Blueknight Energy Partners L.P.

Good morning. My name is Carl, and I will be your conference operator today. At this time, I would like to welcome everyone to the Blue Knight Earnings Conference Call for the first quarter of 2021. All lines have been placed on mute to prevent any background noise. If you should need assistance during the call, please press star then zero, and an operator will assist you. I would now like to turn the call over to Matt Lewis, Blue Knight's Chief Financial Officer. Please go ahead, sir.

Thank you, and good morning. We're pleased to welcome you to Blue Night's conference call, where we will discuss financial and operating results for the first quarter ended March 31st, 2021. After our prepared remarks today, we will open the lines to address any of your questions. As a reminder, the earnings release, which can be found on our website, includes financial disclosures and reconciliations for non-GAAP financial measures that should help you analyze results. Comments and answers to questions during the call today may include forward-looking statements that refer to management's expectations or future predictions. These statements are made as of the date of this call, and management is under no obligation to update these forward-looking statements in the future. They are subject to risks and uncertainties that could cause actual results to differ from management's expectations. With that, I will now turn it over to our Chief Executive Officer, Andy Woodward.

Thanks, Matt. Good morning to everyone who dialed in. On today's call, I will walk you through highlights during the first quarter and update you on our growth strategy, and then Matt will provide additional details on our financial results and key metrics. I will also like to encourage our investors to go back and listen to our year-end 2020 call just a few months ago, since it is our intent once a year to provide a more thorough update on our strategy, business and where we are in our journey of transforming Blue Knight into a leading pure play infrastructure terminaling company. Now, turning back to our first quarter highlights. As mentioned on our last call, we successfully closed our crude oil business transactions during the first quarter. Post this sale, we now have a much cleaner story and more focused strategy along with a healthier and more supportive balance sheet to manage and grow the business going forward. It also gives me great pleasure to report a solid first quarter from continuing operations. Matt will go into this in more detail, but I'm very encouraged to see our business outperform last year and distributable cash flow up 11% year over year. Furthermore, even despite our earnings tending to be at its lowest level, in the first quarter due to seasonality, we maintain top-tier financial metrics with common distribution coverage of approximately 1.6 times and leverage of 2.1 times. Operationally, during the first quarter, our sites remained fully contracted, and we've made considerable progress on our contract renewals for the year. As of today, our facility's storage levels are modestly full driven by customer perceptions of pricing and anticipated future supply prior to the summer construction season. We are seeing more favorable macroeconomic dynamics as the economy reopens further and refineries continue to increase utilization back to pre-pandemic levels to meet this demand. We are also encouraged by both the federal and state attention in funding proposals to maintain and improve our nation's roadways. Many states are directing unexpected budget surpluses to much needed infrastructure projects. And we believe the current White House bill, similar to prior proposals, would potentially represent a 30 to 40% increase in annual federal spending. Although many details of the bills are under debate, the need for roadway improvement remains. as one in five miles of roads are considered in poor condition. With that said, it's too early in our season to know the impact of these factors on this year versus our more bullish view over the next five years. So, as a result, our outlook for 2021 remains unchanged and in line with the prior year. Turning to our corporate activities, we are tracking well with our cost-saving initiatives associated with the crude oil transaction. I am a student of what gets measured gets improved and set up a disciplined process to track and quantify these savings. As of today, we have realized our overhead savings substantially reduced and consolidated our office rents and captured overall lower insurance premiums due to de-risking our pro forma operations. As a result, we expect to achieve in 2021 the lower end of our synergies range of approximately 1.5 million and expect to achieve the upper end of our range of approximately 2.5 million in 2022. As we prepare for growth and as mentioned on our last call, we plan to continuously evaluate capital allocation opportunities and optimize our best use of cash and liquidity. With this in mind, we executed a repurchase of approximately $5 million of preferred units, which further improves our cost of capital and enhances internal cash flows by eliminating approximately $500,000 of the annual distributions. Now, I'd like to turn your attention to our growth strategy and the progress we're making. We are in the early innings of implementing meaningful changes in three key areas to identify and generate growth. The first being people, the second processes, and the last technology. First, as it should, it starts with our people. Growth for us is not only about progress measured year over year, it's also about the promoting and instituting the right culture and organization to facilitate this growth. We are actively engaging our people at all levels to establish a growth mindset. in creating a collaborative and cross-functional approach to our business development activities. Second is process. We firmly believe you get what you focus on. We have established a regular cadence of meetings with key personnel to ensure we prioritize, review, and track projects in-flight, discuss and challenge strategic alignment and project economics, and fully evaluate and understand risk factors in our own potential downside case. Finally, we are prudently investing our time and resources in technology and tools designed to enhance and track these growth initiatives. Again, by focusing our efforts on getting people, process, and technology right, we believe these actions and steps will yield meaningful results. In just a short amount of time, we are excited about our progress and the growth discussions we're initiating. For instance, We are identifying opportunities to enhance connectivity and processing capability at our sites for our customers, for participating more in M&A activity, generating our own unique discussions with strategic targets, and continuing to explore and evaluate adjacent and complementary markets, such as the growing need for renewable feedstocks and the handling of recycled products in the asphalt process. With that said, I do want to temper expectations as we are in very early stages with these potential opportunities and ask our investors to remain patient as we maintain a disciplined approach to growth. In summary, I'm very happy with our performance this quarter, the milestone we reached with the sale of our crude oil business, the actions we've taken to orient and advance Blue Knight for long-term success. I'll now turn it over to Matt Lewis, our Chief Financial Officer, to discuss our financial performance. Matt?