dollar we continued to see a large number of acquisition opportunities ranging in size.
And he's starting your web and then California. So we'll have a good pipeline of rolled through acquisition as well, that's all going to come up.
And the third quarter. We also made excellent progress during 2019 realized synergy goal.
Related to the NGL acquisition, we've achieved run rate synergy of your West 20 moved over the third quarter and we expect to exit 2020, whether your west 24 billion dollar or run rate synergy improvement.
This way back or.
Are you anticipate team has done an extra incredible job on the integration of NGL, which allowed us to achieve our 2019 goal or run rate synergies.
A superior we're committed to improving or abrasion and reducing costs. We've made good progress on the digital rollout strategy and installing posted started talking I think sensors and they've done your web and 20 like team went early stage of our roll out in the U.S. and then cabins, though we expect to have paid sensor.
Although were 50% of our delivered retail holidays this heating season.
Thanks answer as well as are integrated customer or told my superior at par superior Pearl providing us with a tool to improve or calibration delivered efficiency. The best in class standards and give our customer real time that no other type level usage and expected delivery date.
Our specialty chemicals [laughter] ERICO continued to operate is flat on an above average fight that utilization rate for the industry. The north American caustic soda did not come they got to markets are weaker than 2018 used to reduce export demand and a decrease in new Orleans gas drilling domain.
Oh no anyway.
Well away, we're well positioned to benefit from our price. When this supports our brand by moves from a parking lot product.
In June we announced we're considering to celebrate specialty chemicals business.
There are process is underway, we are unable to provide much of an update at this time, giving it there's a backed up and confidential process.
It's a base, having something to without under process before the around Oh wait we are focused on ensuring we do what that's of interest of our shareholder and puts appear at the best positions racing towards long term strategies.
Now I'll turn the call over too bad to discuss the financial results.
I think like a good morning, everyone.
Third quarter results were 22.3 million higher than the prior year quarter in on an adjusted EBITDA basis.
And to 12.7 million higher pre IDE for are you weren't propane business, it's more seasonal in nature that our Canadian business due to the higher concentration of residential heating costs are.
Typically had negative EBITDA in the third quarter.
We had strong results financially with adjusted EBITDA of 40.2 billion, which was 86% tires in the prior year quarter, primarily due to increased EBITDA from operation in all superior businesses.
The adoption of Iraq, 16, how to 9.6 million impacts our third quarter results as expenses related to operating leases are now reclassified as a reduction in long term liability.
Excluding the impact the buyer for Sixtyv, adjusted EBITDA increased 49% compared to the prior year quarter adjusted EBITDA for the nine month year to date with 347.8 million, including the impact to buy for 16, and 320 million pre IDE for 16.
Compared to 221.3 million in 28 team.
From a debt leverage perspective senior debt credit facility EBITDA at September Thirtyth 2019 was 3.7 times, which is consistent with June Thirtyth 2019, and 0.5 times lower then leverage as at December 31st 2018 due to the seasonally.
Sure of our business leverage ratios are typically lower in the second and third quarter's increased during the fourth quarter related to higher working capital requirements.
Turning now to the individual business result.
Canadian propane distribution EBITDA from operations for the third quarter was 20.9 billion, a 13.2 million increased primarily due to higher gross profit realized synergies from the canwest acquisition any impact to buy for 16.
It was partially offset by lower oil field volume.
Gross profit increased compared to the prior year quarter, primarily due to the wholesale propane market fundamentals contribution from U.P. in sales and marketing initiatives, partially offset by lower other services gross profit.
Wholesale propane market fundamentals benefited from a differential between the pricing it Conway and belvieu compared to admit them in Sarnia.
Average unit margins were 18.4 cents per liter compared to 16.6 cents per year. The prior year quarter, primarily due to improved wholesale propane market fundamentals emerging management initiative.
Their services gross profit in oilfield volumes were lower due to reduced drilling an economic activity in western Canada.
Operating expenses were lower than the prior year due to realize synergies for Ken and a reduction in labor and delivery costs related to the decline in volumes.
Partially offset by increased expenses pretty pretty easy.
Canadian propane distribution EBITDA from operation pretty tricky 19 is anticipated to be higher than 20 team based on year to date result, and the impact from wholesale propane market fundamentals contribution from any incremental synergies from Sandler.
It was partially offset.
By a decrease in retail volumes related to weakness in western Canada in oilfield and commercial activity.
You want propane distribution EBITDA from operations for the third quarter with negative 7 million, which was a 4 million improvement from 2018, primarily due to higher average unit margin contributions from the NGL acquisition and tuck in acquisition.
Partially offset by higher operating expenses.
The NGL acquisition closed on July 2018, 'cause third quarter. In 2019 has had more days of contribution from NGL, resulting in increased volumes gross profit in expenses.
The average unit margins were 31.9 cents per liter compared to 24.3 cents per liter in the prior year quarter, primarily due to lower wholesale propane prices.
Active management of pricing in a low commodity price environment, and sales and marketing initiatives related to integration of acquisition.
Other services gross profit was consistent with the prior year.
Operating expenses were higher due the NGL and the tuck in.
Partially offset by realized synergies from NGL.
You are propane distribution EBITDA from operations for 2019 is anticipated to be higher than 20 team based on year to date result, and the impact from the full year contribution from Ngls the tuck in acquisition.
Incremental synergies from NGL higher average unit margins related to wholesale propane market fundamentals.
Well, if the impact of adopting I for 16.
Turning now to specialty chemicals.
EBITDA from operations for the third quarter was 39.7 billion, an increase of 4.2 million compared to the prior year quarter, driven primarily by the impact of I've for 16.
And higher sodium chlorate gross profit, partially offset by lower core alkali gross profit.
Specialty chemicals tweaking Nike EBITDA from operation is anticipated to be higher than 28 team. After a year to date based on year to date result.
Any impact of adopting our accuracy scheme.
Pre sodium chlorate selling prices in sales volumes, partially offset by lower core alkali result.
In the fourth quarter, we expect consistent modestly weaker caustic soda market fundamentals and weaker hydrochloric acid market fundamentals related to reduced oil and gas demand.
Lastly, the corporate result, Andy adjusted EBITDA leverage guidance.
Corporate costs were modestly higher than the prior year quarter realized losses on foreign exchange hedging contracts were 1.2 million lower due to the increase in the average foreign exchange Hendry in a third quarter of 29 team.
Interest expense was 26.5 million 4.5 million higher than the prior year quarter due to the increased average debt and effective interest rate.
As well as the impact from high for 16.
That was higher due primarily to the tuck in acquisitions completed in Q4 2018.
Q2 29.
Current cash income taxes were modestly higher than the prior year quarter.
We are confirming or 29 team adjusted EBITDA guidance range of 490 million to 530 million, which imply the midpoint of 510 million.
The low end of the range account for warmer than normal weather reduced economic activity in Western Canada, and further weakness in North American caustic soda in hydrochloric acid market.
The high end of the range accounted for colder than normal weather consistent hotel wholesale propane market fundamentals increased drilling activity in western Canada, and improve north American caustic soda in hydrochloric acid market.
We're also confirming our senior debt to credit facility EBITDA leverage range for December 31st 2019, a 3.6 time to four time due to the seasonality of our business leveraged typically goes out related to the buildup of working capital for both Q4 in Q1.
Leverage could also trends of the hiring of the range at wholesale propane prices increased significantly and we typically courts in acquisitions before year end with that I'd like to turn the call over to QNX.
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Our first question comes from Jacob bout, what's the Ibcs. Your line is now open.
Morning.
On the Jacob.
So you're now saying that a ended the year for.
Sale update.
And.
You can't say much but can you comment on on the interest level on the sales are better or worse than expected and.
Tools anywhere close to what you're looking for.
Yeah, I cannot talk about the multiple but the process wasn't very large was run by a New York Barry because we wanted to know that there was a limited chemicals.
And just remove later than kind of though so what does it real full process with the.
People interested in around the world basis.
Okay.
Thanks Bye-bye.
The plants to visit so why there's representation you had.
Our sand and detail those global multi product.
So.
There's no way.
Oh, Im sorry to do a deal and do it faster quicker, but sometime it takes longer and where they're good points out where there's been some good then threats.
I think we'd been disciplined that.
We'll go to say ER visits ratios, we feel more comfortable that it's more short term now so.
Let me say next quarter in orders all have you started working right.
We're getting to a without position now where we expect something shortly.
In the past it serves as a which we've never deal and I know you have been involved in the banking world with deal should.
They always have a good until that is the answer it could be good towards the couldn't be more difficult than for the woman everything is good March or gone.
We hope that.
And then I was hoping in the near friction.
Okay.
Thank you.
Second question is on the sustainability of the strong emergency use.
HM.
Maybe looking out thanks.
Pain and chemicals.
Assuming chemicals, just better next and then I know you comment on that came from.
<unk>.
You can talk to the sustainability.
Oh pardon Beth.
Oh, we're having some medical or detail.
So, although you with Sars virus sustainable beverage holidays, and all we bought a company that from an intelligence pricing segmentation a marketing approach, we bring a much better sophisticated approach a coupon.
Their margin, which are anticipated to 20 minutes of energy.
I feel very confident there Canadian propane business Oh, it's been the story for many many years, we're always able to tweak it somewhat come up.
When some positive on the old so far higher than Oh, well, that's a good bit to give you additional callers on that.
Yeah, I think from a propane perspective, we didnt have strong as we mentioned wholesale market fundamentals. It involves that is the ball the tile area. If you think about last year, we would have been almost looking at you know differentials from a trough perspective, where this year from our perspective, it's Dave.
Typically a peak so from that perspective, as we look going forward. It is all the time when things can change quickly with those market fundamentals.
From an overall perspective, if you want to think about the U.S. business from a margin you know we still look at those margins being roughly in the range of 25 cents, a U.S., which is somewhere between 30 to 35 cents Canadian and we think that's a good number.
Going forward from the Canadian propane purchase back does.
You know our view, where we're sitting a little higher this quarter than we would've been on a year over year basis from a whole year perspective, 14 to 17 cents is a good range. If you want to think about Q4 based on what we're seeing where both Q4 in Q1 tends to have higher margin thinking that started in a 15.
16 that range.
Overall going forward.
And on the chemicals side and you know you would've seen there was some weakness on the Chlor alkali side and again that tends to be volatiles. So from that perspective going forward. You know that's one where our view is we would expect going forward you know experiencing volatility.
[laughter] okay.
Yes, so the tank sensor program the digital strategy a in propane.
Are you seeing much margin lift from that.
It really is oh not to add to that all reports a word.
Formation that we have in the data, we heard trust them or snow pack. So it's not just on getting that we have the merger propane in the thing is really extraordinary many words it brings us to fill rate improvements will more efficiency of trust to deliver in service. It brings us a less interest.
Sure.
I Love Ward County that we always on attrition and gain by but like the telecom industry, the attrition or truck and.
As widely carbon after system or trashed now the numbers I'm now they can make us information to connect the dots on the pain. So it's kind of a multifaceted that good story.
We're a very aggressive in nowhere discovering a.
Or 50% the word bhagyam and kinda, though and it's very little in during the summer where the solving a lot more in the states im thinking or break them. The winter tolerable servicing customers filling those things. So really good story of the I've already probably approve haven't been that's there.
The first few years as to whether it was breach was.
I'd like to the idea of keeping it from our competitors.
Right now at all.
Right.
Were there and.
It's a good story and we're going to keep going out.
Thank you yeah. Thank you.
Our next question comes from Nelson Ng with RBC capital markets. Your line is now open.
Great. Thanks, just a quick question given that yield.
You are looking to provide a sales updates might enter this year I think last quarter, you mentioned the capacity expansion at Buckingham and felt that stuff I would just checking to see if.
Those.
Like the capital program has begun on.
On those two projects I think they'll Dallas is probably next year about Buckingham was supposed to be the sheer yep.
Joe can be fair, so schedule, but is well done.
The connect cloud is the because the works going on there were three efficiency above Oh.
Like most companies are flat.
And Valdosta <unk> two for next year do work.
And all of that we continued to run with a company like we're going to oldest whatever she will always be and that's been improving their business never stopped doing that that's where capital.
The business.
We're just as much as here over the past years whether.
We have a good business with good management, Thailand, we didn't want to short change that business, because we're looking at selling it.
So those are good three programs in words.
Parts of it is all we did dawn and be Hawkins.
Okay. Thanks, and then my next question relates to the a small tuck in acquisitions last month.
Given the small size like where they've done at the lower end of your kind of typical acquisition multiple range.
[noise], yeah, there are bringing us so there isn't you sold the red good synergies and we don't overpay, we've been a discipline and acquisition.
We didnt pay a bit more for the NGL intend to west because we have lots of opportunity, which we've proven.
Would've been 24 month, Jim the synergy away, it's giving us.
Platform to build bigger and better we have a pipeline that's really a robust.
I mean, there's been a think there's more coming and then versus the past nine to 12 month, because there's a good one works we don't overpay Oh, we understand the shareholder value, we don't want or some other thing too cheap and if we don't get the Roger [laughter] don't so.
We don't want to be.
Thank you watch where business.
And when net net the.
There was that it was rather are very good them, good synergy and good and they're very good execution.
No promoters up little bit by telling you something I hope you all know what.
The execution for the if you look at the nine years took this three year, it's probably in the best of class, a buying and integrating them doing to drop.
Okay. Thanks, and then just one last question I guess given that you do have a lot of seasonal workers on the propane side.
Could you just comments on the like one I'm, just wondering whether that tight U.S. labor market.
I was impacted your business at all.
And if you're seeing any a wage pressures there no. It's funny because we have the discussion whatever Gordon is today one of the board member asked a question, which I guess remedy Finley and there was a great question, because we hear it everywhere I think what we're living through as we have sixtym either when you're a prepaid business is taking the propane business.
I mean people if I did read all graders and technician.
And they really drives large roxanne. So it's another very hard hard hard lifting job. It's not long distance. If you don't come about buying to do your JV is are you. They do a gopal that's fine and your part a good team every day, there's a hub in the morning MDB. So.
We really don't see what we hear about the truck drivers and.
And then into summer time, we'd like start to apply the stayed the same business model, we haven't Colorado, reducing labor force for the bunch of their summer.
And we've got a somewhat surprised a lot of the.
And we keep their benefits when do we do happen. This summer and they are very positive feedback from one for you. So you know I'm really working your phone might benefit a lot you know what and when it comes to going down in the summer make Phantom I'm good with that so.
You know that issue for us.
We're not spending just because of the none of them hard towards bargains jobs versus others.
Okay. Thanks for the color I'll leave it there.
Got it thank you.
Our next question comes from David Neumann with <unk>. Your line is now open.
Good morning, what are your name or.
Not did not they're not the over plant, but just on the on the sales process. It's November 14th and I would assume as you know something toward the a ended the year that it would be more likely I like a 2020 close [laughter] does that kind of run into the management bandwidth I guess during during the busy period and I guess, the offset would be.
The it's more likely that they're not that generally that the other propane or small players who wouldn't sell until after the season anyways correct.
I was talking about the I'm and am I kind of follow deserves a I think you're right usually they stop and the.
All winter, but right now they haven't really.
Couple of good interested party or that we're working on with them I think next good luck it'd be good on the process for the chemicals side I'm not sure understood. Your question because it doesn't affect all the work from a month to month basis, maybe better yeah, I think baby the way to think about it.
On a having very different businesses, there's different team as we work through the detail of deals et cetera that would be working on the various deal and if you want to take it from a busy season perspective et cetera, you know chemicals is very stable throughout the year Yep Yep Yep stable operation.
So what do you think about the individuals involved in those types of pros Bassett I guess, they know harder or easier is not going in this period of time and for the others involved which would be more from a corporate perspective.
The reality is you know what we what we need you to get everything that.
I'm not the nail it down but it does it looked like a 2020 close to you guys.
Isn't that happens [laughter].
I really love I think that's one yeah I think it's obviously given where we are in the process we have.
I mentioned that we hope to announce something before the end of the year I'm talking about closing at this point, just a little bit premature.
And this on just on ongoing operations the fundamentals here, obviously quite a good quarter and basket you know from the from the our margin expansion and things like that margin management of the 18.4 cents in Canada and 31.9 in U.S. I would assume it's a couple of pennies on each side that you were able to extract out of that.
Yeah, that's a good way of thinking about it.
Okay and part of it is not just the are but is it not also a case, where when you have a low wholesale propane environment, you've got some speaking it's on the retail side that the margin a man management there that's what you're alluding to and does that looks like he could continue into the fourth quarter.
Yeah, I think maybe think about it didn't different pieces in a lower propane environment as we talked before I mean, I'll take it back up towards fundamental business model and our fundamental business model is that our margins get generated by the active the distribution of the propane. So that's the key driver for residential cost.
The words, there instances, where when propane pricing or low around the edges. We can pick up some incremental margin yeah. Yeah for that maybe the best way to think about it is between both Canada and the U.S. sorted in the range. When you have propane pricing as low as it is today, probably has an impact in the range of it.
The 5 million I'm not both you actually Canada combined.
Other piece is when it comes to further this dislocation of the market, which is the differential impact that they're weather propane pricing is low or high you can still have.
You know I did say larger or smaller opportunities.
Isn't that differential pardon.
There's also arbitrage our opportunities that exist as well, but again, that's a different the price is not necessarily lower prices right now congestion points et cetera. So the first one does it really.
Is it reflected because of wholesale market fundamentals necessarily I'm going to say, that's a little bit more operational and pricing on a residential variable customer.
I'm not sure if that helps but it's still that's not guaranteed that that's where I thought I thought it was but I just want to make sure that was on the right track and and if you look at the chemicals markets in general I know, you're very buffered by being inland and and et cetera, but do you think the caustic weakness could creep up revert yeah.
Some point here and as well so hydrochloric acid Mark as you pretty diversified, but you're also very insulated.
Overall, but how are you thinking about that.
Yes.
Me from our perspective that Chlor alkali market could definitely be volatiles.
You know barge traffic in the wafer from the Gulf Coast I'm, certainly can have an impact about will decrease some of that floating up towards our market.
One of the reason why are we didnt change or narrow our guidance range is because you know both the volatility that we could potentially see in that exists in the chlor alkali market as well as the volatility frankly on propane fundamental markets and weather et cetera, but that is one of the reasons why are rate.
There's a little wider at this point that it might otherwise be.
Okay. Thanks from some good set of results.
Two.
Sure.
Our next question comes from Patrick any with National Bank Financial Your line is open.
Good morning, Beth I think you just answered my first question here on on the EBITDA guidance range being unchanged.
You noted some of the.
Potential offsetting factors, but just to maybe zone in on.
You know what looks to be a strong crop drying season down in the Midwest right. Now can you just maybe provide a bit more color on the wholesale opportunities that you're team might be seeing or [noise].
Any logistical challenges there.
Yeah. So from you know from our perspective with the crop drying et cetera, it's quite clear that it can may supply tighter our demand demand stronger from that perspective. So we're really looking at it and say number one the most important thing from our perspective since you're.
We have security of supply. So our team is very focused on ensuring that that occurs.
Certainly historically, you know with its strong crop drying and then moving into potentially very cold weather, which happened in the polar vortex.
There were concerns around supply security of supply we believe that the market itself is much better prepared now for that so and we are certainly focused and ensuring that we have security of supply with being different pieces. You are correct. It does sometime provide arbitrage opportunity, which our team will look at.
And where we can take advantage of that we will take advantage.
<unk>.
And then I guess as a follow up you don't see other tailwinds don't materialize or sorry, the other headwinds don't materialize.
Then the stars to align year with weather and logistics for the propane business and if it's an out of the park. This winter.
Could that potentially provide enough excess cash flow to accelerate your debt repayment and perhaps cause you to rethink selling chemicals altogether.
Or do you simply have a price in mind for the business and.
You don't see that being influenced by what goes on within propane.
Oh, well do the Oh, so far enough will do the other part D.
Strategically.
Oh, we hope to sell the company goal, if we decide to sell the can be cool for good reason.
Turning to though would tend with what we've done with the business base business. You look of the history, you look at NGL, which we've proven.
The fourth largest distributor the saved our business model.
Time, we charge propane company, where improve its 25%.
Why do we do a ton of that it's like.
Really special when you think of it being and then just read that somewhat not sure.
That's a.
Do you have such a business model that we continued to improve.
We have additional improvement project can work that are really.
Quite digital than.
Got doing formation to organize work and then the next level or efficiency. When you have developed for a business model like that that is and the industry really really the best them so much more efficient.
Hi, good talking about so we said strategically or the good [laughter], but is there.
Well raise the solid right then you have the.
To this either was discussing talked a lot less for us because of original played.
It's our extraordinary there mid long term to say, that's good or a cash the tubeless that this do more of that leads to more of that every time, we buy one we improve it the whereby a one year 18 months 20, 624 billion, bill and sort of improvement and NGL. So we've got to do that no.
I'm certainly not Sally we want to sell it and we're marching down too. So I, let them, we hope to ever got communication that that's regard than the and no short through the <unk>.
We're also very disciplined and you all been there ever want to do the up into them and they understand the last mile has reached with the goal and very express will let me put see because of buyers could decide to Cleveland gain a d. and even though they came in the news we're talking to a level of their value with Hollywood Acorda business.
It happened to Watson do Tpd.
And I.
Throw them out and we sold 100 million more labor.
I hope, we don't have to do that it's not fun to be go that way, but we have to be cautious of.
Getting to the last game of the of the deal and we hope is working well, it's working well with all that happens well, we're not afraid to face us if somebody wants to play game up there.
Yeah. The only thing that I will add in addition for the two items that you were fundamentally flagging that improved market fundamentals in colder weather. If you want to think about it in overall contact is probably you're looking at 10 to 20 million. So it's not really is impactful on leverage over.
At all.
Got it.
No strategic decision.
What about [laughter].
Okay. That's great appreciate the comments thank you.
<unk>.
Our next question comes from Joel Jackson with BMO capital markets. Your line is now open.
Hi, good morning.
<unk>.
Cory have you started getting some discussions for some renewals on contracts for 2020, maybe talk about what corn pricing might look like a into next year.
Yes, we had and then it's a good year for us because you know.
I'm trying to one to two years over our 2030 years in India for them.
So this year, we only have about 20% under review.
And so far with we see as we can.
Biggest costs, our hardware cold cuts electricity of energy and buyer with we see right now with the capacity to be able to cover or cost increase so where it went the good position.
Mark This is 95% kept best suits utilization the harsh it's been the this three the since I've been here at way.
Clothing, Saskatoon than the large during low cost plans in Qubec and Oh, thus those because boot.
So no competition <unk>.
So sorry, so what you're seeing so far is on the price increases you're getting are matching the.
Electricity other inflation cost.
Yes.
Okay and then.
Well I'm inquiry, but also I guess, especially Chem sales, maybe a two parter here you've said in the past a couple of times you would not consider breaking up the business to tell you know.
Planned or commodity by commodity so the first part B I see that that's still the case and then when you look at the potential buyers at this asset considering some of the issues encore a concentration that happen what the Conexus deal if it's fair to say that occurring Macquarie.
Producers not one of the likely acquirers here. Thanks.
So I hope that going into Rosenfeld upstream to answer that sure off [laughter], obviously I understand the process is confidential so we can't really.
Talk about potential buyers at this point.
That was answer [laughter].
And thank you very much [laughter], where they can go up.
[noise], that's where my Dear ladies and gentlemen that its star then one if you'd like to ask a question at this time.
Our next question comes the line up a lifestyle schools with industrial Alliance. Your line is now open.
Good morning.
Good morning.
I have one question is almost everything else has been asked a lot going through at this time.
Good questions last year at this time, you introduced a 29 teen EBITDA guidance I'm wondering I'm not that it's super critical but if we can expect that and what the timing might be.
Yeah, our intention would be to provide 2020 guidance.
As we.
Communicate the result of Twinkie 19, so in February so as we have the Q4 results to provide guidance going forward and our view is it'll be more meaningful because we'll have a line of sight on the chemicals process on it. In addition to that gets to flag Ari pension going forward it would be.
To provide guidance along with the Q4 results, which is similar to our peers.
Great. That's the only question that I have and.
Very good fell in line with what I was thinking.
Very good question. Thanks.
Thank you.
Our next question comes the line of reveal Osborne with Canaccord. Your line is now open.
When you guys. Thank you for hosting the call can you speak a little bit about the caustic soda inventory levels that you guys are seeing right. Now are they can have the started to come down or are they still pretty.
Stable.
[noise] anything above that.
Bob you know frame for us so for the industry for the industry. Okay.
Yeah, you know from our perspective, certainly caustic soda with some of the changes in the market is currently well supply.
You know fundamentally with Al you know workday only being at 75% now where I think the industry would've thought it would already be at 100% and now the forecast is valued or take won't be at 100% until I'm 2020.
God 2020.
2020, Q1, two like so from that perspective, you still have you know well supply. So as a result of that I mean, there had been some headwind this pressure on caustic pricing.
From a volume perspective, it needs for us we've seen that it's been very basically been flat.
From that perspective again, you know I identified that we aren't necessarily always in impacted from some of these changes because the regional nature of our of our business.
Makes sense. Thank you for that and then I know, it's too early to call the weather with respected the propane division.
But can you speak about how the weather has been so far and what the forecasts are for for the remainder of the quarter.
We don't give or the.
Number one quarter as you know but Ah.
Thank you for that question is very old [laughter]. Thank you guys.
[noise]. Our next question comes from Steve Hansen with Raymond James Your line is now open.
Yeah, Hey, guys very I'd put it late in the whole goods for your Mercury line up of course reading, but Oh.
He had here I caught your early comments about the process. So for Stoke dropped a little bit on announcement, but does that disruptor change any of your ongoing M&A discussions you might be having on the other side.
On the Blake redeploying proceeds that had just a follow because out of <unk> described that pipeline Cowen looks at the moment. Thanks, Jeff.
Pipelines very good that the.
It's not changing or Oh.
There are lot of the views are well underway or video views that takes longer and that somebody asked earlier, it's true that a good mid sized deal would not look I didnt. This when three of the ought to look up the summer.
He was an event of sale, so even though we do have a little bit more.
For the acquisition and the three four months, which is really not the case.
There are all kind of a then up large I've got the mid sized one so for many many were not stopping we're communicating I'm sure a good seller without this time too as we said listen you're less for the next next robot because like to finish with her can make old deals.
Doesn't change our game and all that stuff for the back then.
There wasn't a a larger and larger deal would probably would consider that might bring a different.
Situation, but it's not the case for the moment.
Well better than anything comes to mind.
No I don't have anything to add on top line.
Alright. Thank you okay very good thanks, Chris.
We.
And I'm showing no further questions in queue at this time I'd like to turn the call back to Mr. day shutdown for closing remarks.
I guess so.
One of the thank all three employees and management for the superior third quarter Drake sharpened sure you dishing old paying two or aren't good team goes worked so hard doing their job. They said they ignore thing.
Process, that's very demanding and.
Problems of course shows a lot to work and also to do that would have a lot of people the ongoing yard. So I think more than in the past. Thank you all for participating Youll wish all the good the holiday season, so really but maybe I disagree.
The first the sand so I've a good one and.
Well, they keep doing or bets and I'm thinking I'm good enterprise for all our shareholders and everybody following it off.
Thank you again.
[noise], ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.