ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 2016
OR
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period from ___________ to ________
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Delaware
(State or other jurisdiction of incorporation or organization)
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75-1256622
(I.R.S. Employer
Identification No.)
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1650 Hwy 6 S, Suite 190
Sugar Land, TX
(Address of principal executive offices)
|
77478
(Zip code)
|
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42
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(1)
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TREC – Trecora Resources
|
(2)
|
TOCCO – Texas Oil & Chemical Co. II, Inc. – Wholly owned subsidiary of TREC and parent of SHR and TC
|
(3)
|
SHR – South Hampton Resources, Inc. – Petrochemical segment and parent of GSPL
|
(4)
|
GSPL – Gulf State Pipe Line Co, Inc. – Pipeline support for the petrochemical segment
|
(5)
|
TC – Trecora Chemical, Inc. – Specialty wax segment
|
(6)
|
AMAK – Al Masane Al Kobra Mining Company – Mining equity investment – 33% ownership
|
(7)
|
PEVM – Pioche Ely Valley Mines, Inc. – Inactive mine - 55% ownership
|
(8)
|
Acquisition – October 1, 2014, purchase of TC
|
• |
Combining product offerings and entering into new markets in which we are not experienced;
|
• |
Convincing customers and distributors that the transaction will not diminish client service standards or business focus, preventing customers and distributors from deferring purchasing decisions or switching to other suppliers (which could result in our incurring additional obligations in order to address customer uncertainty), and coordinating sales, marketing and distribution efforts;
|
• |
Minimizing the diversion of management attention from ongoing business concerns;
|
• |
Persuading employees that business cultures are compatible, maintaining employee morale and retaining key employees, engaging with employee works councils representing an acquired company’s non-U.S. employees, integrating employees into the Company, correctly estimating employee benefit costs and implementing restructuring programs;
|
• |
Coordinating and combining administrative, manufacturing, and other operations, subsidiaries, facilities and relationships with third parties in accordance with local laws and other obligations while maintaining adequate standards, controls and procedures;
|
• |
Achieving savings from supply chain integration; and
|
• |
Managing integration issues shortly after or pending the completion of other independent transactions.
|
Average Price
|
Spot Price as of
|
Percentage
|
||||||||||
For 2014-2016
|
12/31/16
|
Increase (Decrease)
|
||||||||||
Gold per ounce
|
$
|
1,224.96
|
$
|
1,159.10
|
(5.38
|
)%
|
||||||
Silver per ounce
|
$
|
17.29
|
$
|
16.24
|
(6.07
|
)%
|
||||||
Copper per pound
|
$
|
2.60
|
$
|
2.50
|
(3.85
|
)%
|
||||||
Zinc per pound
|
$
|
0.94
|
$
|
1.16
|
23.40
|
%
|
Zone
|
Proven Reserves
(Tonnes)
(000’s)
|
Copper
(%)
|
Zinc
(%)
|
Gold
(g/t) |
Silver
(g/t) |
||||||||||
Saadah
|
448
|
1.5
|
3.7
|
0.8
|
21.0
|
||||||||||
Al Houra
|
29
|
0.8
|
3.8
|
0.7
|
21.0
|
||||||||||
Moyeath
|
-
|
-
|
-
|
-
|
-
|
||||||||||
Total
|
477
|
1.4
|
3.7
|
.8
|
21.0
|
||||||||||
Zone
|
Probable Reserves
(Tonnes)
(000’s)
|
Copper
(%)
|
Zinc
(%)
|
Gold
(g/t) |
Silver
(g/t) |
||||||||||
Saadah
|
5,193
|
1.2
|
3.4
|
0.8
|
23.0
|
||||||||||
Al Houra
|
1,894
|
0.9
|
3.8
|
1.2
|
39.0
|
||||||||||
Moyeath
|
702
|
0.8
|
7.2
|
1.0
|
55.0
|
||||||||||
Total
|
7,789
|
1.1
|
3.9
|
0.9
|
29.0
|
||||||||||
Total proven and probable reserves
|
8,266
|
||||||||||||||
Less production through December 31, 2016
|
2,371
|
||||||||||||||
Remaining proven and probable reserves
|
5,895
|
Average Price in USD
|
||||||||||||
2012-2014
|
2013-2015
|
2014-2016
|
||||||||||
Gold per ounce
|
$
|
1,448.33
|
$
|
1,278.98
|
$
|
1,224.96
|
||||||
Silver per ounce
|
$
|
24.67
|
$
|
19.53
|
$
|
17.29
|
||||||
Copper per pound
|
$
|
3.25
|
$
|
2.98
|
$
|
2.60
|
||||||
Zinc per pound
|
$
|
0.88
|
$
|
0.91
|
$
|
0.94
|
Year
|
Mine Head Grade
|
Mill Throughput
|
||||||||||
%Cu
|
%Zn
|
dmt
|
||||||||||
2011
|
1.26
|
3.02
|
9,460
|
|||||||||
2012
|
1.18
|
3.39
|
399,892
|
|||||||||
2013
|
1.48
|
3.19
|
699,316
|
|||||||||
2014
|
1.22
|
3.15
|
670,812
|
|||||||||
2015
|
1.11
|
3.69
|
591,419
|
|||||||||
2016
|
-
|
-
|
-
|
Year
|
Copper Concentrate
|
Zinc Concentrate
|
||||||||||||||||||||||||||||||
dmt
|
%Cu
|
%Zn
|
Recovery
|
dmt
|
%Zn
|
%Cu
|
Recovery
|
|||||||||||||||||||||||||
2011
|
443
|
16.51
|
7.51
|
61.64
|
377
|
40.69
|
3.56
|
53.64
|
||||||||||||||||||||||||
2012
|
15,944
|
23.91
|
5.46
|
80.62
|
20,738
|
50.03
|
1.16
|
76.54
|
||||||||||||||||||||||||
2013
|
35,140
|
25.20
|
4.73
|
85.68
|
33,460
|
49.82
|
0.83
|
74.62
|
||||||||||||||||||||||||
2014
|
28,476
|
24.20
|
4.31
|
84.24
|
31,600
|
51.02
|
0.70
|
76.26
|
||||||||||||||||||||||||
2015
|
24,218
|
22.70
|
5.13
|
84.12
|
35,447
|
48.46
|
0.62
|
78.63
|
||||||||||||||||||||||||
2016
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Year
|
Copper Concentrate
|
Zinc Concentrate
|
||||||||||||||||||||||
dmt
|
%Cu
|
Value received
(in USD millions)
|
dmt
|
%Zn
|
Value received
(in USD millions)
|
|||||||||||||||||||
2011
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
2012
|
5,488
|
23.51
|
$
|
6.9
|
15,193
|
47.53
|
$
|
8.7
|
||||||||||||||||
2013
|
35,908
|
23.86
|
$
|
80.8
|
38,430
|
47.79
|
$
|
24.2
|
||||||||||||||||
2014
|
25,691
|
24.20
|
$
|
42.3
|
29,326
|
50.52
|
$
|
21.0
|
||||||||||||||||
2015
|
26,378
|
23.50
|
$
|
34.6
|
24,547
|
49.68
|
$
|
16.0
|
||||||||||||||||
2016
|
-
|
-
|
-
|
15,845
|
48.28
|
$
|
9.5
|
NYSE
|
||||||||
High
|
Low
|
|||||||
Fiscal Year Ended December 31, 2016
|
||||||||
Fourth Quarter ended December 31, 2016
|
$
|
14.55
|
$
|
9.75
|
||||
Third Quarter ended September 30, 2016
|
$
|
11.74
|
$
|
9.81
|
||||
Second Quarter ended June 30, 2016
|
$
|
12.03
|
$
|
8.17
|
||||
First Quarter ended March 31, 2016
|
$
|
12.33
|
$
|
8.75
|
||||
Fiscal Year Ended December 31, 2015
|
||||||||
Fourth Quarter ended December 31, 2015
|
$
|
14.96
|
$
|
11.79
|
||||
Third Quarter ended September 30, 2015
|
$
|
16.50
|
$
|
11.50
|
||||
Second Quarter ended June 30, 2015
|
$
|
15.48
|
$
|
11.00
|
||||
First Quarter ended March 31, 2015
|
$
|
15.25
|
$
|
11.36
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Revenues
|
$
|
212,399
|
$
|
241,976
|
$
|
289,643
|
$
|
236,227
|
$
|
222,858
|
||||||||||
Net Income
|
19,428
|
18,598
|
15,571
|
19,498
|
10,321
|
|||||||||||||||
Net Income Per Share-Diluted
|
0.78
|
0.74
|
0.63
|
0.79
|
0.42
|
|||||||||||||||
EBITDA
|
41,694
|
39,639
|
29,814
|
32,505
|
20,704
|
|||||||||||||||
Adjusted EBITDA
|
31,008
|
47,317
|
33,027
|
25,020
|
21,430
|
|||||||||||||||
Total Assets (at December 31)
|
292,099
|
257,791
|
230,782
|
143,652
|
120,358
|
|||||||||||||||
Current Portion of Long-Term Debt
(at December 31)
|
10,145
|
8,061
|
6,728
|
1,397
|
1,497
|
|||||||||||||||
Total Long-Term Debt Obligations
(at December 31)
|
73,107
|
73,169
|
72,430
|
11,827
|
14,224
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Net Income
|
$
|
19,428
|
$
|
18,598
|
$
|
15,571
|
$
|
19,498
|
$
|
10,321
|
||||||||||
Interest expense
|
1,981
|
2,232
|
1,042
|
520
|
547
|
|||||||||||||||
Derivative (gains) losses on interest rate swap
|
4
|
(15
|
)
|
378
|
301
|
359
|
||||||||||||||
Depreciation and amortization
|
9,777
|
9,060
|
5,676
|
4,039
|
3,573
|
|||||||||||||||
Income tax expense
|
10,504
|
9,764
|
7,147
|
8,147
|
5,904
|
|||||||||||||||
EBITDA
|
41,694
|
39,639
|
29,814
|
32,505
|
20,704
|
|||||||||||||||
Share-based compensation
|
2,552
|
2,353
|
2,141
|
1,215
|
515
|
|||||||||||||||
Bargain purchase gain on BASF acquisition
|
(11,549
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Equity in (earnings) losses of AMAK
|
1,479
|
5,325
|
1,072
|
(4,703
|
)
|
211
|
||||||||||||||
Gain from additional equity issuance by AMAK
|
(3,168
|
)
|
-
|
-
|
(3,997
|
)
|
-
|
|||||||||||||
Adjusted EBITDA
|
$
|
31,008
|
$
|
47,317
|
$
|
33,027
|
$
|
25,020
|
$
|
21,430
|
||||||||||
Net Income
|
$
|
19,428
|
$
|
18,598
|
$
|
15,571
|
$
|
19,498
|
$
|
10,321
|
||||||||||
Bargain purchase gain on BASF acquisition
|
(11,549
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Equity in (earnings) losses of AMAK
|
1,479
|
5,325
|
1,072
|
(4,703
|
)
|
211
|
||||||||||||||
Gain from additional equity issuance by AMAK
|
(3,168
|
)
|
-
|
-
|
(3,997
|
)
|
-
|
|||||||||||||
Total of adjustments
|
(13,238
|
)
|
5,325
|
1,072
|
(8,700
|
)
|
211
|
|||||||||||||
Taxes at statutory rate of 35%
|
4,633
|
(1,864
|
)
|
(375
|
)
|
3,045
|
(74
|
)
|
||||||||||||
Tax effected adjustments
|
(8,605
|
)
|
3,461
|
697
|
(5,655
|
)
|
137
|
|||||||||||||
Adjusted Net Income
|
$
|
10,823
|
$
|
22,059
|
$
|
16,268
|
$
|
13,843
|
$
|
10,458
|
December 31, 2016
|
December 31, 2015
|
December 31, 2014
|
|
Days sales outstanding in accounts receivable
|
38.2
|
29.4
|
35.6
|
Days sales outstanding in inventory
|
30.2
|
23.8
|
16.1
|
Days sales outstanding in accounts payable
|
22.9
|
12.2
|
12.0
|
Days of working capital
|
45.5
|
41.0
|
39.8
|
2016
|
2015
|
2014
|
||||||||||
Net cash provided by (used in)
|
(in thousands)
|
|||||||||||
Operating activities
|
$
|
28,514
|
$
|
39,565
|
$
|
23,205
|
||||||
Investing activities
|
(40,509
|
)
|
(31,294
|
)
|
(88,942
|
)
|
||||||
Financing activities
|
1,761
|
1,846
|
66,635
|
|||||||||
Increase (decrease) in cash and equivalents
|
$
|
(10,234
|
)
|
$
|
10,117
|
$
|
898
|
|||||
Cash and cash equivalents
|
$
|
8,389
|
$
|
18,623
|
$
|
8,506
|
·
|
Net income for 2016 included a non-cash equity in loss from AMAK of $1.5 million and a $3.2 million gain from additional equity issuance by AMAK as compared to equity in losses from AMAK $5.3 million in 2015;
|
·
|
Net income for 2016 included a bargain purchase gain from the BASF acquisition of $11.5 million as compared to 2015 which had no gain;
|
·
|
Trade receivables increased approximately $2.8 million in 2016 (due to an increase in wax sales in December and longer payment terms for some foreign customers because of increased shipping times) as compared to a decrease of approximately $8.8 million (due to a 27.1% decrease in the average per gallon selling price of petrochemical products) in 2015;
|
·
|
Prepaid expenses and other assets increased $1.0 million in 2016 (primarily due to license fees for the advanced reformer unit being constructed) as compared to a decrease of $0.9 million in 2015 (primarily due to expensing of loan fees and disbursement of the prepayment of a lawsuit settlement); and
|
·
|
Other liabilities decreased $0.2 million in 2016 (due to the recognition of revenue from customer funding of capital projects) as compared to an increase of $2.2 million in 2015 (due to customer funding of capital projects for custom processing).
|
·
|
Net income for 2016 included a non-cash depreciation and amortization charge of $9.8 million as compared to 2015 which included a non-cash depreciation and amortization charge of $9.1 million;
|
·
|
Net income for 2016 included non-cash deferred income tax benefits of $8.7 million as compared to $5.6 million in 2015;
|
·
|
Income taxes receivable decreased $3.7 million in 2016 (primarily due to overpayments being applied to 2016 estimated taxes) as compared to an increase of $7.2 million in 2015 (primarily due to estimated tax payments being made prior to the update of tax laws passed in December 2015);
|
·
|
Inventory increased $2.1 million in 2016 (due to lower sales volume) as compared to an increase of $3.0 million in 2015 (due to TC’s increase in raw material receipts from their primary supplier which translated into additional finished goods production); and
|
·
|
Accounts payable and accrued liabilities increased $3.2 million in 2016 (primarily due to increased construction expenditures) as compared to a decrease of $2.4 million in 2015 (primarily due to construction projects being completed during the year).
|
·
|
Net income for 2015 included a non-cash equity in loss from AMAK of $5.3 million as compared to equity in loss from AMAK $1.1 million in 2014;
|
·
|
Net income for 2015 included a non-cash depreciation and amortization charge of $9.1 million (due to the incorporation of TC’s charges for a full year) as compared to 2014 which included a charge of $5.7 million (included only one quarter of TC’s charges);
|
·
|
Net income for 2015 included a non-cash deferred income tax charge of $5.6 million as compared to 2014 which included a deferred income tax benefit of $1.9 million;
|
·
|
Trade receivables decreased approximately $8.8 million in 2015 (due to a 27.1% decrease in the average per gallon selling price) as compared to an increase of approximately $3.4 million in 2014 (due to a 9.9% increase in volume sold during the fourth quarter and receivables acquired from the Acquisition);
|
·
|
Prepaid expenses and other assets decreased $1.2 million in 2015 (primarily due to expensing of loan fees and disbursement of the prepayment of a lawsuit settlement) as compared to an increase of $1.4 million in 2014 (primarily due to prepaid loan fees associated with the debt from the Acquisition, prepayment of a lawsuit settlement, and prepaids acquired from the Acquisition); and
|
·
|
Other liabilities increased $2.2 million in 2015 (due to customer funding of capital projects for custom processing) as compared to an increase of $0.1 million in 2014 (due to deferred revenue acquired from the Acquisition offset by recognition of deferred revenue during 2014).
|
·
|
Income tax receivable increased $7.2 million in 2015 (primarily due to estimated tax payments being made prior to the update of tax laws passed in December 2015) as compared to a decrease of $0.1 million in 2014;
|
·
|
Inventory increased $3.0 million in 2015 (due to TC’s increase in raw material receipts from their primary supplier which translated into additional finished goods production) as compared to a decrease of $2.6 million in 2014 (due to a 31.9% decrease in cost per gallon); and
|
·
|
Accounts payable and accrued liabilities decreased $2.4 million in 2015 (primarily due to construction projects being completed during the year) as compared to an increase of $1.8 million in 2014 (primarily due to the working capital adjustment payable for the Acquisition).
|
2016
|
2015
|
Change
|
%Change
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Petrochemical Product Sales
|
$
|
173,262
|
$
|
212,431
|
$
|
(39,169
|
)
|
(18.4
|
%)
|
|||||||
Processing Fees
|
8,766
|
5,802
|
2,964
|
51.1
|
%
|
|||||||||||
Gross Revenue
|
$
|
182,028
|
$
|
218,233
|
$
|
(36,205
|
)
|
(16.6
|
%)
|
|||||||
Volume of petrochemical sales (thousand gallons)
|
76,372
|
86,908
|
(10,536
|
)
|
(12.1
|
%)
|
||||||||||
Volume of prime product sales (thousand gallons)
|
58,441
|
64,103
|
(5,662
|
)
|
(8.8
|
%)
|
||||||||||
Cost of Sales
|
$
|
146,159
|
$
|
165,448
|
$
|
(19,289
|
)
|
(11.7
|
%)
|
|||||||
Gross Margin
|
19.7
|
%
|
24.2
|
%
|
(4.5
|
%)
|
||||||||||
Total Operating Expense*
|
58,536
|
56,659
|
1,877
|
3.3
|
%
|
|||||||||||
Natural Gas Expense*
|
3,301
|
4,190
|
(889
|
)
|
(21.2
|
%)
|
||||||||||
Operating Labor Costs*
|
16,094
|
16,124
|
(30
|
)
|
(0.2
|
%)
|
||||||||||
Transportation Costs*
|
24,138
|
24,836
|
(698
|
)
|
(2.8
|
%)
|
||||||||||
General & Administrative Expense
|
9,172
|
9,092
|
80
|
0.9
|
%
|
|||||||||||
Depreciation**
|
5,825
|
4,484
|
1,341
|
29.9
|
%
|
|||||||||||
Capital Expenditures
|
$
|
22,948
|
$
|
24,358
|
(1,410
|
)
|
(5.8
|
%)
|
2015
|
2014
|
Change
|
%Change
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Petrochemical Product Sales
|
$
|
212,431
|
$
|
277,623
|
$
|
(65,192
|
)
|
(23.5
|
%)
|
|||||||
Processing Fees
|
5,802
|
6,722
|
(920
|
)
|
(13.7
|
%)
|
||||||||||
Gross Revenue
|
$
|
218,233
|
$
|
284,345
|
$
|
(66,112
|
)
|
(23.3
|
%)
|
|||||||
Volume of petrochemical sales (thousand gallons)
|
86,908
|
82,785
|
4,123
|
5.0
|
%
|
|||||||||||
Volume of prime product sales (thousand gallons)
|
64,103
|
62,159
|
1,944
|
3.1
|
%
|
|||||||||||
Cost of Sales
|
$
|
165,448
|
$
|
240,695
|
$
|
(75,247
|
)
|
(31.3
|
%)
|
|||||||
Gross Margin
|
24.2
|
%
|
15.4
|
%
|
8.8
|
%
|
||||||||||
Total Operating Expense*
|
56,659
|
54,515
|
2,144
|
3.9
|
%
|
|||||||||||
Natural Gas Expense*
|
4,190
|
6,362
|
(2,172
|
)
|
(34.1
|
%)
|
||||||||||
Operating Labor Costs*
|
16,124
|
14,478
|
1,646
|
11.4
|
%
|
|||||||||||
Transportation Costs*
|
24,836
|
23,176
|
1,660
|
7.2
|
%
|
|||||||||||
General & Administrative Expense
|
9,092
|
10,090
|
(998
|
)
|
(9.9
|
%)
|
||||||||||
Depreciation**
|
4,484
|
4,064
|
420
|
10.3
|
%
|
|||||||||||
Capital Expenditures
|
$
|
24,358
|
$
|
13,987
|
10,371
|
74.1
|
%
|
2016
|
2015
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Product Sales
|
$
|
20,319
|
$
|
15,506
|
$
|
4,813
|
31.0
|
%
|
||||||||
Processing Fees
|
10,052
|
8,237
|
1,815
|
22.0
|
%
|
|||||||||||
Gross Revenue
|
$
|
30,371
|
$
|
23,743
|
$
|
6,628
|
27.9
|
%
|
||||||||
Volume of wax sales (thousand pounds)
|
33,891
|
24,268
|
9,623
|
39.7
|
%
|
|||||||||||
Cost of Sales
|
$
|
26,338
|
$
|
19,519
|
$
|
6,819
|
34.9
|
%
|
||||||||
Gross Margin
|
13.3
|
%
|
17.8
|
%
|
(4.5
|
%)
|
||||||||||
General & Administrative Expense
|
4,818
|
4,138
|
680
|
16.4
|
%
|
|||||||||||
Depreciation and Amortization*
|
3,908
|
4,550
|
(642
|
)
|
(14.1
|
%)
|
||||||||||
Capital Expenditures
|
$
|
17,547
|
$
|
6,889
|
$
|
10,658
|
154.7
|
%
|
2015
|
2014
|
|||||||
Product Sales
|
$
|
15,506
|
$
|
3,242
|
||||
Processing Fees
|
8,237
|
2,056
|
||||||
Gross Revenue
|
23,743
|
5,298
|
||||||
Cost of Sales*
|
19,519
|
5,444
|
||||||
General & Administrative Expense
|
4,138
|
958
|
||||||
Depreciation and Amortization
|
4,550
|
1,612
|
||||||
Capital Expenditures
|
$
|
6,889
|
$
|
780
|
2016
|
2015
|
Change
|
%Change
|
|||||||||||||
(in thousands)
|
||||||||||||||||
General & Administrative Expense
|
$
|
6,445
|
$
|
7,011
|
$
|
(566
|
)
|
(8.1
|
%)
|
|||||||
Depreciation
|
43
|
25
|
18
|
72.0
|
%
|
|||||||||||
Equity in losses of AMAK
|
1,479
|
5,325
|
(3,846
|
)
|
(72.2
|
%)
|
||||||||||
Gain from additional equity issuance by AMAK
|
(3,168
|
)
|
-
|
(3,168
|
)
|
100
|
%
|
2015
|
2014
|
Change
|
%Change
|
|||||||||||||
(in thousands)
|
||||||||||||||||
General & Administrative Expense
|
$
|
7,011
|
$
|
6,413
|
$
|
598
|
9.3
|
%
|
||||||||
Depreciation
|
25
|
-
|
25
|
100.0
|
%
|
|||||||||||
Equity in losses of AMAK
|
5,325
|
1,072
|
4,253
|
396.7
|
%
|
2015
|
2014
|
Variance
|
||||||||||
Ore tons processed
|
591,419
|
670,812
|
(79,393
|
)
|
||||||||
Concentrate to the port
|
||||||||||||
Copper
|
24,218
|
28,402
|
(4,184
|
)
|
||||||||
Zinc
|
35,447
|
32,515
|
2,932
|
|||||||||
59,665
|
60,917
|
(1,252
|
)
|
|||||||||
Shipments
|
||||||||||||
Copper
|
26,378
|
25,691
|
687
|
|||||||||
Zinc
|
24,547
|
29,326
|
(4,779
|
)
|
||||||||
50,925
|
55,017
|
(4,092
|
)
|
Payments due by period
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less than
1 year |
1-3 years
|
3-5 years
|
More than 5 years
|
|||||||||||||||
(thousands of dollars)
|
||||||||||||||||||||
Operating Lease Obligations
|
$
|
21,374
|
$
|
3,595
|
$
|
6,734
|
$
|
6,370
|
$
|
4,675
|
||||||||||
Purchase Obligations
|
5,328
|
5,328
|
-
|
-
|
-
|
|||||||||||||||
Long-Term Debt Obligations
|
84,000
|
10,417
|
73,583
|
-
|
-
|
|||||||||||||||
Total
|
$
|
110,702
|
$
|
19,340
|
$
|
80,317
|
$
|
6,370
|
$
|
4,675
|
(a)
|
Disclosure Controls and Procedures.
|
(b)
|
Management’s Annual Report on Internal Control over Financial Reporting.
|
·
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and Board of Directors; and
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
(c)
|
Attestation Report of the Registered Public Accounting Firm.
|
Exhibit
Number
|
Description
|
3(a)
|
- Certificate of Incorporation of the Company as amended through the Certificate of Amendment filed with the Delaware Secretary of State on May 22, 2014 (incorporated by reference to Exhibit 3(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 001-33926))
|
3(b)
|
- Restated Bylaws of the Company dated August 1, 2014 (incorporated by reference to Exhibit 3(b) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 001-33926))
|
10(a)*
|
- Retirement Awards Program dated January 15, 2008 between Trecora Resources and Hatem El Khalidi (incorporated by reference to Exhibit 10(h) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (file No. 001-33926))
|
10(b)*
|
- Arabian American Development Company Stock and Incentive Plan adopted April 3, 2012 (incorporated by reference to Exhibit A to the Company’s Form DEF 14A filed April 25, 2012 (file No. 001-33926))
|
10(c)
|
- Articles of Association of Al Masane Al Kobra Mining Company, dated July 10, 2006 (incorporated by reference to Exhibit 10(m) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))
|
10(d)
|
- Bylaws of Al Masane Al Kobra Mining Company (incorporated by reference to Exhibit 10(n) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))
|
10(e)
|
- Letter Agreement dated August 5, 2009, between Trecora Resources and the other Al Masane Al Kobra Company shareholders named therein (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 27, 2009 (file No. 001-33926))
|
10(f)
|
- Limited Guarantee dated October 24, 2010, between Trecora Resources and the Saudi Industrial Development Fund (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 27, 2010 (file No. 001-33926))
|
10(g)
|
- Amended and Restated Credit Agreement dated October 1, 2014, between Texas Oil & Chemical Co. II, Inc. and certain subsidiaries and Bank of America, N.A. as administrative agent (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on October 3, 2014 (file No. 001-33926))
|
10(h)
|
- Stock Purchase Agreement dated September 19, 2014, between Trecora Resources, Texas Oil & Chemical Co. II, Inc. SSI Chusei, Inc. and Schumann/Steier Holdings, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on September 25, 2014 (file No. 001-33926))
|
14
|
- Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 0-6247))
|
Exhibit
Number
|
Description
|
16
|
- Letter re change in certifying accountant (incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K dated June 21, 2010 (File No. 001-33926))
|
21
|
- Subsidiaries (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (File 001-33926))
|
23.1
|
- Consents of Independent Registered Public Accounting Firms
|
24
|
- Power of Attorney (set forth on the signature page hereto).
|
31.1
|
- Certification of Chief Executive Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934
|
31.2
|
- Certification of Chief Financial Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934
|
32.1
|
- Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
- Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
- XBRL Instance Document
|
101.SCH
|
- XBRL Taxonomy Schema Document
|
101.CAL
|
- XBRL Taxonomy Calculation Linkbase Document
|
101.LAB
|
- XBRL Taxonomy Label Linkbase Document
|
101.PRE
|
- XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
- XBRL Taxonomy Extension Definition Linkbase Document
|
(b)
|
Exhibits required by Regulation 601 S-K
|
(c)
|
Financial Statement Schedules
|
Signature
|
Title
|
/s/ Simon Upfill-Brown
Simon Upfill-Brown
|
President, Chief Executive Officer and Director
(principal executive officer)
|
/s/ Sami Ahmad
Sami Ahmad
|
Chief Financial Officer
(principal financial officer) |
/s/ Connie Cook
Connie Cook
|
Vice President of Accounting and Compliance
(principal accounting officer) |
/s/ Nicholas Carter
Nicholas Carter
|
Chairman of the Board and Director
|
/s/ John R. Townsend
John R. Townsend
|
Director
|
/s/ Pamela R. Butcher
Pamela R. Butcher
|
Director
|
/s/ Joseph P. Palm
Joseph P. Palm
|
Director
|
/s/ Gary K. Adams
Gary K. Adams
|
Director
|
/s/ Karen A. Twitchell
Karen A. Twitchell
|
Director
|
INDEX TO FINANCIAL STATEMENTS
|
Page
|
F-2
|
|
F-3
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-8
|
|
F-10
|
|
INDEX TO FINANCIAL STATEMENT SCHEDULES
|
|
F-38
|
|
F-39
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
8,389
|
$
|
18,623
|
||||
Trade receivables, net (Note 6)
|
22,193
|
19,474
|
||||||
Prepaid expenses and other assets (Note 7)
|
3,511
|
2,392
|
||||||
Inventories (Note 8)
|
17,871
|
15,804
|
||||||
Deferred income taxes (Note 17)
|
1,615
|
2,116
|
||||||
Taxes receivable
|
3,983
|
7,672
|
||||||
Total current assets
|
57,562
|
66,081
|
||||||
PLANT, PIPELINE, AND EQUIPMENT – AT COST
|
194,486
|
143,471
|
||||||
LESS ACCUMULATED DEPRECIATION
|
(54,477
|
)
|
(46,564
|
)
|
||||
PLANT, PIPELINE, AND EQUIPMENT, NET (Note 9)
|
140,009
|
96,907
|
||||||
GOODWILL (Note 10)
|
21,798
|
21,798
|
||||||
OTHER INTANGIBLE ASSETS, net (Note 10)
|
22,669
|
24,549
|
||||||
INVESTMENT IN AMAK (Note 11)
|
49,386
|
47,697
|
||||||
MINERAL PROPERTIES IN THE UNITED STATES (Note 12)
|
588
|
588
|
||||||
OTHER ASSETS
|
87
|
171
|
||||||
TOTAL ASSETS
|
$
|
292,099
|
$
|
257,791
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
LIABILITIES
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$
|
13,306
|
$
|
8,090
|
||||
Current portion of derivative instruments (Notes 5 and 22)
|
58
|
118
|
||||||
Accrued liabilities (Note 14)
|
2,017
|
4,062
|
||||||
Current portion of post-retirement benefit (Note 23)
|
316
|
294
|
||||||
Current portion of long-term debt (Note 13)
|
10,145
|
8,061
|
||||||
Current portion of other liabilities
|
870
|
2,050
|
||||||
Total current liabilities
|
26,712
|
22,675
|
||||||
LONG-TERM DEBT, net of current portion (Note 13)
|
73,107
|
73,169
|
||||||
POST- RETIREMENT BENEFIT, net of current portion (Note 23)
|
897
|
649
|
||||||
DERIVATIVE INSTRUMENTS, net of current portion (Notes 5 and 22)
|
-
|
59
|
||||||
OTHER LIABILITIES, net of current portion
|
2,309
|
2,351
|
||||||
DEFERRED INCOME TAXES (Note 17)
|
24,698
|
16,503
|
||||||
Total liabilities
|
127,723
|
115,406
|
||||||
COMMITMENTS AND CONTINGENCIES (Note 15)
|
||||||||
EQUITY
|
||||||||
Common Stock ‑ authorized 40 million shares of $.10 par value; issued 24.5 million in 2016 and 2015 and outstanding 24.2 million in 2016 and 2015
|
2,451
|
2,416
|
||||||
Additional Paid-in Capital
|
53,474
|
50,662
|
||||||
Common Stock in Treasury, at cost 0.3 million shares
|
(284
|
)
|
-
|
|||||
Retained Earnings
|
108,446
|
89,018
|
||||||
Total Trecora Resources Stockholders’ Equity
|
164,087
|
142,096
|
||||||
Noncontrolling interest
|
289
|
289
|
||||||
Total equity
|
164,376
|
142,385
|
||||||
TOTAL LIABILITIES AND EQUITY
|
$
|
292,099
|
$
|
257,791
|
2016
|
2015
|
2014
|
||||||||||
(thousands of dollars)
|
||||||||||||
Revenues
|
||||||||||||
Petrochemical and product sales
|
$
|
193,581
|
$
|
227,937
|
$
|
280,866
|
||||||
Processing fees
|
18,818
|
14,039
|
8,777
|
|||||||||
212,399
|
241,976
|
289,643
|
||||||||||
Operating costs and expenses
|
||||||||||||
Cost of petrochemical, product sales, and processing (including depreciation and amortization of $9,016, $8,335, and $5,116, respectively)
|
172,497
|
184,967
|
246,140
|
|||||||||
Gross Profit
|
39,902
|
57,009
|
43,503
|
|||||||||
General and Administrative Expenses
|
||||||||||||
General and administrative
|
20,434
|
20,243
|
17,461
|
|||||||||
Depreciation
|
761
|
725
|
560
|
|||||||||
21,195
|
20,968
|
18,021
|
||||||||||
Operating income
|
18,707
|
36,041
|
25,482
|
|||||||||
Other income (expense)
|
||||||||||||
Interest expense
|
(1,985
|
)
|
(2,217
|
)
|
(1,042
|
)
|
||||||
Losses on cash flow hedge reclassified from OCI
|
-
|
-
|
(378
|
)
|
||||||||
Bargain purchase gain from acquisition
|
11,549
|
-
|
-
|
|||||||||
Equity in earnings (loss) of AMAK (Note 11)
|
(1,479
|
)
|
(5,325
|
)
|
(1,072
|
)
|
||||||
Gain from additional equity issuance by AMAK (Note 11)
|
3,168
|
-
|
-
|
|||||||||
Miscellaneous expense
|
(28
|
)
|
(137
|
)
|
(272
|
)
|
||||||
11,225
|
(7,679
|
)
|
(2,764
|
)
|
||||||||
Income before income tax expense
|
29,932
|
28,362
|
22,718
|
|||||||||
Income tax expense
|
10,504
|
9,764
|
7,147
|
|||||||||
Net income
|
19,428
|
18,598
|
15,571
|
|||||||||
Net loss attributable to Noncontrolling Interest
|
-
|
-
|
-
|
|||||||||
Net income attributable to Trecora Resources
|
$
|
19,428
|
$
|
18,598
|
$
|
15,571
|
||||||
Net income per common share
|
||||||||||||
Basic earnings per share (dollars)
|
$
|
0.80
|
$
|
0.76
|
$
|
0.64
|
||||||
Diluted earnings per share (dollars)
|
$
|
0.78
|
$
|
0.74
|
$
|
0.63
|
||||||
Weighted average number of common
|
||||||||||||
shares outstanding
|
||||||||||||
Basic
|
24,284
|
24,370
|
24,188
|
|||||||||
Diluted
|
24,982
|
25,181
|
24,896
|
2016
|
2015
|
2014
|
||||||||||
(thousands of dollars)
|
||||||||||||
NET INCOME
|
$
|
19,428
|
$
|
18,598
|
$
|
15,571
|
||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX
|
||||||||||||
Unrealized holding gains arising during period
|
-
|
-
|
744
|
|||||||||
Less: reclassification adjustment included in net income
|
-
|
-
|
378
|
|||||||||
OTHER COMPREHENSIVE INCOME , NET OF TAX (Note 22)
|
-
|
-
|
366
|
|||||||||
COMPREHENSIVE INCOME
|
$
|
19,428
|
$
|
18,598
|
$
|
15,937
|
||||||
TRECORA RESOURCES STOCKHOLDERS
|
||||||||||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||||||||||
Additional
|
Other
|
Non-
|
||||||||||||||||||||||||||||||||||
Common Stock
|
Paid-In
|
Treasury
|
Comprehensive
|
Retained
|
Controlling
|
Total
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Loss
|
Earnings
|
Total
|
Interest
|
Equity
|
||||||||||||||||||||||||||||
(thousands)
|
(thousands of dollars)
|
|||||||||||||||||||||||||||||||||||
JANUARY 1, 2014
|
23,832
|
$
|
2,383
|
$
|
46,064
|
-
|
$
|
(366
|
)
|
$
|
54,849
|
$
|
102,930
|
$
|
289
|
$
|
103,219
|
|||||||||||||||||||
Stock options
|
||||||||||||||||||||||||||||||||||||
Issued to Directors
|
-
|
-
|
330
|
-
|
-
|
-
|
330
|
-
|
330
|
|||||||||||||||||||||||||||
Issued to Employees
|
-
|
-
|
1,555
|
-
|
-
|
-
|
1,555
|
-
|
1,555
|
|||||||||||||||||||||||||||
Issued to Former Director
|
-
|
-
|
97
|
-
|
-
|
-
|
97
|
-
|
97
|
|||||||||||||||||||||||||||
Warrants
|
-
|
-
|
79
|
-
|
-
|
-
|
79
|
-
|
79
|
|||||||||||||||||||||||||||
Common Stock
|
||||||||||||||||||||||||||||||||||||
Issued to Directors
|
88
|
9
|
(8
|
)
|
-
|
-
|
-
|
1
|
-
|
1
|
||||||||||||||||||||||||||
Issued to Employees
|
55
|
5
|
165
|
-
|
-
|
-
|
170
|
-
|
170
|
|||||||||||||||||||||||||||
Other Comprehensive Income
|
-
|
-
|
-
|
-
|
366
|
-
|
366
|
-
|
366
|
|||||||||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
-
|
15,571
|
15,571
|
-
|
15,571
|
|||||||||||||||||||||||||||
DECEMBER 31, 2014
|
23,975
|
$
|
2,397
|
$
|
48,282
|
$
|
-
|
$
|
-
|
$
|
70,420
|
$
|
121,099
|
$
|
289
|
$
|
121,388
|
|||||||||||||||||||
Stock options
|
||||||||||||||||||||||||||||||||||||
Issued to Directors
|
-
|
-
|
274
|
-
|
-
|
-
|
274
|
-
|
274
|
|||||||||||||||||||||||||||
Issued to Employees
|
-
|
-
|
1,274
|
-
|
-
|
-
|
1,274
|
-
|
1,274
|
|||||||||||||||||||||||||||
Issued to Former Director
|
-
|
-
|
97
|
-
|
-
|
-
|
97
|
-
|
97
|
|||||||||||||||||||||||||||
Restricted common stock
|
||||||||||||||||||||||||||||||||||||
Issued to Employees
|
14
|
-
|
587
|
-
|
-
|
-
|
587
|
-
|
587
|
|||||||||||||||||||||||||||
Issued to Directors
|
-
|
-
|
43
|
-
|
-
|
-
|
43
|
-
|
43
|
|||||||||||||||||||||||||||
Warrants
|
5
|
1
|
(1
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Common stock
|
||||||||||||||||||||||||||||||||||||
Issued to Directors
|
100
|
10
|
(10
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Issued to Employees
|
64
|
8
|
116
|
-
|
-
|
-
|
124
|
-
|
124
|
|||||||||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
-
|
18,598
|
18,598
|
-
|
18,598
|
|||||||||||||||||||||||||||
DECEMBER 31, 2015
|
24,158
|
$
|
2,416
|
$
|
50,662
|
$
|
-
|
$
|
-
|
$
|
89,018
|
$
|
142,096
|
$
|
289
|
$
|
142,385
|
|||||||||||||||||||
Stock options
|
||||||||||||||||||||||||||||||||||||
Issued to Directors
|
-
|
-
|
173
|
-
|
-
|
-
|
173
|
-
|
173
|
|||||||||||||||||||||||||||
Issued to Employees
|
-
|
-
|
1,234
|
-
|
-
|
-
|
1,234
|
-
|
1,234
|
|||||||||||||||||||||||||||
Issued to Former Director
|
-
|
-
|
48
|
-
|
-
|
-
|
48
|
-
|
48
|
|||||||||||||||||||||||||||
Restricted common stock
|
||||||||||||||||||||||||||||||||||||
Issued to Directors
|
-
|
-
|
254
|
-
|
-
|
-
|
254
|
-
|
254
|
|||||||||||||||||||||||||||
Issued to Employees
|
-
|
-
|
783
|
-
|
-
|
-
|
783
|
-
|
783
|
|||||||||||||||||||||||||||
Common stock
|
||||||||||||||||||||||||||||||||||||
Issued to Directors
|
13
|
2
|
58
|
-
|
-
|
-
|
60
|
-
|
60
|
|||||||||||||||||||||||||||
Issued to Employees
|
51
|
3
|
(8
|
)
|
16
|
-
|
-
|
11
|
-
|
11
|
||||||||||||||||||||||||||
Treasury stock transferred from TOCCO to TREC
|
-
|
30
|
270
|
(300
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
-
|
19,428
|
19,428
|
19,428
|
||||||||||||||||||||||||||||
DECEMBER 31, 2016
|
24,222
|
$
|
2,451
|
$
|
53,474
|
$
|
(284
|
)
|
$
|
-
|
$
|
108,446
|
$
|
164,087
|
$
|
289
|
$
|
164,376
|
2016
|
2015
|
2014
|
||||||||||
(thousands of dollars)
|
||||||||||||
Operating activities
|
||||||||||||
Net income attributable to Trecora Resources
|
$
|
19,428
|
$
|
18,598
|
$
|
15,571
|
||||||
Adjustments to reconcile net income
|
||||||||||||
of Trecora Resources to net cash provided by operating
activities:
|
||||||||||||
Depreciation
|
7,896
|
7,177
|
5,205
|
|||||||||
Amortization of intangible assets
|
1,880
|
1,883
|
471
|
|||||||||
Unrealized (gain) loss on derivative instruments
|
(119
|
)
|
(381
|
)
|
376
|
|||||||
Share-based compensation
|
2,552
|
2,353
|
2,141
|
|||||||||
Deferred income taxes
|
8,697
|
5,567
|
(1,903
|
)
|
||||||||
Postretirement obligation
|
271
|
7
|
8
|
|||||||||
Bargain purchase gain from acquisition
|
(11,549
|
)
|
-
|
-
|
||||||||
Equity in loss of AMAK
|
1,479
|
5,325
|
1,072
|
|||||||||
Gain from additional equity issuance by AMAK
|
(3,168
|
)
|
-
|
-
|
||||||||
Bad debt expense
|
90
|
-
|
-
|
|||||||||
Amortization of loan fees
|
272
|
272
|
68
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase) decrease in trade receivables
|
(2,809
|
)
|
8,797
|
(3,380
|
)
|
|||||||
(Increase) decrease in taxes receivable
|
3,689
|
(7,238
|
)
|
137
|
||||||||
(Increase) decrease in inventories
|
(2,067
|
)
|
(2,989
|
)
|
2,587
|
|||||||
(Increase) decrease in prepaid expenses and other assets
|
(1,022
|
)
|
935
|
(337
|
)
|
|||||||
(Increase) decrease in other assets
|
-
|
2
|
(1,092
|
)
|
||||||||
Increase (decrease) in other liabilities
|
(174
|
)
|
2,151
|
90
|
||||||||
Increase (decrease) in accounts payable and accrued liabilities
|
3,168
|
(2,399
|
)
|
1,836
|
||||||||
Increase (decrease) in accrued liabilities in Saudi Arabia
|
-
|
(495
|
)
|
355
|
||||||||
Net cash provided by operating activities
|
28,514
|
39,565
|
23,205
|
|||||||||
Investing activities
|
||||||||||||
Additions to plant, pipeline and equipment
|
(38,484
|
)
|
(31,247
|
)
|
(14,766
|
)
|
||||||
Acquisition of TC, Inc., net of cash of $107 purchased in 2014
|
-
|
(47
|
)
|
(74,712
|
)
|
|||||||
Acquisition of B Plant
|
(2,011
|
)
|
-
|
-
|
||||||||
Advances to AMAK, net
|
(14
|
)
|
-
|
536
|
||||||||
Net cash used in investing activities
|
(40,509
|
)
|
(31,294
|
)
|
(88,942
|
)
|
||||||
Financing Activities
|
||||||||||||
Issuance of common stock
|
11
|
46
|
91
|
|||||||||
Additions to long-term debt
|
8,000
|
15,000
|
87,200
|
|||||||||
Repayment of long-term debt
|
(6,250
|
)
|
(13,200
|
)
|
(20,656
|
)
|
||||||
Net cash provided by in financing activities
|
1,761
|
1,846
|
66,635
|
2016
|
2015
|
2014
|
||||||||||
(thousands of dollars)
|
||||||||||||
Net increase (decrease) in cash and cash equivalents
|
(10,234
|
)
|
10,117
|
898
|
||||||||
Cash and cash equivalents at beginning of year
|
18,623
|
8,506
|
7,608
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
8,389
|
$
|
18,623
|
$
|
8,506
|
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash payments for interest
|
$
|
2,545
|
$
|
2,103
|
$
|
995
|
||||||
Cash payments (net of refunds) for taxes
|
$
|
(1,630
|
)
|
$
|
11,428
|
$
|
8,959
|
|||||
Supplemental disclosure of non-cash items:
|
||||||||||||
Other liabilities for capital expansion amortized to
depreciation expense
|
$
|
1,047
|
$
|
972
|
$
|
1,649
|
||||||
Estimated earnout liability (Note 3)
|
$
|
733
|
$
|
-
|
$
|
-
|
||||||
Unrealized gain on interest rate swap, net of tax
expense
|
$
|
-
|
$
|
-
|
$
|
366
|
a)
|
We have a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and
|
b)
|
We have an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probable that one or more future events will occur, triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated.
|
Cash paid
|
$
|
2,011
|
||||||
Estimated earnout liability
|
733
|
|||||||
Purchase Price
|
$
|
2,744
|
||||||
Fixed assets at FMV
|
||||||||
Land
|
980
|
|||||||
Site improvements
|
30
|
|||||||
Buildings
|
1,350
|
|||||||
Production equipment
|
11,933
|
|||||||
14,293
|
||||||||
Bargain purchase gain
|
$
|
11,549
|
Level 1 inputs
|
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.
|
Level 2 inputs
|
Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.
|
Level 3 inputs
|
Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity.
|
Fair Value Measurements Using
|
||||||||||||||||
December 31, 2016
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
(thousands of dollars)
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Interest rate swap
|
$
|
58
|
$
|
-
|
$
|
58
|
$
|
-
|
Fair Value Measurements Using
|
||||||||||||||||
December 31, 2015
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
(thousands of dollars)
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Interest rate swap
|
$
|
177
|
$
|
-
|
$
|
177
|
$
|
-
|
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Trade receivables
|
$
|
22,493
|
$
|
19,684
|
||||
Less allowance for doubtful accounts
|
(300
|
)
|
(210
|
)
|
||||
Trade receivables, net
|
$
|
22,193
|
$
|
19,474
|
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Prepaid license
|
$
|
1,919
|
$
|
-
|
||||
Prepaid catalyst
|
187
|
455
|
||||||
Prepaid insurance
|
797
|
1,182
|
||||||
Other prepaid expenses and assets
|
608
|
755
|
||||||
Total
|
$
|
3,511
|
$
|
2,392
|
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Raw material
|
$
|
3,627
|
$
|
2,905
|
||||
Work in process
|
12
|
56
|
||||||
Finished products
|
14,232
|
12,843
|
||||||
Total inventory
|
$
|
17,871
|
$
|
15,804
|
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Platinum catalyst
|
$
|
1,612
|
$
|
1,612
|
||||
Land
|
5,376
|
4,577
|
||||||
Plant, pipeline and equipment
|
154,107
|
128,302
|
||||||
Construction in progress
|
33,391
|
8,980
|
||||||
Total plant, pipeline and equipment
|
194,486
|
143,471
|
||||||
Less accumulated depreciation
|
(54,477
|
)
|
(46,564
|
)
|
||||
Net plant, pipeline and equipment
|
$
|
140,009
|
$
|
96,907
|
December 31, 2016
|
||||||||||||
Intangible assets subject to amortization
(Definite-lived)
|
Gross
|
Accumulated
Amortization
|
Net
|
|||||||||
Customer relationships
|
$
|
16,852
|
$
|
(2,527
|
)
|
$
|
14,325
|
|||||
Non-compete agreements
|
94
|
(43
|
)
|
51
|
||||||||
Licenses and permits
|
1,471
|
(285
|
)
|
1,186
|
||||||||
Developed technology
|
6,131
|
(1,379
|
)
|
4,752
|
||||||||
24,548
|
(4,234
|
)
|
20,314
|
|||||||||
Intangible assets not subject to amortization
(Indefinite-lived)
|
||||||||||||
Emissions Allowance
|
197
|
-
|
197
|
|||||||||
Trade name
|
2,158
|
-
|
2,158
|
|||||||||
Total
|
$
|
26,903
|
$
|
(4,234
|
)
|
$
|
22,669
|
December 31, 2015
|
||||||||||||
Intangible assets subject to amortization
(Definite-lived)
|
Gross
|
Accumulated
Amortization
|
Net
|
|||||||||
Customer relationships
|
$
|
16,852
|
$
|
(1,404
|
)
|
$
|
15,448
|
|||||
Non-compete agreements
|
94
|
(24
|
)
|
70
|
||||||||
Licenses and permits
|
1,471
|
(160
|
)
|
1,311
|
||||||||
Developed technology
|
6,131
|
(766
|
)
|
5,365
|
||||||||
24,548
|
(2,354
|
)
|
22,194
|
|||||||||
Intangible assets not subject to amortization
(Indefinite-lived)
|
||||||||||||
Emissions Allowance
|
197
|
-
|
197
|
|||||||||
Trade name
|
2,158
|
-
|
2,158
|
|||||||||
Total
|
$
|
26,903
|
$
|
(2,354
|
)
|
$
|
24,549
|
2017
|
2018
|
2019
|
2020
|
2021
|
Thereafter
|
|||||||||||||||||||
Customer relationships
|
$
|
1,123
|
$
|
1,123
|
$
|
1,123
|
$
|
1,123
|
$
|
1,123
|
$
|
8,710
|
||||||||||||
Non-compete agreements
|
19
|
19
|
13
|
-
|
-
|
-
|
||||||||||||||||||
Licenses and permits
|
106
|
106
|
106
|
106
|
106
|
656
|
||||||||||||||||||
Developed technology
|
613
|
613
|
613
|
613
|
613
|
1,687
|
||||||||||||||||||
Total future amortization expense
|
$
|
1,861
|
$
|
1,861
|
$
|
1,855
|
$
|
1,842
|
$
|
1,842
|
$
|
11,053
|
Years Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(Thousands of Dollars)
|
||||||||||||
Sales
|
$
|
9,921
|
$
|
50,744
|
$
|
63,300
|
||||||
Gross profit (loss)
|
(17,211
|
)
|
(10,437
|
)
|
3,624
|
|||||||
General, administrative and other expenses
|
9,690
|
8,796
|
10,487
|
|||||||||
Loss from operations
|
$
|
(26,901
|
)
|
$
|
(19,233
|
)
|
$
|
(6,863
|
)
|
|||
Gain on settlement with former operator
|
17,425
|
-
|
-
|
|||||||||
Net loss
|
$
|
(9,476
|
)
|
$
|
(19,233
|
)
|
$
|
(6,863
|
)
|
Years Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(Thousands of Dollars)
|
||||||||||||
Net income before depreciation and amortization
|
$
|
2,196
|
$
|
4,016
|
$
|
16,845
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
(Thousands of Dollars)
|
||||||||
Current assets
|
$
|
22,860
|
$
|
26,078
|
||||
Noncurrent assets
|
251,741
|
255,613
|
||||||
Total assets
|
$
|
274,601
|
$
|
281,691
|
||||
Current liabilities
|
$
|
8,005
|
$
|
22,740
|
||||
Long term liabilities
|
82,546
|
85,450
|
||||||
Shareholders' equity
|
184,050
|
173,501
|
||||||
Total liabilities and equity
|
$
|
274,601
|
$
|
281,691
|
2016
|
2015
|
2014
|
||||||||||
AMAK Net Loss
|
$
|
(9,476
|
)
|
$
|
(19,233
|
)
|
$
|
(6,863
|
)
|
|||
Zakat tax applicable to Saudi Arabian shareholders only
|
320
|
303
|
-
|
|||||||||
AMAK Net Loss before Saudi Arabian shareholders’ portion of Zakat
|
$
|
(9,156
|
)
|
$
|
(18,930
|
)
|
$
|
(6,863
|
)
|
|||
Company’s share of loss reported by AMAK (33.44% beginning July 10, 2016 and 35.25% prior to July 10, 2016)
|
$
|
(2,826
|
)
|
$
|
(6,672
|
)
|
$
|
(2,419
|
)
|
|||
Amortization of difference between Company’s investment in AMAK
|
||||||||||||
and Company’s share of net assets of AMAK
|
1,347
|
1,347
|
1,347
|
|||||||||
Equity in loss of AMAK
|
$
|
(1,479
|
)
|
$
|
(5,325
|
)
|
$
|
(1,072
|
)
|
Name
|
Percentage Owned
|
|||
Various Saudi shareholders
|
46.73
|
%
|
||
Trecora Resources
|
33.44
|
%
|
||
Armico
|
19.51
|
%
|
||
Treasury
|
0.32
|
%
|
||
Total
|
100.00
|
%
|
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Revolving note to domestic banks (A)
|
$
|
9,000
|
$
|
1,000
|
||||
Term note to domestic banks (B)
|
56,000
|
61,250
|
||||||
Term note to domestic banks (C)
|
19,000
|
20,000
|
||||||
Loan fees
|
(748
|
)
|
(1,020
|
)
|
||||
Total long-term debt
|
83,252
|
81,230
|
||||||
Less current portion including loan fees
|
10,145
|
8,061
|
||||||
Total long-term debt, less current portion including loan fees
|
$
|
73,107
|
$
|
73,169
|
(A)
|
On October 1, 2014, TOCCO, SHR, GSPL and TC (SHR, GSPL and TC collectively the “Guarantors”) entered into an Amended and Restated Credit Agreement (“ARC Agreement”) with the lenders which from time to time are parties to the ARC Agreement (collectively, the “Lenders”) and Bank of America, N.A., a national banking association, as Administrative Agent for the Lenders, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Lead Arranger.
|
(B)
|
Under the ARC Agreement, TOCCO also borrowed $70.0 million in a single advance term loan (the “Acquisition Term Loan”) to partially finance the Acquisition. At December 31, 2016, there was a short-term amount of $8.8 million and a long-term amount of $47.3 million outstanding. At December 31, 2015, there was a short-term amount of $7.0 million and a long-term amount of $54.3 million outstanding.
|
(C)
|
Under the ARC Agreement, TOCCO also has the right to borrow $25.0 million in a multiple advance loan (the “Term Loans,” together with the Revolving Loans and Acquisition Term Loan, collectively the “Loans”). Borrowing availability under the Term Loans ended on December 31, 2015. The Term Loans convert from a multiple advance loan to a “mini-perm” loan once TOCCO has fulfilled certain obligations such as certification that construction of D Train was completed in a good and workmanlike manner, receipt of applicable permits and releases from governmental authorities, and receipt of releases of liens from the contractor and each subcontractor and supplier. The Loans also include a $40.0 million uncommitted increase option (the “Accordion Option”). As of December 31, 2016, TOCCO had borrowed funds under the agreement aggregating $20.0 million with no additional availability remaining. At December 31, 2016, there was a short-term amount of $1.7 million and a long-term amount of $17.3 million outstanding. At December 31, 2015, there was a short-term amount of $1.3 million and a long-term amount of $18.7 million outstanding.
|
Year Ending December 31,
|
Long-Term Debt
|
|||
(thousands of dollars)
|
||||
2017
|
$
|
10,417
|
||
2018
|
8,333
|
|||
2019
|
65,250
|
|||
Total
|
$
|
84,000
|
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Accrued state taxes
|
$
|
81
|
$
|
325
|
||||
Accrued payroll
|
1,097
|
1,293
|
||||||
Accrued interest
|
33
|
34
|
||||||
Accrued officers’ compensation
|
-
|
1,254
|
||||||
Other liabilities
|
806
|
1,156
|
||||||
Total
|
$
|
2,017
|
$
|
4,062
|
Year Ending December 31,
|
Long-Term Debt
|
|||
(thousands of dollars)
|
||||
2017
|
$
|
3,595
|
||
2018
|
3,393
|
|||
2019
|
3,341
|
|||
2020
|
3,250
|
|||
2021
|
3,120
|
|||
Thereafter
|
4,675
|
|||
Total
|
$
|
21,374
|
Shares of
Restricted
Stock
|
Weighted
Average Grant
Date Price per
Share
|
|||||||
Outstanding at January 1, 2016
|
148,040
|
$
|
14.14
|
|||||
Granted
|
245,426
|
10.19
|
||||||
Vested
|
(42,575
|
)
|
13.60
|
|||||
Outstanding at December 31, 2016
|
350,891
|
$
|
11.44
|
|||||
Expected to vest
|
329,690
|
Expected volatility
|
84%
|
Expected dividends
|
None
|
Expected term (in years)
|
6.25
|
Risk free interest rate
|
1.95%
|
Expected volatility
|
85%
|
Expected dividends
|
None
|
Expected term (in years)
|
6.25
|
Risk free interest rate
|
1.33%
|
Expected volatility
|
87%
|
Expected dividends
|
None
|
Expected term (in years)
|
6.5
|
Risk free interest rate
|
0.92%
|
Expected volatility
|
96% to 413%
|
Expected dividends
|
None
|
Expected term (in years)
|
5-10
|
Risk free interest rate
|
1.26% to 3.34%
|
Expected volatility
|
338% to 467%
|
Expected dividends
|
None
|
Expected term (in years)
|
5-10
|
Risk free interest rate
|
2.37% to 3.68%
|
Stock Options and Warrants
|
Weighted
Average
Exercise
Price
Per Share
|
Weighted
Average
Remaining
Contractual
Life
|
Intrinsic
Value
(in thousands)
|
|||||||||||||
Outstanding at December 31, 2015
|
1,376,437
|
$
|
7.68
|
|||||||||||||
Granted
|
-
|
-
|
||||||||||||||
Expired
|
-
|
-
|
||||||||||||||
Exercised
|
(28,000
|
)
|
2.39
|
|||||||||||||
Forfeited
|
-
|
-
|
||||||||||||||
Outstanding at December 31, 2016
|
1,348,437
|
$
|
7.79
|
5.2
|
$
|
8,172
|
||||||||||
Expected to vest
|
292,500
|
$
|
11.56
|
7.0
|
$
|
670
|
||||||||||
Exercisable at December 31, 2016
|
855,937
|
$
|
7.53
|
5.2
|
$
|
5,410
|
Shares
|
Weighted
Average
Grant-Date
Fair Value
Per Share
|
|||||||
Non-vested at January 1, 2016
|
700,000
|
$
|
8.66
|
|||||
Granted
|
-
|
-
|
||||||
Forfeited
|
-
|
-
|
||||||
Vested
|
(207,500
|
)
|
9.64
|
|||||
Non-vested at December 31, 2016
|
492,500
|
$
|
8.25
|
Year ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(thousands of dollars)
|
||||||||||||
Current federal provision
|
$
|
1,691
|
$
|
4,062
|
$
|
8,756
|
||||||
Current state provision
|
18
|
285
|
296
|
|||||||||
Deferred federal provision (benefit)
|
8,645
|
5,367
|
(1,893
|
)
|
||||||||
Deferred state provision (benefit)
|
150
|
50
|
(12
|
)
|
||||||||
Income tax expense
|
$
|
10,504
|
$
|
9,764
|
$
|
7,147
|
2016
|
2015
|
2014
|
||||||||||
(thousands of dollars)
|
||||||||||||
Income taxes at U.S. statutory rate
|
$
|
10,476
|
$
|
9,927
|
$
|
7,952
|
||||||
State taxes, net of federal benefit
|
285
|
230
|
181
|
|||||||||
Permanent and other items
|
(257
|
)
|
(393
|
)
|
(915
|
)
|
||||||
Increase (decrease) in valuation allowance
|
-
|
-
|
(71
|
)
|
||||||||
Total tax expense
|
$
|
10,504
|
$
|
9,764
|
$
|
7,147
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Deferred tax liabilities:
|
||||||||
Plant, pipeline and equipment
|
$
|
(22,598
|
)
|
$
|
(14,996
|
)
|
||
Intangible assets
|
(786
|
)
|
(284
|
)
|
||||
Other assets
|
(10
|
)
|
(14
|
)
|
||||
Investment in AMAK
|
(3,109
|
)
|
( 2,522
|
)
|
||||
Total deferred tax liabilities
|
$
|
(26,503
|
)
|
$
|
(17,816
|
)
|
||
Deferred tax assets:
|
||||||||
Accounts receivable
|
322
|
283
|
||||||
Inventory
|
1,283
|
1,785
|
||||||
Mineral interests
|
376
|
376
|
||||||
Unrealized loss on swap agreements
|
20
|
62
|
||||||
Post-retirement benefits
|
423
|
330
|
||||||
Stock-based compensation
|
1,372
|
969
|
||||||
Intangible assets
|
-
|
-
|
||||||
Deferred revenue
|
-
|
-
|
||||||
Gross deferred tax assets
|
3,796
|
3,805
|
||||||
Valuation allowance
|
(376
|
)
|
(376
|
)
|
||||
Total net deferred tax assets
|
$
|
3,420
|
$
|
3,429
|
||||
Net deferred tax liabilities
|
$
|
(23,083
|
)
|
$
|
(14,387
|
)
|
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
Current:
|
||||||||
Deferred tax asset
|
$
|
1,615
|
$
|
2,116
|
||||
Non-current:
|
||||||||
Deferred tax assets
|
6,124
|
4,637
|
||||||
Deferred tax liability
|
(30,446
|
)
|
(20,764
|
)
|
||||
Valuation allowance
|
(376
|
)
|
(376
|
)
|
||||
Non-current deferred tax liability, net
|
(24,698
|
)
|
(16,503
|
)
|
||||
Total deferred liabilities, net
|
$
|
(23,083
|
)
|
$
|
(14,387
|
)
|
Year Ended December 31, 2016
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Net revenues
|
$
|
182,028
|
$
|
30,371
|
$
|
-
|
$
|
212,399
|
||||||||
Operating profit before depreciation and amortization
|
31,885
|
3,043
|
(6,444
|
)
|
28,484
|
|||||||||||
Operating profit (loss)
|
26,060
|
(865
|
)
|
(6,488
|
)
|
18,707
|
||||||||||
Profit (loss) before taxes
|
24,084
|
10,675
|
(4,827
|
)
|
29,932
|
|||||||||||
Depreciation and amortization
|
5,825
|
3,908
|
44
|
9,777
|
||||||||||||
Capital expenditures
|
22,948
|
17,547
|
-
|
40,495
|
Year Ended December 31, 2016
|
|||||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Eliminations
|
Consolidated
|
|||||||||||||||
(in thousands)
|
|||||||||||||||||||
Goodwill and intangible assets, net
|
$
|
-
|
$
|
44,467
|
$
|
-
|
$
|
-
|
$
|
44,467
|
|||||||||
Total assets
|
219,376
|
113,676
|
107,302
|
(148,255
|
)
|
292,099
|
Year Ended December 31, 2015
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Net revenues
|
$
|
218,233
|
$
|
23,743
|
$
|
-
|
$
|
241,976
|
||||||||
Operating profit before depreciation and amortization
|
47,565
|
4,549
|
(7,013
|
)
|
45,101
|
|||||||||||
Operating profit (loss)
|
43,081
|
(1
|
)
|
(7,039
|
)
|
36,041
|
||||||||||
Profit (loss) before taxes
|
40,948
|
(195
|
)
|
(12,392
|
)
|
28,362
|
||||||||||
Depreciation and amortization
|
4,484
|
4,550
|
26
|
9,060
|
||||||||||||
Capital expenditures
|
24,358
|
6,889
|
-
|
31,247
|
Year Ended December 31, 2015
|
|||||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Eliminations
|
Consolidated
|
|||||||||||||||
(in thousands)
|
|||||||||||||||||||
Goodwill and intangible assets, net
|
$
|
-
|
$
|
46,347
|
$
|
-
|
$
|
-
|
$
|
46,347
|
|||||||||
Total assets
|
195,358
|
86,076
|
98,728
|
(122,371
|
)
|
257,791
|
Year ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(thousands of dollars)
|
||||||||||||
Net income
|
$
|
19,428
|
$
|
18,598
|
$
|
15,571
|
||||||
Basic earnings per common share:
|
||||||||||||
Weighted average shares outstanding
|
24,284
|
24,370
|
24,188
|
|||||||||
Per share amount (dollars)
|
$
|
0.80
|
$
|
0.76
|
$
|
0.64
|
||||||
Diluted earnings per common share:
|
||||||||||||
Weighted average shares outstanding
|
24,982
|
25,181
|
24,896
|
|||||||||
Per share amount (dollars)
|
$
|
0.78
|
$
|
0.74
|
$
|
0.63
|
Weighted average shares-denominator
basic computation
|
24,284
|
24,370
|
24,188
|
|||||||||
Unvested restricted stock grant
|
310
|
141
|
-
|
|||||||||
Effect of dilutive stock options
|
388
|
670
|
708
|
|||||||||
Weighted average shares, as adjusted
denominator diluted computation
|
24,982
|
25,181
|
24,896
|
Year Ended December 31, 2016
|
||||||||||||||||||||
First
Quarter
|
Second
Quarter(2)
|
Third
Quarter(3)
|
Fourth
Quarter
|
Total
|
||||||||||||||||
Revenues
|
$
|
52,200
|
$
|
48,854
|
$
|
57,142
|
$
|
54,203
|
$
|
212,399
|
||||||||||
Gross profit
|
11,771
|
11,574
|
8,905
|
7,652
|
39,902
|
|||||||||||||||
Net income
|
7,224
|
10,252
|
2,799
|
(847
|
)
|
19,428
|
||||||||||||||
Basic EPS(1)
|
$
|
0.30
|
$
|
0.42
|
$
|
0.12
|
$
|
(0.03
|
)
|
$
|
0.80
|
|||||||||
Diluted EPS(1)
|
$
|
0.29
|
$
|
0.41
|
$
|
0.11
|
$
|
(0.03
|
)
|
$
|
0.78
|
Year Ended December 31, 2015
|
||||||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
||||||||||||||||
Revenues
|
$
|
55,143
|
$
|
59,350
|
$
|
66,938
|
$
|
60,545
|
$
|
241,976
|
||||||||||
Gross profit
|
15,123
|
14,594
|
16,035
|
11,257
|
57,009
|
|||||||||||||||
Net income
|
5,784
|
6,374
|
5,318
|
1,122
|
18,598
|
|||||||||||||||
Basic EPS(1)
|
$
|
0.24
|
$
|
0.26
|
$
|
0.21
|
$
|
0.05
|
$
|
0.76
|
||||||||||
Diluted EPS(1)
|
$
|
0.23
|
$
|
0.25
|
$
|
0.21
|
$
|
0.05
|
$
|
0.74
|
(1)
|
Basic and diluted earnings per share are computed independently for each of the quarters presented based on the weighted average number of common shares outstanding during that period. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.
|
(2)
|
On May 2, 2016, we purchased the idle BASF facility adjacent to our TC facility. As discussed in Note 2, we recorded a bargain purchase gain of approximately $11.5 million on the transaction.
|
(3)
|
As discussed in Note 11, in July 2016 AMAK issued four million shares. As a result of the equity issuance, our share of the net assets of AMAK increased approximately $3.2 million which we recognized as a gain.
|
December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Realized gain (loss)
|
$
|
-
|
$
|
(180
|
)
|
$
|
(452
|
)
|
||||
Unrealized gain (loss)
|
-
|
180
|
(132
|
)
|
||||||||
Net loss
|
$
|
-
|
$
|
-
|
$
|
(584
|
)
|
December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Interest expense reclassified from other
comprehensive income (loss)
|
$
|
-
|
$
|
-
|
$
|
378
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Fair value of derivative liability
|
$
|
58
|
$
|
177
|
Description
|
Beginning
balance
|
Charged
(credited)
to earnings
|
Deductions
|
Ending
balance
|
||||||||||||
ALLOWANCE FOR DEFERRED
TAX ASSET
|
||||||||||||||||
December 31, 2014
|
446,919
|
(122,500
|
)
|
51,618
|
376,037
|
|||||||||||
December 31, 2015
|
376,037
|
-
|
-
|
376,037
|
||||||||||||
December 31, 2016
|
376,037
|
-
|
-
|
376,037
|
Description
|
Beginning
balance
|
Charged
to earnings
|
Deductions
|
Ending
balance
|
||||||||||||
ALLOWANCE FOR DOUBTFUL
ACCOUNTS
|
||||||||||||||||
December 31, 2014
|
210,000
|
-
|
-
|
210,000
|
||||||||||||
December 31, 2015
|
210,000
|
-
|
-
|
210,000
|
||||||||||||
December 31, 2016
|
210,000
|
183,339
|
(93,339
|
)
|
300,000
|
Page
|
|
1 - 2
|
|
Financial Statements:
|
|
3 - 4
|
|
5
|
|
6
|
|
7 - 8
|
|
9 - 29
|
AL MASANE AL KOBRA MINING COMPANY
|
||||||||
December 31,
|
||||||||
2016
|
2015
|
|||||||
(Expressed in Saudi Riyals)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
56,518,906
|
30,413,832
|
||||||
Accounts receivable
|
-
|
28,351,618
|
||||||
Inventories
|
15,875,180
|
31,630,132
|
||||||
Due from shareholders
|
50,000
|
298,562
|
||||||
Advances to contractors and other
|
13,283,204
|
7,096,846
|
||||||
Total current assets
|
85,727,290
|
97,790,990
|
||||||
Non-current assets:
|
||||||||
Property and equipment, net
|
726,529,739
|
739,935,227
|
||||||
Development costs, net
|
209,680,505
|
209,680,505
|
||||||
Deferred mine closure costs
|
7,817,250
|
8,934,000
|
||||||
Total non-current assets
|
944,027,494
|
958,549,732
|
||||||
1,029,754,784
|
1,056,340,722
|
|||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Pre-export advance payments
|
-
|
9,150,880
|
||||||
Accounts payable and accrued liabilities
|
13,034,609
|
74,868,227
|
||||||
Zakat and income tax liability
|
1,933,625
|
1,254,419
|
||||||
Due to shareholders
|
50,669
|
-
|
||||||
Long-term debt, current portion
|
15,000,000
|
-
|
||||||
Total current liabilities
|
30,018,903
|
85,273,526
|
||||||
Non-current liabilities
|
||||||||
Provision for mine closure costs
|
14,995,109
|
14,488,028
|
||||||
Long-term debt, net of current portion and
|
||||||||
deferred finance costs
|
282,472,077
|
295,324,433
|
||||||
End-of-service indemnities
|
1,480,636
|
1,745,433
|
||||||
Deferred income taxes
|
10,599,748
|
8,881,490
|
||||||
Total non-current liabilities
|
309,547,570
|
320,439,384
|
AL MASANE AL KOBRA MINING COMPANY
|
||||||||
Balance Sheets - (Continued)
|
||||||||
|
||||||||
December 31,
|
||||||||
2016
|
2015
|
|||||||
(Expressed in Saudi Riyals)
|
||||||||
Commitments and contigencies
|
||||||||
Shareholders' equity
|
||||||||
Share capital
|
780,000,000
|
740,000,000
|
||||||
Share premium
|
35,092,840
|
-
|
||||||
Accumulated deficit
|
(124,904,529
|
)
|
(89,372,188
|
)
|
||||
Total shareholders' equity
|
690,188,311
|
650,627,812
|
||||||
1,029,754,784
|
1,056,340,722
|
AL MASANE AL KOBRA MINING COMPANY
|
||||||||||||
|
||||||||||||
December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(Expressed in Saudi Riyals)
|
||||||||||||
Revenues
|
37,202,504
|
190,290,543
|
237,374,741
|
|||||||||
Costs of revenues
|
101,743,839
|
229,428,965
|
223,784,222
|
|||||||||
Gross profit (loss) margin
|
(64,541,335
|
)
|
(39,138,422
|
)
|
13,590,519
|
|||||||
General and
|
||||||||||||
administrative expenses
|
26,957,555
|
24,633,457
|
26,119,478
|
|||||||||
Loss from operations
|
(91,498,890
|
)
|
(63,771,879
|
)
|
(12,528,959
|
)
|
||||||
Other income (expense)
|
||||||||||||
Gain on forgiveness of liabilities (Note 8)
|
65,345,250
|
-
|
-
|
|||||||||
Finance charges
|
(6,043,410
|
)
|
(6,360,680
|
)
|
(10,481,803
|
)
|
||||||
Other income
|
260,953
|
-
|
152,053
|
|||||||||
59,562,793
|
(6,360,680
|
)
|
(10,329,750
|
)
|
||||||||
Loss before zakat and income taxes
|
(31,936,097
|
)
|
(70,132,559
|
)
|
(22,858,709
|
)
|
||||||
Provision for zakat and income taxes
|
(3,596,244
|
)
|
(1,990,635
|
)
|
(2,877,516
|
)
|
||||||
Net loss
|
(35,532,341
|
)
|
(72,123,194
|
)
|
(25,736,225
|
)
|
AL MASANE AL KOBRA MINING COMPANY
|
||||||||||||||||
|
||||||||||||||||
(Expressed in Saudi Riyals)
|
||||||||||||||||
Retained
|
||||||||||||||||
Earnings
|
||||||||||||||||
Share
|
Share
|
(Accumulated
|
||||||||||||||
Capital
|
Premium
|
Deficit)
|
Total
|
|||||||||||||
Balance at December 31, 2013
|
550,000,000
|
190,000,000
|
8,487,231
|
748,487,231
|
||||||||||||
Net loss
|
-
|
-
|
(25,736,225
|
)
|
(25,736,225
|
)
|
||||||||||
Balance at December 31, 2014
|
550,000,000
|
190,000,000
|
(17,248,994
|
)
|
722,751,006
|
|||||||||||
Conversion in share premium to
|
190,000,000
|
(190,000,000
|
)
|
-
|
-
|
|||||||||||
share capital
|
||||||||||||||||
Net loss
|
-
|
-
|
(72,123,194
|
)
|
(72,123,194
|
)
|
||||||||||
Balance at December 31, 2015
|
740,000,000
|
-
|
(89,372,188
|
)
|
650,627,812
|
|||||||||||
Issuance of share capital and premium
|
40,000,000
|
35,092,840
|
-
|
75,092,840
|
||||||||||||
Net loss
|
-
|
-
|
(35,532,341
|
)
|
(35,532,341
|
)
|
||||||||||
Balance at December 31, 2016
|
780,000,000
|
35,092,840
|
(124,904,529
|
)
|
690,188,311
|
AL MASANE AL KOBRA MINING COMPANY
|
||||||||||||
|
||||||||||||
December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(Expressed in Saudi Riyals)
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
(35,532,341
|
)
|
(72,123,194
|
)
|
(25,736,225
|
)
|
||||||
Adjustments to reconcile net loss to net cash
|
||||||||||||
provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
43,768,238
|
87,183,080
|
88,903,533
|
|||||||||
Accretion of deferred mine closure costs
|
507,081
|
489,934
|
473,366
|
|||||||||
Amortization of deferred finance costs
|
2,147,644
|
2,147,644
|
2,641,114
|
|||||||||
Gain on forgiveness of liabilities
|
(65,345,250
|
)
|
-
|
-
|
||||||||
Gain on disposal of property and equipment
|
-
|
-
|
(152,053
|
)
|
||||||||
Deferred income taxes
|
1,718,258
|
736,216
|
2,877,516
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
28,351,618
|
(19,254,887
|
)
|
1,517,429
|
||||||||
Inventories
|
15,754,952
|
(3,308,910
|
)
|
(19,544,150
|
)
|
|||||||
Advances to contractors and other
|
(6,186,357
|
)
|
8,175,068
|
10,887,630
|
||||||||
Accounts payable and accrued liabilities
|
3,511,632
|
27,106,206
|
1,740,228
|
|||||||||
Zakat and income tax liability
|
679,206
|
1,254,419
|
-
|
|||||||||
Pre-export advance payment
|
(9,150,880
|
)
|
5,327,622
|
3,823,258
|
||||||||
End-of-service indemnities
|
(264,797
|
)
|
202,418
|
147,685
|
||||||||
Net cash provided by (used in) operating activities
|
(20,040,996
|
)
|
37,935,616
|
67,579,331
|
||||||||
Cash flows from investing activities:
|
||||||||||||
Additions to property and equipment
|
(29,246,001
|
)
|
(55,782,406
|
)
|
(89,228,705
|
)
|
AL MASANE AL KOBRA MINING COMPANY
|
||||||||||||
Statements of Cash Flows - (Continued)
|
||||||||||||
|
||||||||||||
December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(Expressed in Saudi Riyals)
|
||||||||||||
Cash flows from financing activities:
|
||||||||||||
Deferred finance costs
|
-
|
-
|
(1,725,000
|
)
|
||||||||
Issuance of share capital and premium
|
75,092,840
|
-
|
-
|
|||||||||
Payments on capital lease obligations
|
-
|
(4,792,531
|
)
|
(18,432,290
|
)
|
|||||||
Payments on long-term debt
|
-
|
-
|
(20,000,000
|
)
|
||||||||
Proceeds from long-term debt
|
-
|
50,192,000
|
-
|
|||||||||
Net advances from (repayments to) shareholders
|
299,231
|
(119,016
|
)
|
(2,290,152
|
)
|
|||||||
Net cash provided by (used in) financing activities
|
75,392,071
|
45,280,453
|
(42,447,442
|
)
|
||||||||
Net change in cash and cash equivalents
|
(13,894,926
|
)
|
27,433,663
|
(64,096,816
|
)
|
|||||||
Cash and cash equivalents, beginning of year
|
30,413,832
|
2,980,169
|
67,076,985
|
|||||||||
Cash and cash equivalents, end of year
|
56,518,906
|
30,413,832
|
2,980,169
|
|||||||||
See Note 16 for supplemental cash flow information
|
Shares
|
Ownership
Percentage
|
Paid-In
Capital
|
|||
Saudi shareholders
|
36,459,642
|
46.74
|
364,596,420
|
||
Trecora (US Company)
|
26,085,000
|
33.44
|
260,850,000
|
||
ARMICO (Pan Arab Organization)
|
15,455,358
|
19.82
|
154,553,580
|
||
78,000,000
|
100.00
|
780,000,000
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Mill stockpiles
|
-
|
19,410,770
|
||||||
Precious metal dore
|
4,231,848
|
4,231,848
|
||||||
Explosives
|
539,284
|
-
|
||||||
Chemicals and other
|
11,104,048
|
7,987,514
|
||||||
15,875,180
|
31,630,132
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Advances to contractors
|
6,782,227
|
2,790,023
|
||||||
Prepaid expenses
|
5,155,614
|
3,360,082
|
||||||
Other miscellaneous advances and receivables
|
1,345,363
|
946,741
|
||||||
13,283,204
|
7,096,846
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Buildings
|
190,152,290
|
181,136,277
|
||||||
Leasehold improvements
|
1,838,317
|
1,838,317
|
||||||
Heavy equipment
|
105,298,173
|
103,372,979
|
||||||
Motor vehicles
|
22,788,233
|
21,960,933
|
||||||
Civil works
|
15,081,589
|
15,081,590
|
||||||
Tailings dam
|
22,684,394
|
22,684,394
|
||||||
Plant and machinery
|
282,278,789
|
284,231,416
|
||||||
Mining assets – rehabilitation costs
|
98,894,826
|
98,894,826
|
||||||
Mining assets – underground development costs
|
245,952,161
|
232,306,494
|
||||||
Construction in progress
|
21,964,039
|
17,937,363
|
||||||
1,006,932,811
|
979,444,589
|
|||||||
Less accumulated depreciation, depletion and amortization
|
(280,403,072
|
)
|
(239,509,362
|
)
|
||||
726,529,739
|
739,935,227
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Cost
|
289,973,237
|
289,973,237
|
||||||
Accumulated amortization
|
(80,292,732
|
)
|
(80,292,732
|
)
|
||||
209,680,505
|
209,680,505
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Accounts payable
|
11,483,683
|
58,591,574
|
||||||
Retention payable
|
-
|
14,744,250
|
||||||
Accrued salaries and payroll expenses
|
1,550,926
|
1,532,403
|
||||||
13,034,609
|
74,868,227
|
Years ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Non-current deferred income tax benefit
|
(6,694,909
|
)
|
(10,531,677
|
)
|
(521,853
|
)
|
||||||
Change in valuation allowance
|
8,413,167
|
11,267,893
|
3,399,369
|
|||||||||
Current Zakat expense
|
1,877,986
|
1,254,419
|
-
|
|||||||||
Provision for Zakat and income taxes
|
3,596,244
|
1,990,635
|
2,877,516
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Deferred tax assets:
|
||||||||
Loss carryforward
|
33,478,181
|
24,310,861
|
||||||
Other
|
302,140
|
291,961
|
||||||
33,780,321
|
24,602,822
|
|||||||
Deferred tax liabilities:
|
||||||||
Property and Equipment
|
(20,282,197
|
)
|
(17,799,608
|
)
|
||||
Net deferred tax asset
|
13,498,124
|
6,803,214
|
||||||
Valuation allowance
|
(24,097,872
|
)
|
(15,684,704
|
)
|
||||
Net deferred tax liability
|
(10,599,748
|
)
|
(8,881,490
|
)
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
SIDF loan agreement
|
310,000,000
|
310,000,000
|
||||||
Deferred finance charges
|
(12,527,923
|
)
|
(14,675,567
|
)
|
||||
Total long-term debt
|
297,472,077
|
295,324,433
|
||||||
Less current portion
|
15,000,000
|
-
|
||||||
Total long-term debt, less current portion
|
282,472,077
|
295,324,433
|
Years Ending
December 31,
|
||||
2017
|
15,000,000
|
|||
2018
|
55,000,000
|
|||
2019
|
50,000,000
|
|||
2020
|
60,000,000
|
|||
2021
|
60,000,000
|
|||
Thereafter
|
70,000,000
|
|||
310,000,000
|
Years Ended December 31,
|
||||||||
2016
|
2015
|
|||||||
Balance, beginning of year
|
1,745,433
|
1,543,015
|
||||||
Provision for the year
|
1,032,104
|
550,685
|
||||||
Paid during the year
|
(1,296,901
|
)
|
(348,267
|
)
|
||||
Balance, end of year
|
1,480,636
|
1,745,433
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Cost
|
12,842,625
|
12,842,625
|
||||||
Accumulated amortization
|
(5,025,375
|
)
|
(3,908,625
|
)
|
||||
7,817,250
|
8,934,000
|
Years Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Balance, beginning of year
|
14,488,028
|
13,998,094
|
13,524,728
|
|||||||||
Accretion expense
|
507,081
|
489,934
|
473,366
|
|||||||||
Balance, end of year
|
14,995,109
|
14,488,028
|
13,998,094
|
Years Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Wages, salaries and related costs
|
10,053,109
|
10,459,516
|
12,769,312
|
|||||||||
Depreciation
|
-
|
235,605
|
681,008
|
|||||||||
Mine closure and environmental
|
1,623,831
|
1,606,683
|
1,590,116
|
|||||||||
Office expenses
|
5,124,983
|
5,911,485
|
3,470,200
|
|||||||||
Travel and accommodation
|
1,611,793
|
1,686,018
|
2,160,061
|
|||||||||
Professional fees
|
8,169,121
|
3,972,898
|
3,195,326
|
|||||||||
Other
|
374,718
|
761,252
|
2,253,455
|
|||||||||
26,957,555
|
24,633,457
|
26,119,478
|
Supplemental Information:
|
Years Ended December 31,
|
|||||||||||
2016
|
2015
|
2014
|
||||||||||
Cash paid for interest
|
3,895,766
|
4,213,036
|
7,840,689
|
|||||||||
Cash paid for Zakat and income tax
|
1,198,780
|
-
|
-
|
|||||||||
Years Ending
December 31,
|
||||
2017
|
760,000
|
|||
2018
|
913,333
|
|||
2019
|
990,000
|
|||
2020
|
990,000
|
|||
2021
|
990,000
|
|||
Thereafter
|
4,247,500
|
|||
8,890,833
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
Level 2
|
Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means; and
|
Level 3
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
|