Blueknight Energy Partners L.P.

Good morning. My name is Ariel and I will be the conference operator today. At this time, I would like to welcome everyone to the Blue Knight Earnings conference call for the second 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 Knights Chief Financial Officer. Please go ahead.

Thank you, and good morning. We're pleased to welcome you to Blue Knight's conference call, where we will discuss financial and operating results for the second quarter ended June 30th, 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 certain 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 begin with second quarter highlights and our operational performance before Matt provides additional information on our financial results and key metrics. I will then finish with an update on our growth strategy before we open the lines for Q&A. For the second quarter 2021, I'm excited to report a solid performance for my business, especially relative to a strong performance last year. Matt will go into this in more detail, but I'm very pleased to see the progress we have made on achieving our cost-saving initiatives post our crude oil divestiture and the outperformance of our business compared to the prior year, with incremental improvements in adjusted EBITDA and more meaningful improvements in distributable cash flow, which was up 25% year over year. Furthermore, this performance translated into maintaining top-tier financial metrics with distribution coverage of approximately 1.2 times on all distributions, 2.0 times on common unit distributions, and total leverage of 2.2 times. Operationally, if you recall, during the first half of 2020, we saw a lot of construction demand pulled forward due to COVID lockdowns and fewer vehicles on the road. So volumes were uncharacteristically high. By comparison, first half, 2021 volumes were slightly below the prior year. However, we are encouraged by the fact that first half 2021 volumes are 5% higher than the previous three-year average. In addition, second quarter 2021 volumes are slightly ahead year over year, even despite a more seasonally wet and rainy spring. With this momentum and the favorable solid backlog of road construction projects, we have a more positive outlook for the remainder of the year, absent any unforeseen weather-related or other issues. As for our contract renewals, we've made considerable progress, executing over half of our renewals already that expired this year, as customers anticipate more favorable investment in infrastructure over the coming years. Although a final resolution hasn't been fully achieved at the federal level, we do see sizable increases in funding over the current FAST Act and remain optimistic that a deal gets done this year. At the state level, unexpected budget surpluses are being directed towards much-needed road work, and state lawmakers continue to pursue bills supportive of infrastructure. These positive developments at the federal and state level further support a constructive market backdrop. As we look to our guidance for the year, due to this more favorable outlook, coupled with six months of earnings in excess of last year at this time, we remain confident that we'll meet or exceed our 2021 financial guidance. With that, I'll turn it over to Matt to discuss our second quarter financial performance.