Not Found
THE WOODLANDS, Texas--(BUSINESS WIRE)--Nov 9, 2023--
THE WOODLANDS, Texas--(BUSINESS WIRE)--Nov 9, 2023--
Trecora LLC, has acquired the lubricant additives business of Chemtrade based in Lawrence, KS. The business, one of North America’s leading producers of Phosphorus Pentasulfide (P2S5), will be part of Trecora’s Specialty Chemicals business headquartered in the Woodlands, TX.
Trecora is North America's leading producer of high purity hydrocarbons. "We are extremely enthusiastic and committed to working with the talented team in Lawrence, KS to grow and innovate this already great business. This business complements our specialty chemical portfolio with its offering of unique and cost-effective solutions for constantly evolving lubricant requirements," said Brad Crocker, President and CEO of Trecora.
LOS ANGELES, June 27, 2022 /PRNewswire/ -- Balmoral Funds, LLC ("Balmoral") announced today that it has successfully completed its previously announced acquisition of Trecora Resources ("Trecora") at a price of $9.81 per share, net to each seller, in cash, without interest and subject to any required tax withholdings.
With the completion of the acquisition, Trecora's stock will cease trading on the New York Stock Exchange and Trecora will no longer be listed on any public market.
Blank Rome LLP served as legal advisor to Balmoral, and Piper Sandler served as financial advisor to Balmoral. Guggenheim Securities, LLC served as exclusive financial advisor to Trecora, and Morgan, Lewis & Bockius LLP served as legal advisor to Trecora.
Balmoral is a Los Angeles, CA based private equity fund that was founded in 2005. Balmoral's objective is to be the financial partner of choice for entrepreneurial, emotionally intelligent and successful C-suite executives and operating advisors creating transformative, revitalizing change in the businesses they co-invest in together. Balmoral has approximately $1.5 billion of assets under management. Balmoral typically invests in companies that have revenues between $30 to $500 million and require equity investments of $10 to $100 million, with the capability of investing an additional $100 million or more in particularly compelling opportunities.
Trecora owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
This press release contains "forward-looking statements" relating to the acquisition of Trecora by Balmoral. In some cases, forward-looking statements may be identified by terminology such as "believe," "may," "will," "should", "predict", "goal", "strategy", "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect," "seek" and similar expressions and variations thereof. These words are intended to identify forward-looking statements. Balmoral and Trecora have based these forward-looking statements on current expectations and projections about future events and trends that they believe may affect the financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs of Balmoral and Trecora. Forward-looking statements are subject to significant known and unknown risks and uncertainties that may cause actual results, performance or achievements in future periods to differ materially from those assumed, projected or contemplated in the forward-looking statements, including, but not limited to, the following factors: the potential effects of the acquisition on Trecora, the participation of third parties in the consummation of the transaction and the combined company, the risk that stockholder litigation in connection with the transaction may result in significant costs of defense, indemnification and liability; and other risks and uncertainties, including those set forth in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Trecora's Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Form 10-Q for the quarter ended May 5, 2022, which are on file with the Securities and Exchange Commission (the "SEC") and available on the SEC's website at www.sec.gov. The information contained in this document is provided only as of the date hereof, and no party undertakes any obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof, except as required by law.
CONTACT: Jeremy Hellman, jhellman@equityny.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/balmoral-funds-llc-completes-acquisition-of-trecora-resources-301575768.html
SOURCE Trecora Resources
SUGAR LAND, Texas and LOS ANGELES, June 24, 2022 /PRNewswire/ -- Trecora Resources (NYSE: TREC) ("Trecora" or the "Company") and Balmoral Swan MergerSub, Inc. (the "Purchaser"), an affiliate of Balmoral Funds, LLC (together with its consolidated subsidiaries, "Balmoral") today announced the successful completion of the previously commenced cash tender offer by the Purchaser to purchase all of the issued and outstanding shares of common stock of Trecora (collectively, the "Shares").
The tender offer expired at 12:00 A.M., New York City time on June 24, 2022. As of the expiration of the tender offer, a total of 16,781,352 Shares were validly tendered and not withdrawn from the tender offer, representing approximately 70.73% of the aggregate voting power of the Shares. As of such expiration, all conditions to the tender offer have been satisfied or waived. Purchaser has accepted for payment, and expects to promptly pay for, all such Shares validly tendered and not withdrawn in accordance with the terms of the tender offer.
As a result of its acceptance of the Shares tendered in the tender offer, Purchaser has acquired a sufficient number of Shares to close the merger of Purchaser with and into the Company without the affirmative vote of the Company's stockholders pursuant to Section 251(h) of the Delaware General Corporation Law. The parties expect to consummate the merger on June 27, 2022. In connection with the merger, the remaining outstanding shares will be converted into the right to receive $9.81 per Share in cash, without interest and subject to any required tax withholdings (which is the same amount per Share paid in the tender offer). As a result of the tender offer and the merger, Trecora will become a privately-held, indirect wholly-owned subsidiary of Balmoral and Trecora's common stock will cease trading on the New York Stock Exchange.
Blank Rome LLP is acting as legal advisor to Balmoral. Guggenheim Securities, LLC served as financial advisor to the Company and Morgan, Lewis & Bockius LLP served as its legal advisor.
About Trecora Resources
Trecora owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
About Balmoral Funds
Balmoral is a Los Angeles, CA based private equity fund that was founded in 2005. Balmoral's objective is to be the financial partner of choice for entrepreneurial, emotionally intelligent and successful C-suite executives and operating advisors creating transformative, revitalizing change in the businesses they co-invest in together. Balmoral has approximately $1 billion of assets under management. Balmoral typically invests in companies that have revenues between $30 to $500 million and require equity investments of $10 to $75 million, with the capability of doing more in particularly compelling opportunities.
Forward-Looking Statements
Any forward-looking statements, including, but not limited to, statements regarding the transaction between Balmoral and Trecora, strategic and other potential benefits of the transaction, and other statements about Balmoral's or Trecora's future expectations, beliefs, goals, plans or prospects, are subject to risks and uncertainties such as those described under the heading "Risk Factors" in the Company's periodic reports on file with the U.S. Securities and Exchange Commissions ("SEC"). These statements speak only as of the date of this press release and are based on Balmoral's and Trecora's current plans and expectations and involve risks and uncertainties that could cause actual future events or results to be different from those described in or implied by such forward-looking statements, including risks and uncertainties regarding: changes in financial markets; changes in economic, political or regulatory conditions; changes in facts and other circumstances and uncertainties concerning the proposed transaction; and other factors set forth from time to time in Trecora's SEC filings, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as the tender offer statement, solicitation/recommendation statement and other tender offer documents filed by Balmoral and Trecora, as applicable. Except as required by applicable law or regulation, Balmoral and Trecora do not undertake any obligation to update or revise any such forward-looking statements to reflect future events or circumstances.
Investor Contact
Jeremy Hellman, CFA
The Equity Group, Inc.
(212) 836-9626
jhellman@equityny.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-and-balmoral-swan-mergersub-inc-announce-completion-of-the-tender-offer-for-all-outstanding-shares-of-trecora-resources-301574871.html
SOURCE Trecora Resources
Purchase price of $9.81 per share in cash, with a total transaction value of $247 million
Transaction follows a comprehensive strategic review process by the Trecora Board of Directors
Trecora to adopt limited-duration shareholder rights plan as a condition to the transaction
SUGAR LAND, Texas, May 11, 2022 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, and an affiliate of Balmoral Funds, LLC (together with its consolidated subsidiaries, "Balmoral") today announced that they have entered into a definitive merger agreement (the "Merger Agreement") pursuant to which Balmoral agreed to acquire Trecora for $9.81 per share in cash in a transaction that values the Company at an enterprise value of $247 million, which represents approximately 11.4x our 2021 adjusted EBITDA.
Under the terms of the Merger Agreement, which has been approved by the Trecora Board of Directors (the "Trecora Board"), Balmoral will commence a tender offer to acquire all outstanding shares of Trecora's common stock, par value $0.10 per share (the "Trecora Common Stock") for $9.81 per share in cash. The purchase price represents a 29.9% premium to Trecora's closing stock price on May 10, 2022.
"Under the oversight of our Board of Directors and with the support of our talented team, we have worked diligently to enhance our execution, maximize operating efficiencies and reposition the Company for growth," said Pat Quarles, Trecora's President and Chief Executive Officer. "We are excited to enter this new chapter with Balmoral, which shares our enthusiasm for the future of our business and our opportunities for growth. With Balmoral's support, we remain deeply committed to supporting our customers with the quality and service level they have come to depend on us for."
Karen Twitchell, Chair of the Trecora Board, added, "We are pleased to have reached this agreement with Balmoral. The transaction announced today follows careful consideration and negotiation by the Board and concludes a deliberate and comprehensive strategic review process undertaken over the past seven months with the assistance of our independent financial advisor. Beginning in October 2021, we contacted 72 financial and strategic acquirers and held discussions with a number of parties, including Balmoral, through a formal, competitive process. Our Board believes this transaction maximizes value for shareholders, who will receive a significant premium and immediate and certain value for their shares."
David Shainberg, Managing Director of Balmoral, said, "We are delighted to announce this transaction with Trecora and are eager to execute on its growth plan. Having followed Trecora for years, we're encouraged by its strong customer relationships and product demand. This is Balmoral's fourth acquisition in the chemicals sector and we are excited to contribute to Trecora's continued success as a private company."
"I applaud Trecora's Board of Directors for recognizing alternative value creation opportunities for Trecora and for displaying disciplined attention to its fiduciary duties as representatives of the Company's shareholders," said Bradley L. Radoff, one of the Company's largest shareholders. "I have long thought that the best risk-adjusted outcome for Trecora and its shareholders is a sale of the Company, and I am proud that my constructive engagement with the Company over the last several months has helped lay the groundwork for this important transaction to unlock shareholder value. I commend the Board for its responsiveness to shareholder input and for conducting a thorough and deliberate process to deliver a transaction at a valuation that I support."
Conditions and Approvals
The closing of the transaction is subject to customary closing conditions, including the expiration or termination of certain regulatory periods and the tender of shares representing at least a majority of the Company's outstanding common stock to Balmoral, and is expected to close in the third quarter. Following the successful completion of the tender offer, Balmoral will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price.
Upon completion of the transaction, Trecora will become a privately held company and shares of Trecora Common Stock will no longer be listed on any market.
Guggenheim Securities is acting as exclusive financial advisor to Trecora and Morgan, Lewis & Bockius LLP and Vinson & Elkins L.L.P. are serving as legal advisors to Trecora. Piper Sandler & Co. is acting as financial advisor and Blank Rome LLP is acting as legal advisor to Balmoral.
One-Year Shareholder Rights Plan
In connection with the transaction, the Trecora Board has adopted a limited duration Shareholder Rights Plan (the "Plan") that is effective immediately. The Plan is designed to assist the Trecora Board in maximizing shareholder value in connection with the sale of the Company. The Plan will not in any way prevent the transaction from occurring, nor will it prevent or restrict any person from making a superior proposal pursuant to the terms of the Merger Agreement.
Pursuant to the Plan, the Trecora Board declared a dividend distribution of one right (each a "Right") for each outstanding share of Trecora Common Stock to shareholders of record at the close of business on May 23, 2022. Each Right entitles its holder, under the circumstances described below, to purchase from Trecora one half of a share of Trecora Common Stock. The purchase price for each whole share of Trecora Common Stock pursuant to the exercise of a Right is initially $38.00 (equivalent to $19.00 for each one-half of a share of Trecora Common Stock), subject to adjustment.
The Rights will be exercisable only if a person or group of affiliated or associated persons (other than Balmoral or any of its affiliates or associates acting pursuant to the Merger Agreement) acquires beneficial ownership of 10% or more of the Company's common stock. The Plan provides that the ownership of shareholders that beneficially own 10% or more of the Trecora Common Stock on the date of adoption of the Plan will be grandfathered, but the Rights would become exercisable if at any time any such shareholder increases its ownership. Derivative interests in the Trecora Common Stock, such as swap arrangements, regardless of whether such arrangements carry with them the right to control voting or disposition of the underlying securities, are also considered beneficial ownership of the underlying Trecora Common Stock for purposes of the Plan.
Additional details about the Plan will be included in a Form 8-K to be filed by Trecora with the U.S. Securities and Exchange Commission (the "SEC").
About Trecora Resources
Trecora owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
About Balmoral Funds
Balmoral is a Los Angeles, CA based private equity fund that was founded in 2005. Balmoral's objective is to be the financial partner of choice for entrepreneurial, emotionally intelligent and successful C-suite executives and operating advisors creating transformative, revitalizing change in the businesses they co-invest in together. Balmoral has approximately $1 billion of assets under management. Balmoral typically invests in companies that have revenues between $30 to $500 million and require equity investments of $10 to $75 million, with the capability of doing more in particularly compelling opportunities.
Important Information
The tender offer for all of the outstanding shares of Trecora Common Stock has not yet commenced. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of Trecora Common Stock. The solicitation and offer to buy shares of Trecora Common Stock will only be made pursuant to the tender offer materials that Balmoral intends to file with the SEC. At the time the tender offer is commenced, Balmoral will file a tender offer statement on Schedule TO with the SEC, and Trecora will file a solicitation/recommendation statement on Schedule 14D-9 with the SEC with respect to the tender offer. TRECORA'S SHAREHOLDERS ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND OTHER TENDER OFFER DOCUMENTS) AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS FILED BY BALMORAL OR TRECORA WITH THE SEC WHEN THEY BECOME AVAILABLE BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE TENDER OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO. Both the tender offer statement and the solicitation/recommendation statement will be mailed to Trecora's shareholders free of charge. Investors and shareholders may obtain free copies of the Schedule TO and Schedule 14D-9, as each may be amended or supplemented from time to time, and other documents filed by the parties (when available) at the SEC's web site at www.sec.gov, by contacting Trecora's Investor Relations either by telephone at (212) 836-9626, e-mail at jhellman@equityny.com, or on Trecora's website at ir.trecora.com/.
Important Additional Information
Trecora, its directors and certain of its executive officers are participants in the solicitation of proxies from the Trecora's shareholders in connection with the 2022 annual meeting of shareholders (the "2022 Annual Meeting"). Trecora intends to file a definitive proxy statement and a BLUE proxy card with the SEC in connection with any such solicitation of proxies from Trecora's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING BLUE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Trecora's definitive proxy statement for the 2021 annual meeting of shareholders contains information regarding the direct and indirect interests, by security holdings or otherwise, of Trecora's directors and executive officers in the Company's securities. Information regarding subsequent changes to their holdings of the Company's securities can be found in the SEC filings on Forms 3, 4 and 5, which are available on Trecora's at ir.trecora.com/ or through the SEC's website at www.sec.gov. Information can also be found in Trecora's other SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 10, 2022 and amended on April 29, 2022. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2022 Annual Meeting. Shareholders will be able to obtain the definitive proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge on Trecora's website at ir.trecora.com/.
Forward-Looking Statements
Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to not completing, or not completely realizing the anticipated benefits from, the sale of the business, receipt and timing of necessary regulatory approvals, the impacts of the COVID-19 pandemic on our business, financial results and financial condition and that of our customers, suppliers, and other counterparties; general economic and financial conditions domestically and internationally, including the impact of rising inflation and supply chain issues; the ongoing impact of geopolitical conflict; the impact of actions by activist shareholders; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock and product prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events, health epidemics and pandemics (including the COVID-19 pandemic) and terrorist attacks; our ability to consummate, and the costs associated with, extraordinary transactions, including acquisitions, dispositions and other business combinations, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations; difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including, but not limited to, "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein and in our other filings with the SEC. Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic and other natural disasters such as severe weather events.
There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this release and the information included in our prior releases, reports and other filings with the SEC, the information contained in this release updates and supersedes such information.
Forward-looking statements are based on current plans, estimates, assumptions, and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.
Investor Contact
Jeremy Hellman, CFA
The Equity Group, Inc.
(212) 836-9626
jhellman@equityny.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-enters-into-a-definitive-agreement-to-be-acquired-by-an-affiliate-of-balmoral-funds-301545031.html
SOURCE Trecora Resources
SUGAR LAND, Texas, May 4, 2022 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced financial results for the first quarter ended March 31, 2022.
Executive Commentary
"The first quarter of 2022 saw a continuation of the market dynamics Trecora experienced during the second half of 2021 as the Company recorded solid results driven by increased economic activity, which is supporting end market demand. Demand for solvents and specialty wax products, along with custom processing, remained strong during the first quarter, enabling Trecora to record top line growth of 52.4% compared to the first quarter of 2021. Specialty Petrochemical volumes improved 17.6% from the same period in the prior year, while wax volumes similarly grew 17%. Recall that last year's volumes were significantly impacted by the Texas freeze event. Average Specialty Petrochemical sales prices rose 31.6% from the prior year period as Trecora continued to implement pricing increases in order to keep pace with input pricing. Custom processing revenues at TC improved more than 50% to $2.7 million for the first quarter of 2022 compared to the prior year period, while volumes of byproduct sales at SHR also expanded, gaining 45.2% from year-ago levels to 3.7 million gallons in the first quarter of 2022."
"We were particularly pleased to see volume growth in our Specialty Wax segment as input availability improved. That coupled with a favorable pricing environment yielded solid growth in segment revenue and Adjusted EBITDA in the first quarter of 2022," stated Pat Quarles, Trecora's President and Chief Executive Officer.
Sami Ahmad, Trecora's Chief Financial Officer stated, "The Specialty Petrochemicals segment had a strong first quarter, which included expenses associated with a large maintenance turnaround. The turnaround was completed safely and successfully. The costs for the turnaround were greater than expected and totaled approximately $2.4 million in the first quarter. We expect a further $0.4 of turnaround related costs in the second quarter."
"Rising natural gasoline feedstock costs in the first quarter, coupled with higher product pricing, had a negative impact on our working capital. Inventory build ahead of the SHR turnaround allowed us to utilize some lower cost inventory, on a relative basis, during the quarter thereby further enhancing margins. We ended the quarter with cash balance of $31.9 million and debt of $40.9 million. Operating cash flow for the quarter was a strong $7.7 million," concluded Mr. Ahmad.
First Quarter 2022 Financial Results
Total revenue in the first quarter of 2022 was $83.2 million, compared to $54.6 million in the first quarter of 2021. The 52.4% year-over-year increase was primarily due to increased volume compared with last year's quarter which was negatively impacted by the Texas freeze event. Price increases in both operating segments, resulting from strong end market demand and higher feedstock costs, also contributed to the positive year over year comparison.
Gross profit in the first quarter of 2022 was $7.9 million, or 9.5% of total revenues, compared to $2.3 million, or 4.3% of total revenues, in the first quarter of 2021 and $6.2 million, or 8.4% of total revenues, in the fourth quarter of 2021.
Net loss in the first quarter of 2022 was $(0.4) million, or $(0.02)1 per diluted share, compared to net loss of $(4.4) million, or $(0.18)2 per diluted share, in the first quarter of 2021. Adjusted EBITDA was $5.8 million for the first quarter of 2022, compared with $(0.1) million in the first quarter of 2021.
Specialty Petrochemicals
Specialty Petrochemicals volume in the first quarter of 2022 was 20.2 million gallons, which increased from 17.2 million gallons in the first quarter of 2021. Prime product volume in the first quarter of 2022 was 16.6 million gallons, which increased from 14.7 million gallons in the first quarter of 2021. By-product sales volume was 3.7 million gallons in the first quarter of 2022. The increase in volume compared to last year was primarily due to the Texas freeze event. Specialty Petrochemicals gross revenue increased 53.7% year-over-year due to the combination of increased volumes coupled with higher product prices.
Specialty Petrochemicals net income was $1.8 million in the first quarter of 2022, compared to net income of $0.2 million in the first quarter of 2021. Adjusted EBITDA for Specialty Petrochemicals in the first quarter of 2022 was $5.9 million, compared to $2.6 million in the first quarter of 2021.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS |
||||
MARCH 31, |
|||||
2022 |
2021 |
% Change |
|||
Product sales |
$69,090 |
$44,658 |
54.7% |
||
Processing fees |
1,488 |
1,254 |
18.7% |
||
Gross revenues |
$70,578 |
$45,912 |
53.7% |
||
Operating income before depreciation and amortization |
5,383 |
2,571 |
109.4% |
||
Operating income (loss) |
2,654 |
(231) |
1,248.9% |
||
Net income (loss) before taxes |
2,362 |
(297) |
895.3% |
||
Depreciation and amortization |
2,729 |
2,802 |
(2.6%) |
||
Adjusted EBITDA(*) |
5,889 |
2,569 |
129.2% |
||
Capital expenditures |
4,129 |
3,567 |
15.8% |
||
(*) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its |
Specialty Waxes
Specialty Waxes reported revenues of approximately $12.6 million in the first quarter of 2022, a 45.7% increase from the first quarter of 2021. Revenues included approximately $10.0 million of wax product sales in the first quarter of 2022, and processing revenues of $2.7 million. Wax revenues grew as higher selling prices combined with increased sales volumes. Wax sales volumes were 10.3 million pounds in the first quarter of 2022 compared to 8.8 million pounds in the first quarter 2021.
Specialty Waxes net income was $0.3 million in the first quarter of 2022, compared to a net loss of $(2.0) million in the first quarter of 2021. Adjusted EBITDA for Specialty Waxes in the first quarter of 2022 was $1.9 million, compared with $(0.5) million in the first quarter of 2021.
Processing fees were approximately $2.7 million in the first quarter of 2022, an increase of 50.9% from the first quarter of 2021. Processing fees in the first quarter of 2021 were negatively impacted by the Texas freeze event.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS |
||||||
2022 |
2021 |
% Change |
|||||
Product sales |
$9,971 |
$6,907 |
44.4% |
||||
Processing fees |
2,665 |
1,766 |
50.9% |
||||
Gross revenues |
$12,636 |
$8,673 |
45.7% |
||||
Operating income (loss) before depreciation and |
1,909 |
(481) |
496.9% |
||||
Operating income (loss) |
331 |
(1,957) |
116.9% |
||||
Net income (loss) before taxes |
324 |
(1,954) |
116.6% |
||||
Depreciation and amortization |
1,578 |
1,476 |
6.9% |
||||
Adjusted EBITDA(*) |
1,902 |
(479) |
497.1% |
||||
Capital expenditures |
722 |
1,214 |
(40.5%) |
||||
(*) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its |
Outlook
"Our first quarter was ahead of our guidance. Market conditions also continue to be consistent with our view when we introduced guidance last quarter and with that in mind, we are increasing our full year Adjusted EBITDA guidance to a range between $28 million and $32 million," concluded Mr. Quarles.
Earnings Call
Tomorrow's conference call, on May 5, 2022, at 11:00 am Eastern Time, will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com/ or at https://edge.media-server.com/mmc/p/vi42iivi. A webcast replay of the call will also be available through the same link until May 5, 2023.
To participate via telephone, callers should dial in at least ten to fifteen minutes prior to the 11:00 am Eastern Time start; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 2060048. To listen to the playback, which will be available telephonically for 48 hours, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 2060048 for the replay.
Use of Non-GAAP Measures
This earnings press release includes non-GAAP financial measures of EBITDA and Adjusted EBITDA and provides reconciliations from our most directly comparable GAAP financial measures to those measures.
We believe these financial measures provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We also believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.
We define EBITDA as net income (loss) plus interest expense, income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA as EBITDA net of the impact of items we do not consider indicative of our ongoing operating performance, including share-based compensation, gains or losses on disposal of assets, gains or losses on extinguishment of debt, costs for professional services associated with M&A and strategic initiatives and other non-recurring costs. These non-GAAP measures have been reconciled to the nearest GAAP measure for historical periods in the tables below entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures." However, the Company is unable to reconcile its expectations regarding Adjusted EBITDA for the full year 2022 to the most directly comparable GAAP measures without unreasonable efforts because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures.
Forward-Looking Statements
Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to the impacts of the COVID-19 pandemic on our business, financial results and financial condition and that of our customers, suppliers, and other counterparties; general economic and financial conditions domestically and internationally, including the impact of rising inflation and supply chain issues; the ongoing impact of geopolitical conflict; the impact of actions by activist stockholders; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock and product prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events, health epidemics and pandemics (including the COVID-19 pandemic) and terrorist attacks; our ability to consummate, and the costs associated with, extraordinary transactions, including acquisitions, dispositions and other business combinations, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations; difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including, but not limited to, "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein and in our other filings with the Securities and Exchange Commission (the "SEC"). Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic and other natural disasters such as severe weather events.
There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this report and the information included in our prior releases, reports and other filings with the SEC, the information contained in this report updates and supersedes such information.
Forward-looking statements are based on current plans, estimates, assumptions, and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: The Equity Group Inc.
Jeremy Hellman, CFA (212) 836-9626
jhellman@equityny.com
TRECORA RESOURCES AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
March 31, 2022 (unaudited) |
December 31, 2021 |
||||
ASSETS |
(thousands of dollars, except par value) |
||||
Current Assets |
|||||
Cash |
$ |
31,937 |
$ |
30,535 |
|
Trade receivables, net |
33,572 |
32,811 |
|||
Inventories |
20,355 |
21,134 |
|||
Prepaid expenses and other assets |
3,396 |
4,313 |
|||
Total current assets |
89,260 |
88,793 |
|||
Property, plant and equipment, net |
186,029 |
185,521 |
|||
Intangible assets, net |
10,601 |
11,056 |
|||
Lease right-of-use assets, net |
7,305 |
8,170 |
|||
TOTAL ASSETS |
293,195 |
293,540 |
|||
LIABILITIES |
|||||
Current Liabilities |
|||||
Accounts payable |
12,387 |
12,075 |
|||
Accrued liabilities |
7,123 |
5,873 |
|||
Current portion of long-term debt |
4,194 |
4,194 |
|||
Current portion of lease liabilities |
3,085 |
3,227 |
|||
Current portion of other liabilities |
620 |
626 |
|||
Total current liabilities |
27,409 |
25,995 |
|||
Long-term debt, net of current portion |
36,658 |
37,707 |
|||
Lease liabilities, net of current portion |
4,202 |
4,923 |
|||
Other liabilities, net of current portion |
403 |
417 |
|||
Deferred income taxes |
24,771 |
24,525 |
|||
Total liabilities |
93,443 |
93,567 |
|||
EQUITY |
|||||
Common stock - authorized 40 million shares of $0.10 par |
2,508 |
2,499 |
|||
Additional paid-in capital |
63,406 |
63,260 |
|||
Treasury stock, at cost (1.4 million shares) |
(11,486) |
(11,486) |
|||
Retained earnings |
145,324 |
145,700 |
|||
Total equity |
199,752 |
199,973 |
|||
TOTAL LIABILITIES AND EQUITY |
293,195 |
293,540 |
TRECORA RESOURCES AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
THREE MONTHS ENDED |
|||||
MARCH 31 |
|||||
(unaudited) |
|||||
2022 |
2021 |
||||
(thousands of dollars, except per share amounts) |
|||||
REVENUES |
|||||
Product sales |
$ |
79,061 |
$ |
51,565 |
|
Processing fees |
4,153 |
3,020 |
|||
83,214 |
54,585 |
||||
OPERATING COSTS AND EXPENSES |
|||||
Cost of sales and processing (including depreciation and |
75,321 |
52,240 |
|||
GROSS PROFIT |
7,893 |
2,345 |
|||
GENERAL AND ADMINISTRATIVE EXPENSES |
|||||
General and administrative |
7,533 |
7,332 |
|||
Depreciation |
228 |
226 |
|||
7,761 |
7,558 |
||||
OPERATING INCOME (LOSS) |
132 |
(5,213) |
|||
OTHER INCOME (EXPENSE) |
|||||
Interest expense |
(283) |
(302) |
|||
Miscellaneous income, net |
69 |
110 |
|||
(214) |
(192) |
||||
INCOME (LOSS) BEFORE INCOME TAXES |
(82) |
(5,405) |
|||
INCOME TAX (EXPENSE) BENEFIT |
(294) |
1,001 |
|||
NET INCOME (LOSS) |
(376) |
(4,404) |
|||
Basic Earnings (Loss) per Common Share |
|||||
Net loss (dollars) |
$ |
(0.02) |
$ |
(0.18) |
|
Basic weighted average number of common shares outstanding |
23,600 |
24,861 |
|||
Diluted Earnings (Loss) per Common Share |
|||||
Net loss (dollars) |
$ |
(0.02) |
$ |
(0.18) |
|
Diluted weighted average number of common shares |
23,600 |
24,861 |
TRECORA RESOURCES AND SUBSIDIARIES | ||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||||
EBITDA and Adjusted EBITDA | ||||||||||||
(Thousands of dollars; rounding may apply) | ||||||||||||
THREE MONTHS ENDED |
THREE MONTHS ENDED |
|||||||||||
3/31/2022 |
3/31/2021 |
|||||||||||
SPEC. |
SPEC. |
CORP |
TREC |
SPEC. |
SPEC. |
CORP |
TREC |
|||||
NET INCOME (LOSS) |
$ |
1,765 |
324 |
(2,465) |
(376) |
$ |
205 |
(1,954) |
(2,655) |
(4,404) |
||
Interest expense |
283 |
0 |
0 |
283 |
302 |
0 |
0 |
302 |
||||
Income tax expense (benefit) |
597 |
0 |
(303) |
294 |
(486) |
0 |
(515) |
(1,001) |
||||
Depreciation and amortization |
206 |
22 |
0 |
228 |
200 |
23 |
3 |
226 |
||||
Depreciation and amortization in cost of sales |
2,523 |
1,556 |
0 |
4,079 |
2,602 |
1,452 |
0 |
4,054 |
||||
EBITDA |
5,374 |
1,902 |
(2,768) |
4,508 |
2,823 |
(479) |
(3,167) |
(823) |
||||
Stock-based compensation |
0 |
0 |
524 |
524 |
0 |
0 |
571 |
571 |
||||
Gain on disposal of assets |
0 |
0 |
0 |
0 |
(254) |
0 |
0 |
(254) |
||||
Costs for professional services associated with |
0 |
0 |
210 |
210 |
0 |
0 |
370 |
370 |
||||
Other non-recurring costs |
515 |
0 |
0 |
515 |
0 |
0 |
0 |
0 |
||||
Adjusted EBITDA |
$ |
5,889 |
1,902 |
(2,034) |
5,757 |
$ |
2,569 |
(479) |
(2,226) |
(136) |
||
1 Based on 23.6 million shares outstanding
2 Based on 24.9 million shares outstanding
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-announces-first-quarter-2022-results-301540068.html
SOURCE Trecora Resources
SUGAR LAND, Texas, April 25, 2022 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced the planned release of its first quarter 2022 financial results after market close on Wednesday, May 4, 2022. President and Chief Executive Officer, Patrick D. Quarles, and Chief Financial Officer, Sami Ahmad, will host a conference call on Thursday, May 5, 2022 at 10:00 a.m. Central Time/11:00 a.m. Eastern Time to discuss the results.
Date: |
Thursday, May 5, 2022 |
Time: |
11:00 a.m. Eastern Time |
Toll-free dial-in number: |
+1-866-417-5724 |
International dial-in number: |
+1-409-217-8234 |
Conference ID: |
2060048 |
Webcast: |
The conference call will be simulcast live and available for replay via the investor relations section of the Company's website at http://www.trecora.com/
The presentation slides will be available before the call begins under the investor relations section of the Company's website at https://ir.trecora.com/presentations
A replay of the conference call will be available approximately two hours following the conclusion of the call through May 7, 2022.
Toll-free replay number: |
+1 855-859-2056 |
International replay number: |
+1 404-537-3406 |
Replay PIN number: |
2060048 |
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Jeremy Hellman, CFA (212) 836-9626
jhellman@equityny.com
View original content:https://www.prnewswire.com/news-releases/trecora-resources-to-host-first-quarter-2022-earnings-conference-call-on-thursday-may-5th-301532318.html
SOURCE Trecora Resources
]]>SUGAR LAND, Texas, March 23, 2022 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today issued the following statement regarding Ortelius Advisors' ("Ortelius") letter to Trecora stockholders yesterday:
"Trecora's Board of Directors and management team are focused on delivering value for our shareholders. While we are confident that the Company is positioned for strong, profitable growth, we also remain open to exploring all value-enhancing opportunities.
To that end, we have spoken with the principal of Ortelius on dozens of occasions over the past eighteen months and have considered his input seriously and objectively. In those conversations, Ortelius has made a wide assortment of claims and proposals. At various times, Ortelius has wanted us to:
Ortelius has also suggested several permutations of those ideas at various times.
Despite professing an interest in buying all of Trecora (or a substantial minority interest in Trecora) at different times over the last eighteen months, Ortelius has never submitted an indication of value and has, oddly, refused to even sign a standard non-disclosure agreement so that the Company could provide Ortelius with the information it would seemingly need to make such a proposal.
Ortelius now publicly claims to have a "plan to improve operating and financial performance." However, if this plan does exist, Ortelius has yet to share it with Trecora's Board or management team despite having had ample opportunity to do so.
Nevertheless, Trecora's Board and management team have continued to engage constructively with Ortelius in good faith. In the Fall, for example, the Board interviewed three Ortelius director candidates and offered to appoint one of them to the Board, without even requesting a typical standstill. Ortelius curiously rejected this offer.
Last month, Ortelius surprised us again by indicating its intention to nominate six directors to our seven-person Board. Ortelius appears now to be seeking to do at the ballot box what it has been, so far, unable and unwilling to do with a checkbook: acquire control of the Company without competition from other parties.
Earlier this month, in an effort to avoid a costly and disruptive proxy contest, two of the Company's independent directors further engaged with the principal of Ortelius in order to find an amicable resolution. During this conversation, Ortelius suggested another new proposal, asking to seat three of its director candidates and for the Board to waive certain protective provisions of Delaware law, which would enable Ortelius to buy the Company later without customary protections for other shareholders. Despite this new request that again appears to favor only Ortelius' interests, the Trecora Board has begun the process of interviewing two of the latest director candidates that Ortelius has recommended to the Board, in an attempt to find a resolution that is in the best interest of all shareholders.
In short, Ortelius' assertion in its letter that the Board has "refused to genuinely engage" is simply false. Trecora's Board and management team have had dozens of interactions with Ortelius and considered almost as many new and seemingly impulsive ideas from Ortelius. Most of these suggestions do not appear to be about creating value for all our shareholders but rather aimed at providing Ortelius a special, substantial economic interest in Trecora, or control of Trecora, without Ortelius providing a premium to other shareholders.
The Trecora Board will carefully review and evaluate the Board candidates proposed by Ortelius and will present its recommendations regarding the director election in the Company's definitive proxy statement to be filed with the U.S. Securities and Exchange Commission. The Company has not yet announced the date of its 2022 Annual Meeting of Stockholders."
Shareholders are not required to take any action at this time.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Important Additional Information
Trecora, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company's stockholders in connection with the Company's 2022 Annual Meeting of Stockholders. The Company intends to file a proxy statement and BLUE proxy card with the U.S. Securities and Exchange Commission ("SEC") in connection with any such solicitation of proxies from the Company's stockholders. STOCKHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING BLUE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. The Company's definitive proxy statement for the 2021 Annual Meeting of Stockholders contains information regarding the direct and indirect interests, by security holdings or otherwise, of the Company's directors and executive officers in the Company's securities. Information regarding subsequent changes to their holdings of the Company's securities can be found in the SEC filings on Forms 3, 4 and 5, which are available on the Company's website at https://ir.trecora.com by selecting the "SEC Filings" link or through the SEC's website at www.sec.gov. Information can also be found in the Company's other SEC filings, including the Company's definitive proxy statement for the 2021 Annual Meeting of Stockholders and its Annual Report on Form 10-K for the year ended December 31, 2021. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2022 Annual Meeting of Stockholders. Stockholders will be able to obtain the definitive proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge on the Company's website at https://ir.trecora.com by selecting the "SEC Filings" link.
Investor Relations Contact
Jeremy Hellman, CFA
(212) 836-9626
jhellman@equityny.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-comments-on-letter-from-ortelius-advisors-301508519.html
SOURCE Trecora Resources
]]>SUGAR LAND, Texas, March 8, 2022 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced financial results for the fourth quarter and full year ended December 31, 2021.
Executive Commentary
"2021 was a turning point for Trecora Resources. After a quick recovery from the Texas freeze event early in the year, we saw a resurgence of demand in our Specialty Petrochemicals and Specialty Waxes segments along with new demand for our custom processing services. The demand growth allowed us to drive product pricing of both prime products and specialty wax products. By year end, we realized a $1.05 per gallon price increases for prime products and $0.23 per pound of wax price increases. We also successfully converted 5 growth projects into new custom processing commitments with our customers. We invested in the expansion of our owned truck fleet for delivery to our prime products customers and maintained high customer service levels despite a challenging supply chain. By year-end, this commitment to reliable, high purity supply allowed us to secure customer contract commitments for 95% of all new prime product demand into the new polyethylene and polyisocyanurate plants coming to market in 2021 and 2022 in North America."
"Continued and growing demand for our products, multiple successful price increases, ample liquidity and a strong balance sheet enabled more than $11 million of share re-purchases during the year," stated Pat Quarles, Trecora's President and Chief Executive Officer.
Sami Ahmad, Trecora's Chief Financial Officer stated, "We continued our focus on controlling costs and capital expenditures, particularly given the pervasive supply chain and inflationary challenges in the economy. We controlled costs in a variety of areas including logistics, product handling and plant maintenance. Capital expenditures for the year were $14.2 million with nearly $4 million spent on the multi-year upgrade of our feedstock pipeline at South Hampton and about $2 million for repairs following the 2021 Texas freeze event. The remaining $8 million of capital expenditures were for plant maintenance and compliance at both facilities. Cash flow from operations for the full year 2021 was $4.4 million, including a negative working capital impact of approximately $19 million mainly due to sharp feedstock price increases.
"Our cash balance at the end of the year stood at nearly $31 million, and our $75 million revolver remained undrawn. Total debt at the end of the year was $41.9 million. We achieved forgiveness of the remaining $3.9 million PPP loan balance in the fourth quarter of 2021. Finally, we further simplified and streamlined our corporate structure through the sale of all remaining mining assets owned at PEVM, which we dissolved in early 2022," concluded Mr. Ahmad.
Fourth Quarter 2021 Financial Results
Total revenue in the fourth quarter of 2021 was $74.6 million, compared to $58.1 million in the fourth quarter of 2020. The 28.3% year-over-year increase was primarily due to increased revenues in the Specialty Petrochemicals segment that resulted from sharply higher average selling prices which rose 31.2% compared with the prior year.
Gross profit in the fourth quarter of 2021 was $6.2 million, or 8.4% of total revenues, compared to $6.0 million, or 10.3% of total revenues in the fourth quarter of 2020. Gross margins contracted compared to the prior year period due to reduced Specialty Petrochemicals volume partially offset by expansion of by-product spreads. Operating loss in the fourth quarter of 2021 was $(0.8) million, compared to operating loss of $(0.4) million in the fourth quarter of 2020, due primarily to increased General and Administrative expense of approximately $0.7 million. Included in fourth quarter General and Administrative expense was approximately $0.5 million of remaining, non-recurring expense associated with professional services and due diligence work related to a significant M&A opportunity which the Company terminated in the third quarter.
Net income from continuing operations in the fourth quarter of 2021 was $5.2 million, or $0.221 per diluted share, compared to net loss of $(0.1) million, or $(0.01)2 per diluted share, in the fourth quarter of 2020. Adjusted EBITDA from continuing operations was $5.2 million for the fourth quarter of 2021, compared with $5.3 million in the fourth quarter of 2020.
Specialty Petrochemicals
Specialty Petrochemicals volume in the fourth quarter of 2021 was 20.2 million gallons and 22.1 million gallons in the fourth quarter of 2020. Specialty Petrochemicals gross revenue increased 33.5% year-over-year as sharply higher product prices driven by formula and non-formula price increases more than offset the decline in volumes.
Prime product volume in the fourth quarter of 2021 was 16.3 million gallons and 17.6 million gallons in the fourth quarter of 2020. The decline in prime product sales volume compared to fourth quarter of 2020 was primarily due to lower sales to Canadian Oil Sands customers. By-product sales volume was 3.9 million gallons in the fourth quarter of 2021.
Specialty Petrochemicals net income was $8.6 million in the fourth quarter of 2021, compared to net income of $4.8 million in the fourth quarter of 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the fourth quarter of 2021 was $6.4 million, compared to $6.4 million in the fourth quarter of 2020.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS ENDED |
||||
DECEMBER 31, |
|||||
2021 |
2020 |
% Change |
|||
Product sales |
$63,934 |
$47,852 |
33.6% |
||
Processing fees |
1,598 |
1,249 |
27.9% |
||
Gross revenues |
$65,532 |
$49,101 |
33.5% |
||
Operating income before depreciation and amortization |
6,360 |
6,436 |
(1.2%) |
||
Operating income |
3,611 |
3,730 |
(3.2%) |
||
Net income before taxes |
7,248 |
3,393 |
113.6% |
||
Depreciation and amortization |
2,750 |
2,706 |
1.6% |
||
Adjusted EBITDA from continuing operations (*) |
6,351 |
6,442 |
(1.4%) |
||
Capital expenditures |
958 |
2,267 |
(57.7%) |
(*) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure. |
____________________
1 Based on 24.7 million shares outstanding
2 Based on 24.8 million shares outstanding
Specialty Waxes
Specialty Waxes reported revenues of approximately $9.1 million in the fourth quarter of 2021, relatively unchanged from the fourth quarter of 2020. Revenues included approximately $7.0 million of wax product sales in the fourth quarter of 2021, and processing revenues of $2.1 million. Wax revenues were relatively flat as higher selling prices offset lower sales volumes. Wax sales volumes were 8.4 million pounds in the fourth quarter of 2021 compared to 9.0 million pounds in the fourth quarter 2020.
Specialty Waxes net loss was $(1.3) million in the fourth quarter of 2021, compared to net loss of $(3.2) million in the fourth quarter of 2020. Adjusted EBITDA from continuing operations for Specialty Waxes in the fourth quarter of 2021 was $0.2 million, compared with $(0.2) million in the fourth quarter of 2020.
Processing fees were approximately $2.1 million in the fourth quarter of 2021, an increase of approximately $0.4 million from the fourth quarter of 2020. Processing fees were constrained by delays in receiving input materials from customers due to supply chain difficulties combined with plant operating issues.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS ENDED |
||
DECEMBER 31, |
|||
2021 |
2020 |
% Change |
|
Product sales |
$6,958 |
$7,063 |
(1.5%) |
Processing fees |
2,129 |
1,974 |
7.9% |
Gross revenues |
$9,087 |
$9,037 |
0.6% |
Operating income before depreciation and amortization |
239 |
(247) |
196.8% |
Operating income (loss) |
(1,322) |
(1,676) |
21.1% |
Net income (loss) before taxes |
(1,333) |
(1,626) |
18.0% |
Depreciation and amortization |
1,561 |
1,429 |
9.2% |
Adjusted EBITDA from continuing operations (*) |
227 |
(169) |
234.7% |
Capital expenditures |
899 |
775 |
16.0% |
(*) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure. |
Year End 2021 Financial Results
Total revenue for the full year 2021 was $272.7 million, compared to $208.6 million for the full year 2020, an increase of 30.7%. This increase was primarily due to higher selling prices the company was able to pass on to customers in response to increased input prices.
Gross profit for the full year 2021 was $28.6 million, or 10.5% of total revenues, compared to $28.7 million, or 13.7% of total revenues, for the same period in 2020. Operating loss during the full year 2021 was $(3.1) million, compared to operating income of $2.9 million during 2020. Included in full year General and Administrative expense was approximately $4.5 million of non-recurring expense associated with professional services and due diligence work related to a significant M&A opportunity which the Company terminated in the third quarter.
Net income from continuing operations for the full year 2021 was $5.0 million, or $0.203 per diluted share, which was level with net income from continuing operations of $5.0 million, or $0.204 per diluted share, for 2020. Fiscal year 2021 results benefitted from a non-recurring gain of $6.1 million resulting from the extinguishment of debt related to the Company's PPP loans along with a reduction in interest expense of $1.3 million compared to 2020. Adjusted EBITDA from continuing operations in 2021 was $21.6 million, compared to Adjusted EBITDA from continuing operations of $22.2 million in 2020. As previously disclosed, Adjusted EBITDA for 2021 was negatively impacted by approximately $3.5 million due to the Texas freeze event in February 2021.
____________________
3 Based on 25.1 million shares outstanding
4 Based on 25.4 million shares outstanding
Specialty Petrochemicals
Specialty Petrochemicals net income was $16.7 million for the full year 2021, compared to net income of $14.9 million for the same period in 2020. Specialty Petrochemicals volume during 2021 was 78.2 million gallons, compared to 75.1 million gallons in 2020. Prime product volume during 2021 was 65.0 million gallons, compared to 61.7 million gallons in 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals for the full year 2021 decreased slightly to $25.9 million, compared to $26.4 million 2020.
Dollar amounts in thousands/rounding may apply |
YEAR END |
|||
DECEMBER 31, |
||||
2021 |
2020 |
% Change |
||
Product sales |
$228,293 |
$167,054 |
36.7% |
|
Processing fees |
5,798 |
5,296 |
9.5% |
|
Gross revenues |
$234,091 |
$172,350 |
35.8% |
|
Operating income before depreciation and amortization |
25,930 |
26,438 |
(1.9)% |
|
Operating income |
14,748 |
15,827 |
(6.8)% |
|
Net income before taxes |
17,722 |
13,294 |
33.3% |
|
Depreciation and amortization |
11,183 |
10,611 |
5.4% |
|
Adjusted EBITDA from continuing operations (*) |
25,895 |
26,398 |
(1.9)% |
|
Capital expenditures |
11,633 |
11,334 |
2.6% |
(*) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure. |
Specialty Waxes
Specialty Waxes net loss was $(0.8) million for the full year 2021 compared to net loss of $(3.6) million in 2020. Specialty Waxes reported revenues of $38.6 million during the full year 2021, a 6.4% increase from 2020. Revenues included $29.2 million of wax product sales and $9.4 million of processing fees. Wax revenues increased 15.5% during 2021 versus 2020 due to higher selling prices. Adjusted EBITDA from continuing operations for Specialty Waxes in 2021 was $3.1 million, compared to $2.0 million in 2020.
Dollar amounts in thousands/rounding may apply |
YEAR END |
|||
DECEMBER 31, |
||||
2021 |
2020 |
% Change |
||
Product sales |
$29,246 |
$25,321 |
15.5% |
|
Processing fees |
9,353 |
10,955 |
(14.6%) |
|
Gross revenues |
$38,599 |
$36,276 |
6.4% |
|
Operating income before depreciation and amortization |
3,120 |
1,762 |
77.1% |
|
Operating loss |
(2,988) |
(3,760) |
20.5% |
|
Net income (loss) before taxes |
(800) |
(3,606) |
77.8% |
|
Depreciation and amortization |
6,108 |
5,522 |
10.6% |
|
Adjusted EBITDA from continuing operations (*) |
3,119 |
1,961 |
59.1% |
|
Capital expenditures |
2,519 |
2,017 |
24.9% |
(*) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure. |
Outlook
"We enter 2022 optimistic on multiple fronts. COVID-19 impacts appear to be fading and we are hopeful that continues to be the case. While supply chain constraints persist in certain areas, our rail and truck fleets are well positioned to supply the new demand growth we see in the year for prime products. We expect our successes in converting our growth projects to new commercial commitments to drive meaningful growth in our custom processing revenues. The sharp increase in natural gasoline prices driven by the conflict in Ukraine are a risk. However, with two-thirds of our prime product prices tied to feedstock costs we believe we have significant protection. Based on the strong growth we see early in 2022, we expect our full year Adjusted EBITDA to range between $27 million and $31 million.
Earnings Call
Tomorrow's conference call, on March 9, 2022, at 10:00 am Eastern Time, will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com/ or at https://edge.media-server.com/mmc/p/ogthqjbq. A replay of the call will also be available through the same link until March 9, 2023.
To participate via telephone, callers should dial in at least ten to fifteen minutes prior to the 10:00 am Eastern Time start; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 6267010. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 6267010 for the replay.
Use of Non-GAAP Measures
This earnings press release includes non-GAAP financial measures of EBITDA from continuing operations and Adjusted EBITDA from continuing operations and provide reconciliations from our most directly comparable GAAP financial measures to those measures.
We believe these financial measures provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We also believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.
We define EBITDA from continuing operations as net income (loss) from continuing operations plus interest expense, income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA from continuing operations as EBITDA from continuing operations net of the impact of items we do not consider indicative of our ongoing operating performance, including share-based compensation, gains, or losses on disposal of assets, gains or losses on extinguishment of debt and costs for professional services associated with M&A and strategic initiatives. These non-GAAP measures have been reconciled to the nearest GAAP measure for historical periods in the tables below entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures." However, the Company is unable to reconcile its expectations regarding Adjusted EBITDA for the full year 2022 to the most directly comparable GAAP measures without unreasonable efforts because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures.
Forward-Looking Statements
Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to the impacts of the COVID-19 pandemic on our business, financial results and financial condition and that of our customers, suppliers, and other counterparties; general economic and financial conditions domestically and internationally; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock and product prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events, health epidemics and pandemics (including the COVID-19 pandemic) and terrorist attacks; our ability to consummate, and the costs associated with, extraordinary transactions, including acquisitions, dispositions and other business combinations, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations; difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including, but not limited to, "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein and in our other filings with the Securities and Exchange Commission (the "SEC"). Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic and other natural disasters such as severe weather events.
There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this report and the information included in our prior releases, reports and other filings with the SEC, the information contained in this report updates and supersedes such information.
Forward-looking statements are based on current plans, estimates, assumptions, and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: The Equity Group Inc.
Jeremy Hellman, CFA (212) 836-9626
jhellman@equityny.com
TRECORA RESOURCES AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
December 31, 2021 |
December 31, 2020 |
|||
ASSETS |
(thousands of dollars, except par value) |
|||
Current Assets |
||||
Cash |
$ 30,535 |
$ 55,664 |
||
Trade receivables, net |
32,811 |
25,301 |
||
Inventories |
21,134 |
12,945 |
||
Prepaid expenses and other assets |
4,313 |
9,198 |
||
Taxes receivable |
- |
2,788 |
||
Total current assets |
88,793 |
105,896 |
||
Plant, pipeline and equipment, net |
185,521 |
187,104 |
||
Lease right-of-use assets, net |
8,170 |
10,528 |
||
Intangible assets, net |
11,056 |
12,893 |
||
Mineral properties |
- |
412 |
||
TOTAL ASSETS |
293,540 |
316,833 |
||
LIABILITIES |
||||
Current Liabilities |
||||
Accounts payable |
12,075 |
14,447 |
||
Accrued liabilities |
5,873 |
6,857 |
||
Current portion of long-term debt |
4,194 |
4,194 |
||
Current portion of lease liabilities |
3,227 |
3,195 |
||
Current portion of other liabilities |
626 |
891 |
||
Total current liabilities |
25,995 |
29,584 |
||
CARES Act, PPP Loans, net of current portion |
- |
6,123 |
||
Long-term debt, net of current portion |
37,707 |
41,901 |
||
Lease liabilities, net of current portion |
4,923 |
7,333 |
||
Other liabilities, net of current portion |
417 |
968 |
||
Deferred income taxes |
24,525 |
26,517 |
||
Total liabilities |
93,567 |
112,426 |
||
EQUITY |
||||
Common stock - authorized 40 million shares of $0.10 par value; issued 25.0 million and 24.8 million in 2021 and 2020, respectively, and outstanding 23.6 million and 24.8 million in 2021 and 2020, respectively |
2,499 |
2,483 |
||
Additional paid-in capital |
63,260 |
61,311 |
||
Treasury stock, at cost (1.4 million shares) |
(11,486) |
- |
||
Retained earnings |
145,700 |
140,324 |
||
Total Trecora Resources Stockholders' Equity |
199,973 |
204,118 |
||
Noncontrolling Interest |
- |
289 |
||
Total equity |
199,973 |
204,407 |
||
TOTAL LIABILITIES AND EQUITY |
293,540 |
316,833 |
TRECORA RESOURCES AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
THREE MONTHS ENDED |
TWELVE MONTHS ENDED |
|||||||
DECEMBER 31, |
DECEMBER 31, |
|||||||
(unaudited) |
(unaudited) |
|||||||
2021 |
2020 |
2021 |
2020 |
|||||
(Thousands of dollars, except per share amounts) |
||||||||
Revenues |
||||||||
Product sales |
$ 70,892 |
$ 54,915 |
$ 257,539 |
$ 192,375 |
||||
Processing fees |
3,727 |
3,223 |
15,151 |
16,251 |
||||
74,619 |
58,138 |
272,690 |
208,626 |
|||||
Operating costs and expenses |
||||||||
Cost of sales and processing (including depreciation and amortization of $4,098, $3,927, $16,415 and $15,300, respectively) |
68,383 |
52,162 |
244,114 |
179,948 |
||||
Gross Profit |
6,236 |
5,976 |
28,576 |
28,678 |
||||
General and Administrative Expenses |
||||||||
General and administrative |
6,194 |
5,640 |
26,123 |
24,334 |
||||
Professional services associated with M&A and strategic initiatives |
656 |
523 |
4,655 |
558 |
||||
Depreciation |
212 |
211 |
882 |
848 |
||||
7,062 |
6,374 |
31,660 |
25,740 |
|||||
Operating income (loss) |
-826 |
-398 |
-3,084 |
2,938 |
||||
Other income (expense) |
||||||||
Interest expense |
-287 |
-332 |
-1,205 |
-2,491 |
||||
Gain on extinguishment of debt |
3,935 |
- |
6,123 |
- |
||||
Gain (loss) on disposal of assets |
- |
-30 |
279 |
-39 |
||||
Miscellaneous income |
552 |
593 |
486 |
595 |
||||
4,200 |
231 |
5,683 |
-1,935 |
|||||
Income (loss) from continuing operations before income taxes |
3,374 |
-167 |
2,599 |
1,003 |
||||
Income tax (expense) benefit |
1,855 |
21 |
2,364 |
3,963 |
||||
Income (loss) from continuing operations |
5,229 |
-146 |
4,963 |
4,966 |
||||
Income from discontinued operations, net of tax |
- |
30 |
- |
26,209 |
||||
Net income (loss) |
5,229 |
-116 |
4,963 |
31,175 |
||||
Basic earnings (loss) per common share |
||||||||
Net income (loss) from continuing operations (dollars) |
$ 0.22 |
$ (0.01) |
$ 0.20 |
$ 0.20 |
||||
Net income from discontinued operations, net of tax (dollars) |
$ - |
$ - |
$ - |
$ 1.06 |
||||
Net income (loss) (dollars) |
$ 0.22 |
$ (0.01) |
$ 0.20 |
$ 1.26 |
||||
Basic weighted average number of common shares outstanding |
24,148 |
24,823 |
24,459 |
24,802 |
||||
Diluted earnings (loss) per common share |
||||||||
Net income (loss) from continuing operations (dollars) |
$ 0.21 |
$ (0.01) |
$ 0.20 |
$ 0.20 |
||||
Net income from discontinued operations, net of tax (dollars) |
$ - |
$ - |
$ - |
$ 1.03 |
||||
Net income (loss) (dollars) |
$ 0.21 |
$ (0.01) |
$ 0.20 |
$ 1.23 |
||||
Diluted weighted average number of common shares outstanding |
24,735 |
24,823 |
25,081 |
25,360 |
TRECORA RESOURCES AND SUBSIDIARIES | ||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||||
EBITDA from continuing operations and Adjusted EBITDA from continuing operations | ||||||||||||
(Thousands of dollars; rounding may apply) | ||||||||||||
THREE MONTHS ENDED |
THREE MONTHS ENDED |
|||||||||||
12/31/2021 |
12/31/2020 |
|||||||||||
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
|||||
NET INCOME (LOSS) |
$ 8,600 |
$ (1,333) |
$ (2,038) |
$ 5,229 |
$ 4,758 |
$ (3,221) |
$ (1,653) |
$ (116) |
||||
Income from discontinued operations, net of tax |
0 |
0 |
0 |
0 |
0 |
0 |
30 |
30 |
||||
Income (loss) from continuing operations * |
$ 8,600 |
$ (1,333) |
$ (2,038) |
$ 5,229 |
$ 4,758 |
$ (3,221) |
$ (1,683) |
$ (146) |
||||
Interest expense |
287 |
0 |
0 |
287 |
331 |
0 |
1 |
332 |
||||
Income tax expense (benefit) |
(1,352) |
0 |
(503) |
(1,855) |
(1,354) |
1,595 |
(262) |
(21) |
||||
Depreciation and amortization |
190 |
21 |
1 |
212 |
185 |
23 |
2 |
210 |
||||
Depreciation and amortization in cost of sales |
2,560 |
1,539 |
0 |
4,099 |
2,521 |
1,406 |
0 |
3,927 |
||||
EBITDA from continuing operations * |
10,285 |
227 |
(2,540) |
7,972 |
6,441 |
(197) |
(1,942) |
4,302 |
||||
Stock-based compensation |
0 |
0 |
552 |
552 |
0 |
0 |
490 |
490 |
||||
Gain on extinguishment of debt** |
(3,935) |
0 |
0 |
(3,935) |
0 |
0 |
0 |
0 |
||||
Gain on disposal of assets |
1 |
0 |
0 |
1 |
2 |
28 |
0 |
30 |
||||
Professional services associated with M&A and strategic initiatives |
0 |
0 |
657 |
657 |
0 |
0 |
523 |
523 |
||||
Adjusted EBITDA from continuing operations * |
$ 6,351 |
$ 227 |
$ (1,331) |
$ 5,247 |
$ 6,443 |
$ (169) |
$ (929) |
$ 5,345 |
||||
TWELVE MONTHS ENDED |
TWELVE MONTHS ENDED |
|||||||||||
12/31/2021 |
12/31/2020 |
|||||||||||
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
|||||
NET INCOME (LOSS) |
$ 16,710 |
$ (800) |
$ (10,947) |
$ 4,963 |
$ 14,908 |
$ (3,606) |
$ 19,873 |
$ 31,175 |
||||
Income from discontinued operations, net of tax |
0 |
0 |
0 |
0 |
0 |
0 |
26,209 |
26,209 |
||||
Income (Loss) from continuing operations * |
$ 16,710 |
$ (800) |
$ (10,947) |
$ 4,963 |
$ 14,908 |
$ (3,606) |
$ (6,336) |
$ 4,966 |
||||
Interest expense |
1,204 |
0 |
1 |
1,205 |
2,489 |
0 |
2 |
2,491 |
||||
Income tax expense (benefit) |
1,012 |
0 |
(3,376) |
(2,364) |
(1,603) |
0 |
(2,360) |
(3,963) |
||||
Depreciation and amortization |
785 |
90 |
7 |
882 |
739 |
94 |
15 |
848 |
||||
Depreciation and amortization in cost of sales |
10,398 |
6,017 |
0 |
16,415 |
9,872 |
5,428 |
0 |
15,300 |
||||
EBITDA from continuing operations * |
30,109 |
5,307 |
(14,315) |
21,101 |
26,405 |
1,916 |
(8,679) |
19,642 |
||||
Stock-based compensation |
0 |
0 |
2,247 |
2,247 |
0 |
0 |
1,912 |
1,912 |
||||
Gain on extinguishment of debt** |
(3,935) |
(2,188) |
0 |
(6,123) |
0 |
0 |
0 |
0 |
||||
(Gain) Loss on disposal of assets |
(279) |
0 |
0 |
(279) |
(6) |
45 |
0 |
39 |
||||
Professional services associated with M&A and strategic initiatives |
0 |
0 |
4,655 |
4,655 |
0 |
0 |
558 |
558 |
||||
Adjusted EBITDA from continuing operations * |
$ 25,895 |
$ 3,119 |
$ (7,413) |
$ 21,601 |
$ 26,399 |
$ 1,961 |
$ (6,209) |
$ 22,151 |
||||
* Discontinued Operations only applicable within the Corporate segment |
||||||||||||
** Extinguishment of debt is directly related to the forgiveness of the PPP Loans. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-announces-fourth-quarter-and-full-year-2021-results-301498355.html
SOURCE Trecora Resources
SUGAR LAND, Texas, Feb. 17, 2022 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced the planned release of its fourth quarter 2021 financial results after market close on Tuesday, March 8, 2022. President and Chief Executive Officer, Patrick D. Quarles, and Chief Financial Officer, Sami Ahmad, will host a conference call on Wednesday, March 9, 2022 at 9:00 a.m. Central Time/10:00 a.m. Eastern Time to discuss the results.
Date: |
Wednesday, March 9, 2022 |
Time: |
10:00 a.m. Eastern Time |
Toll-free dial-in number: |
+1-866-417-5724 |
International dial-in number: |
+1-409-217-8234 |
Conference ID: |
6184887 |
Webcast: |
The conference call will be simulcast live and available for replay via the investor relations section of the Company's website at http://www.trecora.com/
The presentation slides will be available before the call begins under the investor relations section of the Company's website at https://ir.trecora.com/presentations
A replay of the conference call will be available approximately two hours following the conclusion of the call through March 11, 2022.
Toll-free replay number: |
+1 855-859-2056 |
International replay number: |
+1 404-537-3406 |
Replay PIN number: |
6184887 |
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: The Equity Group Inc.
Jeremy Hellman, CFA (212) 836-9626
jhellman@equityny.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-to-host-fourth-quarter-2021-earnings-conference-call-on-wednesday-march-9th-301484428.html
SOURCE Trecora Resources
]]>PEARL RIVER, N.Y. and SILSBEE, Texas, Jan. 25, 2022 /PRNewswire/ -- Anellotech and South Hampton Resources, Inc. (SHR), a subsidiary of Trecora Resources, (NYSE: TREC), announced today the renewal of their agreement for SHR to serve as site host and provide operations services for Anellotech's TCat-8™ process development pilot plant, which is located inside of SHR's Silsbee, Texas production plant. SHR owns and operates a 128-acre specialty petrochemicals facility at the Silsbee site, specializing in high purity hydrocarbons. SHR originally began its site hosting relationship with Anellotech in 2016 with Anellotech's development of its Bio-TCat process for producing petrochemicals from wood.
The original services agreement between Anellotech and SHR allowed Anellotech to install and then operate the TCat-8 unit inside the SHR plant. SHR also provides a range of site services, including provision of fully-trained plant and control room operators to assist in routine operations of the highly instrumented and automated plant, as well as maintenance services. This has allowed Anellotech's engineers to focus on the Bio-TCat research program, which featured more than 5,000 hours of successful TCat-8® pilot plant operation, produce tonne quantities of BTX aromatic product from pine wood feedstock, and obtain the data necessary for process design and commercialization.
The TCat-8 unit produced the bio-p-Xylene that was used by Suntory, a global consumer beverage company, to make 100% bio-PET resin and successfully produce prototype PET beverage bottles, as they announced on Dec. 3rd 2021.
Going forward under the renewed agreement with SHR, Anellotech intends to continue to conduct studies for Anellotech's Bio-TCat process as the bio-based technology moves into its commercialization phase. Additionally, Anellotech will transition the TCat-8 unit to conduct the large pilot plant development and demonstration of Anellotech's new Plas-TCat™ process for making petrochemicals from plastic waste.
"Anellotech has been very pleased with the quality of the SHR facility and its people, which allowed us to successfully conduct over 5,000 hours of plant operation on our Bio-TCat Process. We look forward to running additional Bio-TCat process improvement studies and developing our Plas-TCat Process at the SHR site with the able assistance of the SHR team," said David Sudolsky, President and CEO of Anellotech.
"I am delighted to announce the renewal of our site host and operations services agreement with Anellotech. SHR and Anellotech have enjoyed a very productive relationship under our original agreement resulting in their successful launch of the TCat-8 process. We look forward to supporting the expansion, operation and commercialization of the Bio-TCat Process in this next phase of our relationship. This success further demonstrates why SHR is a partner of choice for demonstration and launch of new sustainable technologies," said Patrick Quarles, President & CEO of Trecora Resources.
About Anellotech
Founded in 2008, Anellotech (http://www.anellotech.com) is a sustainable technology company focused on commercializing the innovative production of cost-competitive renewable chemicals and fuels from non-food biomass or waste plastics. Its patented Bio-TCat™ technology is an efficient thermal catalytic process for converting biomass into benzene, toluene and xylene, which are chemically identical to their petroleum-based counterparts. In addition to BTX, Bio-TCat™ technology produces heavier aromatics AnelloMate™, which can be used to make high-quality biofuels blendstock for transportation fuel to help decarbonize transportation fuels supply chains. Engineering work to design the first commercial Bio-TCat plant is underway by Anellotech and its R&D, engineering and licensing partners IFPEN and Axens.
Anellotech's R&D team is now focused on Plas-TCat™, a development-stage process technology aiming to convert mixed waste plastics into commodity chemicals such as olefins and aromatics, the primary chemicals used to make plastic packaging and other products.
About Trecora Resources (TREC)
TREC (http://www.trecora.com) owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
For further information, contact:
Trecora
The Equity Group Inc.
Jeremy Hellman, CFA
jhellman@equityny.com
(212) 836-9626
Anellotech:
David Sudolsky, President
Information@anellotech.com
USA 845-735-7700
View original content to download multimedia:https://www.prnewswire.com/news-releases/anellotech-and-trecora-resources-subsidiary-south-hampton-resources-renew-site-host-and-services-agreement-for-process-development-pilot-plant-301466911.html
SOURCE Trecora Resources
SUGAR LAND, Texas, Nov. 29, 2021 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced Patrick Quarles President & CEO, and Sami Ahmad, CFO will present and host one-on-one meetings with investors at the Sidoti Virtual Micro Cap Conference, taking place on Wednesday, December 8, 2021.
The presentation will begin at 11:30 am ET on December 8, 2021.and can be accessed live here: https://sidoti.zoom.us/webinar/register/WN_qynbi_NEQuK15BAsGxoSSw. Trecora Resources will also host virtual one-on-ones with investors on that same day. To register for the presentation or one-on-ones, visit www.sidoti.com/events. Registration is free and you don't need to be a Sidoti client
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: The Equity Group Inc.
Jeremy Hellman, CFA (212) 836-9626
jhellman@equityny.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-to-present-at-sidoti-virtual-micro-cap-conference-on-december-8th-301433082.html
SOURCE Trecora Resources
]]>SUGAR LAND, Texas, Nov. 3, 2021 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced financial results for the third quarter ended September 30, 2021.
Executive Commentary
"In the third quarter, the steady improvement in demand following the impacts of the pandemic continued, while cost escalation and supply chain constraints accelerated. Despite these challenges, our solvent and wax volumes grew, benefiting from our owned truck fleet for transporting solvents, and improved feedstock supply to our wax business. Our truck fleet satisfies approximately two-thirds of our trucking needs, which provided a significant benefit as our industry on the whole experienced a sharp increase in trucking rates as well as capacity shortages during the quarter. Not only did having our own fleet allow us to avoid a meaningful amount of cost escalation, it also enabled us to maintain high service levels. Additionally, our wax margins improved due to successful price actions taken across the quarter," stated Pat Quarles, Trecora's President and Chief Executive Officer.
"During the third quarter we had approximately $2.8 million of non-recurring expense associated with professional services and due diligence work related to a significant M&A opportunity. We ultimately determined not to pursue this opportunity because we concluded that it was unlikely to create shareholder value. For the first nine months of 2021, non-recurring expenses relating to this opportunity were approximately $4.0 million," concluded Mr. Quarles.
Sami Ahmad, Trecora's Chief Financial Officer stated, "Investments we have made in optimizing our operations continued to benefit the Company during the third quarter. Volumes increased in both of our segments while we continued to implement price increases in response to rising feedstock, utility and supply chain costs. Cash flow from operations for the first nine months of 2021was $9.3 million, including the benefit of the increase in payables associated with non-recurring professional services and due diligence. Cash flow from operations also includes the significant negative impact of the Texas freeze event earlier in the year as well as a use of cash of $9.2 million for working capital driven by rising prices."
"The Company continues to benefit from a strong balance sheet and liquidity position. Cash balance at the end of the quarter was $44.4 million, and our revolver was undrawn. Total bank debt at the end of the quarter was $42.9 million. Finally, we received notice that the $2.2 million PPP loan for Trecora Chemical was fully forgiven. We expect the remaining $4.0 million PPP loan to also be forgiven. I am confident that we have the financial flexibility to manage our business and execute on our strategic plan," concluded Mr. Ahmad.
Third Quarter 2021 Financial Results
Total revenue in the third quarter of 2021 was $74.6 million, compared to $47.7 million in the third quarter of 2020. This 56.3% year-over-year increase was primarily due to higher selling prices and sales volumes as demand remained strong due to the ongoing economic recovery.
Gross profit in the third quarter of 2021 was $9.0 million, or 12.0% of total revenues, compared to $8.5 million, or 17.7% of total revenues in the third quarter of 2020. Despite rising revenues driven by higher sales volumes and product prices, margins contracted in the third quarter due to sharp increases in feedstock, utility and freight costs. Operating loss in the third quarter of 2021 was $(0.2) million, compared to operating income of $2.5 million in the third quarter of 2020, due primarily to non-recurring SG&A expense of $2.8 million associated with professional services and due diligence work related to a significant M&A opportunity that the Company chose not to pursue.
Net income from continuing operations in the third quarter of 2021 was $1.9 million, or $0.08 per diluted share1, compared to $1.1 million, or $0.04 per diluted share2, in the third quarter of 2020. Adjusted EBITDA from continuing operations was $7.5 million for the third quarter of 2021, compared with $7.1 million in the third quarter of 2020.
______________________
1 Based on 25.0 million shares outstanding
2 Based on 25.4 million shares outstanding
Specialty Petrochemicals
Specialty Petrochemicals volume in the third quarter of 2021 was 20.9 million gallons, compared to 20.0 million gallons in the second quarter of 2021 and 17.9 million gallons in the third quarter of 2020. Sales revenues for Specialty Petrochemicals products increased 61.5% year-over-year. This was primarily due to increased production volume as well as higher product prices.
Prime product volume in the third quarter of 2021 was 17.2 million gallons, compared to 16.9 million gallons in the second quarter of 2021 and 14.7 million gallons in the third quarter of 2020. By-product sales volume was 3.7 million gallons in the third quarter of 2021.
Specialty Petrochemicals net income was $2.6 million in the third quarter of 2021, compared to net income of $4.2 million in the third quarter of 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the third quarter of 2021 was $7.2 million, compared to $8.5 million in the third quarter of 2020.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS |
||||
SEPTEMBER 30, |
|||||
2021 |
2020 |
% Change |
|||
Product sales |
$61,938 |
$37,580 |
65% |
||
Processing fees |
1,419 |
1,644 |
(14)% |
||
Gross revenues |
$63,357 |
$39,224 |
62% |
||
Operating profit before depreciation and amortization |
7,258 |
8,538 |
(15)% |
||
Operating profit |
4,413 |
5,871 |
(25)% |
||
Net profit before taxes |
4,062 |
5,311 |
(24)% |
||
Depreciation and amortization |
2,844 |
2,667 |
7% |
||
Adjusted EBITDA (1) |
7,237 |
8,485 |
(15)% |
||
Capital expenditures |
3,416 |
2,084 |
64% |
||
(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation |
Specialty Waxes
Specialty Waxes had revenues of approximately $11.3 million in the third quarter of 2021, a $2.8 million increase from the third quarter of 2020. Revenues included approximately $8.5 million of wax product sales in the third quarter of 2021, and processing revenues of $2.8 million. Wax revenues were 41.6% higher than the same quarter last year due to higher selling prices and increased volumes. Average selling prices for our specialty waxes increased by approximately 28%in the third quarter of 2021 compared to the same quarter last year. Wax sales volumes increased approximately 10.9% from the third quarter of 2020.
Processing fees were approximately $2.8 million in the third quarter of 2021, an increase of 10.4%, or approximately $0.3 million, from the third quarter of 2020. Processing fees were constrained by delays in receiving input materials from customers due to supply chain issues.
Adjusted EBITDA for Specialty Waxes in the third quarter of 2021 was $2.0 million, compared to $0.1 million in the third quarter of 2020. Specialty Waxes net income was $2.7 million in the third quarter of 2021, compared to net loss of $(1.3) million in the third quarter of 2020.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS |
||||||
SEPTEMBER 30, |
|||||||
2021 |
2020 |
% Change |
|||||
Product sales |
$8,484 |
$5,990 |
42% |
||||
Processing fees |
2,796 |
2,533 |
10% |
||||
Gross revenues |
$11,280 |
$8,523 |
32% |
||||
Operating profit before depreciation and amortization |
2,041 |
89 |
2,193% |
||||
Operating profit (loss) |
489 |
(1,337) |
137% |
||||
Net profit (loss) before taxes |
2,671 |
(1,293) |
307% |
||||
Depreciation and amortization |
1,553 |
1,427 |
9% |
||||
Adjusted EBITDA (1) |
2,035 |
134 |
1,423% |
||||
Capital expenditures |
215 |
641 |
(66%) |
||||
(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation |
First Nine Months 2021 Financial Results
Total revenue in the first nine months of 2021 was $198.1 million, compared to $150.5 million for the same period in 2020, an increase of 31.6%. This increase was primarily due to greater sales volumes and higher selling prices as a result of the economic recovery.
Gross profit in the first nine months of 2021 was $22.3 million, or 11.3% of total revenues, compared to $22.7 million, or 15.1% of total revenues, for the same period in 2020. Operating loss in the first nine months of 2021 was $(2.3) million, compared to operating income of $3.3 million for the same period in 2020.
Net loss from continuing operations in the first nine months of 2021 was $(0.3) million, or $(0.01) per diluted share3, compared to net income from continuing operations of $5.1 million, or $0.20 per diluted share4, for the same period in 2020. The first nine months of 2021 included the negative impact of the Texas freeze event in February, estimated to be $3.5 million, while the first nine months of 2020 included an income tax benefit of $3.9 million. Adjusted EBITDA from continuing operations in the first nine months of 2021 was $16.4 million, compared to Adjusted EBITDA from continuing operations of $16.8 million for the same period in 2020.
______________________
3 Based on 24.6 million shares outstanding.
4 Based on 25.2 million shares outstanding.
Specialty Petrochemicals
Specialty Petrochemicals net income was $8.1 million in the first nine months of 2021, compared to net income of $10.2 million for the same period in 2020. Specialty Petrochemicals volume in the first nine months of 2021 was 58 million gallons, compared to 53 million gallons for the same period in 2020. Prime product volume in the first nine months of 2021 was 48.7 million gallons, compared to 44 million gallons in the same period in 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the first nine months of 2021 decreased to $19.5 million, compared to $20 million for the same period in 2020.
Dollar amounts in thousands/rounding may apply |
NINE MONTHS |
|||
SEPTEMBER 30, |
||||
2021 |
2020 |
% Change |
||
Product sales |
$164,359 |
$119,202 |
38% |
|
Processing fees |
4,200 |
4,047 |
4% |
|
Gross revenues |
$168,559 |
$123,249 |
37% |
|
Operating profit before depreciation and amortization |
19,570 |
20,002 |
(2)% |
|
Operating profit |
11,137 |
12,097 |
(8)% |
|
Net profit before taxes |
10,474 |
9,901 |
6% |
|
Depreciation and amortization |
8,433 |
7,905 |
7% |
|
Adjusted EBITDA from continuing operations (1) |
19,544 |
19,956 |
(2)% |
|
Capital expenditures |
10,675 |
9,067 |
18% |
|
(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation |
Specialty Waxes
Specialty Waxes net income was $0.5 million in the first nine months of 2021 compared to net loss of $(0.4) million for the same period in 2020. Specialty Waxes had revenues of $29.5 million in the first nine months of 2021, an 8.3% increase from the same period of 2020. Revenues included $22.3 million of wax product sales and $7.2 million of processing revenues. Wax sales volumes stayed relatively constant, increasing 0.2% in the first nine months of 2021 from the same period in 2020. Third quarter growth offset weakness felt earlier in the year due in large part to the Texas freeze event, which impacted both wax production and custom processing. Adjusted EBITDA from continuing operations for Specialty Waxes in the first nine months of 2021 was $2.9 million, compared to $2.1 million for the same period in 2020.
Dollar amounts in thousands/rounding may apply |
NINE MONTHS ENDED |
|||
SEPTEMBER 30, |
||||
2021 |
2020 |
% Change |
||
Product sales |
$22,288 |
$18,258 |
22% |
|
Processing fees |
7,224 |
8,981 |
(20%) |
|
Gross revenues |
$29,512 |
$27,239 |
8% |
|
Operating profit before depreciation and amortization |
2,881 |
2,009 |
43% |
|
Operating loss |
(1,666) |
(2,084) |
20% |
|
Net profit (loss) before taxes |
533 |
(1,980) |
(127%) |
|
Depreciation and amortization |
4,547 |
4,093 |
11% |
|
Adjusted EBITDA from continuing operations (1) |
2,892 |
2,130 |
36% |
|
Capital expenditures |
1,620 |
1,242 |
30% |
|
(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation |
Outlook
"In the third quarter we saw a continued resurgence of demand due to the recovery from the pandemic. We currently expect that strength to continue through year-end and into 2022. That broad economic strength has also driven higher costs for our business, in terms of feedstocks and utilities, as well as supply chain services on which our business depends. We have responded with a series of price increases and anticipate further increases through year-end as we look to recover our margins. As several of our contractual customers start up new plants in 2022, we expect to see a positive impact on their purchase levels."
"Our growth program continues to build momentum as we commercialize growth projects and add new ones to our portfolio. We estimate Trecora's growth program to contribute over $7.0 million of incremental EBITDA in 2021 overall."
"We are pleased with our third quarter results, highlighted by significant improvement in our Specialty Waxes segment and strong cash flow generation. This success came against the backdrop of challenging commodity inflation, which we worked hard to offset. We anticipate implementing further price increases in order to grow our margins while market demand is expected to remain strong, enabling us to close out the year in a strong position and enter 2022 with enthusiasm for Trecora's prospects," concluded Mr. Quarles.
Earnings Call
Tomorrow's conference call, on November 4, 2021, at 10:00 am Eastern Time, will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com/ or at https://edge.media-server.com/mmc/p/zcza6anf. A replay of the call will also be available through the same link until November 3, 2022.
To participate via telephone, callers should dial in at least ten to fifteen minutes prior to the 10:00 am Eastern Time start; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 6267010. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 6267010 for the replay.
Use of Non-GAAP Measures
This earnings press release includes non-GAAP financial measures of EBITDA from continuing operations and Adjusted EBITDA from continuing operations and provide reconciliations from our most directly comparable GAAP financial measures to those measures.
We believe these financial measures provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We also believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.
We define EBITDA from continuing operations as net income (loss) from continuing operations plus interest expense, income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA from continuing operations as EBITDA from continuing operations net of the impact of items we do not consider indicative of our ongoing operating performance, including share-based compensation, gains or losses on disposal of assets, gains or losses on extinguishment of debt and one-time costs for professional services associated with M&A and strategic initiatives. These non-GAAP measures have been reconciled to the nearest GAAP measure for historical periods in the tables below entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures." However, the Company is unable to reconcile its expectations regarding Adjusted EBITDA growth in 2021 to the most directly comparable GAAP measures without unreasonable efforts because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures.
Forward-Looking Statements
Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to the impacts of the COVID-19 pandemic on our business, financial results and financial condition and that of our customers, suppliers, and other counterparties; general economic and financial conditions domestically and internationally; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock and product prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events (such as the Texas freeze event), health epidemics and pandemics (including the COVID-19 pandemic) and terrorist attacks; our ability to consummate, and the costs associated with, extraordinary transactions, including acquisitions, dispositions and other strategic initiatives, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations (including having to return the amounts borrowed under the PPP Loans or failing to qualify for forgiveness of such loans, in whole or in part); difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including, but not limited to, "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein and in our other filings with the Securities and Exchange Commission (the "SEC"). Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic and other natural disasters such as severe weather events.
There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this report and the information included in our prior releases, reports and other filings with the SEC, the information contained in this report updates and supersedes such information.
Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: The Equity Group Inc.
Jeremy Hellman, CFA (212) 836-9626
jhellman@equityny.com
Adam Prior (212) 836-9606
aprior@equityny.com
TRECORA RESOURCES AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, (Unaudited) |
December 31, |
|||||||
ASSETS |
(thousands of dollars, except par value) |
|||||||
Current Assets |
||||||||
Cash |
$ |
44,403 |
$ |
55,664 |
||||
Trade receivables, net |
31,958 |
25,301 |
||||||
Inventories |
15,619 |
12,945 |
||||||
Prepaid expenses and other assets |
6,643 |
9,198 |
||||||
Taxes receivable |
945 |
2,788 |
||||||
Total current assets |
99,568 |
105,896 |
||||||
Property, plant and equipment, net |
187,567 |
187,104 |
||||||
Intangible assets, net |
11,512 |
12,893 |
||||||
Lease right-of-use assets, net |
8,746 |
10,528 |
||||||
Mineral properties in the United States |
412 |
412 |
||||||
TOTAL ASSETS |
$ |
307,805 |
$ |
316,833 |
||||
LIABILITIES |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ |
12,686 |
$ |
14,447 |
||||
Accrued liabilities |
11,044 |
6,857 |
||||||
Current portion of long-term debt |
4,194 |
4,194 |
||||||
Current portion of lease liabilities |
3,302 |
3,195 |
||||||
Current portion of CARES Act, PPP Loans |
3,935 |
— |
||||||
Current portion of other liabilities |
542 |
891 |
||||||
Total current liabilities |
35,703 |
29,584 |
||||||
CARES Act, PPP Loans, net of current portion |
— |
6,123 |
||||||
Long-term debt, net of current portion |
38,755 |
41,901 |
||||||
Post-retirement benefit, net of current portion |
312 |
320 |
||||||
Lease liabilities, net of current portion |
5,444 |
7,333 |
||||||
Other liabilities, net of current portion |
617 |
648 |
||||||
Deferred income taxes |
26,420 |
26,517 |
||||||
Total liabilities |
107,251 |
112,426 |
||||||
COMMITMENTS AND CONTINGENCIES (Note 12) |
||||||||
EQUITY |
||||||||
Common stock - authorized 40 million shares of $0.10 par value; issued |
2,497 |
2,483 |
||||||
Additional paid-in capital |
62,710 |
61,311 |
||||||
Treasury stock, at cost (0.6 million shares) |
(5,000) |
— |
||||||
Retained earnings |
140,058 |
140,324 |
||||||
Total Trecora Resources Stockholders' Equity |
200,265 |
204,118 |
||||||
Non-controlling Interest |
289 |
289 |
||||||
Total equity |
200,554 |
204,407 |
||||||
TOTAL LIABILITIES AND EQUITY |
$ |
307,805 |
$ |
316,833 |
TRECORA RESOURCES AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, |
NINE MONTHS ENDED SEPTEMBER 30, |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
(thousands of dollars, except per share amounts) |
|||||||||||||||
REVENUES |
|||||||||||||||
Product sales |
$ |
70,422 |
$ |
43,570 |
$ |
186,647 |
$ |
137,460 |
|||||||
Processing fees |
4,215 |
4,177 |
11,424 |
13,028 |
|||||||||||
74,637 |
47,747 |
198,071 |
150,488 |
||||||||||||
OPERATING COSTS AND EXPENSES |
|||||||||||||||
Cost of sales and processing |
65,663 |
39,290 |
175,731 |
127,786 |
|||||||||||
GROSS PROFIT |
8,974 |
8,457 |
22,340 |
22,702 |
|||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES |
|||||||||||||||
General and administrative |
8,923 |
5,766 |
23,928 |
18,729 |
|||||||||||
Depreciation |
218 |
209 |
670 |
637 |
|||||||||||
9,141 |
5,975 |
24,598 |
19,366 |
||||||||||||
OPERATING INCOME (LOSS) |
(167) |
2,482 |
(2,258) |
3,336 |
|||||||||||
OTHER INCOME (EXPENSE) |
|||||||||||||||
Interest expense |
(319) |
(508) |
(918) |
(2,159) |
|||||||||||
Gain on extinguishment of debt |
2,188 |
— |
2,188 |
— |
|||||||||||
Miscellaneous income, net |
(30) |
(13) |
213 |
(7) |
|||||||||||
1,839 |
(521) |
1,483 |
(2,166) |
||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
1,672 |
1,961 |
(775) |
1,170 |
|||||||||||
INCOME TAX (EXPENSE) BENEFIT |
211 |
(853) |
509 |
3,942 |
|||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS |
1,883 |
1,108 |
(266) |
5,112 |
|||||||||||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX |
— |
21,324 |
— |
26,179 |
|||||||||||
NET INCOME (LOSS) |
$ |
1,883 |
$ |
22,432 |
$ |
(266) |
$ |
31,291 |
|||||||
Basic Earnings (Loss) per Common Share |
|||||||||||||||
Net income (loss) from continuing operations (dollars) |
$ |
0.08 |
$ |
0.04 |
$ |
(0.01) |
$ |
0.21 |
|||||||
Net income from discontinued operations, net of tax (dollars) |
— |
0.86 |
— |
1.06 |
|||||||||||
Net income (loss) (dollars) |
$ |
0.08 |
$ |
0.90 |
$ |
(0.01) |
$ |
1.27 |
|||||||
Basic weighted average number of common shares outstanding |
24,341 |
24,817 |
24,562 |
24,795 |
|||||||||||
Diluted Earnings (Loss) per Common Share |
|||||||||||||||
Net income (loss) from continuing operations (dollars) |
$ |
0.08 |
$ |
0.04 |
$ |
(0.01) |
$ |
0.20 |
|||||||
Net income from discontinued operations, net of tax (dollars) |
— |
0.84 |
— |
1.04 |
|||||||||||
Net income (loss) (dollars) |
$ |
0.08 |
$ |
0.88 |
$ |
(0.01) |
$ |
1.24 |
|||||||
Diluted weighted average number of common shares outstanding |
24,952 |
25,394 |
24,562 |
25,179 |
TRECORA RESOURCES AND SUBSIDIARIES | |||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES | |||||||||||||
EBITDA from continuing operations and Adjusted EBITDA from continuing operations | |||||||||||||
(Thousands of dollars; rounding may apply) | |||||||||||||
THREE MONTHS ENDED |
THREE MONTHS ENDED |
||||||||||||
9/30/2021 |
9/30/2020 |
||||||||||||
SPEC. |
SPEC. |
CORP |
TREC |
SPEC. |
SPEC. |
CORP |
TREC |
||||||
NET INCOME (LOSS) |
$ 2,619 |
$ 2,670 |
$(3,406) |
$ 1,883 |
$ 4,161 |
$ (1,267) |
$19,538 |
$22,432 |
|||||
Income from discontinued operations, net of tax |
0 |
0 |
0 |
0 |
0 |
0 |
21,324 |
21,324 |
|||||
Income (loss) from continuing operations (1) |
$ 2,619 |
$ 2,670 |
$(3,406) |
$ 1,883 |
$ 4,161 |
$ (1,267) |
$(1,786) |
$ 1,108 |
|||||
Interest expense |
318 |
0 |
1 |
319 |
507 |
0 |
1 |
508 |
|||||
Income tax expense (benefit) |
1,444 |
0 |
(1,655) |
(211) |
1,150 |
(26) |
(271) |
853 |
|||||
Depreciation and amortization |
195 |
23 |
0 |
218 |
183 |
24 |
3 |
210 |
|||||
Depreciation and amortization in cost of sales |
2,649 |
1,530 |
0 |
4,179 |
2,484 |
1,403 |
0 |
3,887 |
|||||
EBITDA from continuing operations (1) |
7,225 |
4,223 |
(5,060) |
6,388 |
8,485 |
134 |
(2,053) |
6,566 |
|||||
Stock-based compensation |
0 |
0 |
572 |
572 |
0 |
0 |
489 |
489 |
|||||
Gain on extinguishment of debt(2) |
0 |
(2,188) |
0 |
(2,188) |
0 |
0 |
0 |
0 |
|||||
Gain on disposal of assets |
12 |
0 |
0 |
12 |
0 |
0 |
0 |
0 |
|||||
One-time costs for professional services |
0 |
0 |
2,751 |
2,751 |
0 |
0 |
35 |
35 |
|||||
Adjusted EBITDA from continuing operations (1) |
$ 7,237 |
$ 2,035 |
$(1,737) |
$ 7,535 |
$ 8,485 |
$ 134 |
$(1,529) |
$ 7,090 |
|||||
NINE MONTHS ENDED |
NINE MONTHS ENDED |
||||||||||||
9/30/2021 |
9/30/2020 |
||||||||||||
SPEC. |
SPEC. |
CORP |
TREC |
SPEC. |
SPEC. |
CORP |
TREC |
||||||
NET INCOME (LOSS) |
$ 8,110 |
$ 533 |
$(8,909) |
$ (266) |
$ 10,150 |
$ (385) |
$21,526 |
$31,291 |
|||||
Income from discontinued operations, net of tax |
0 |
0 |
0 |
0 |
0 |
0 |
26,179 |
26,179 |
|||||
Income (Loss) from continuing operations (1) |
$ 8,110 |
$ 533 |
$(8,909) |
$ (266) |
$ 10,150 |
$ (385) |
$(4,653) |
$ 5,112 |
|||||
Interest expense |
917 |
0 |
1 |
918 |
2,158 |
0 |
1 |
2,159 |
|||||
Income tax expense (benefit) |
2,364 |
0 |
(2,873) |
(509) |
(249) |
(1,595) |
(2,098) |
(3,942) |
|||||
Depreciation and amortization |
595 |
69 |
6 |
670 |
554 |
71 |
13 |
638 |
|||||
Depreciation and amortization in cost of sales |
7,838 |
4,478 |
0 |
12,316 |
7,351 |
4,022 |
0 |
11,373 |
|||||
EBITDA from continuing operations (1) |
19,824 |
5,080 |
(11,775) |
13,129 |
19,964 |
2,113 |
(6,737) |
15,340 |
|||||
Share based compensation |
0 |
0 |
1,695 |
1,695 |
0 |
0 |
1,422 |
1,422 |
|||||
Gain on extinguishment of debt(2) |
0 |
(2,188) |
0 |
(2,188) |
0 |
0 |
0 |
0 |
|||||
(Gain) Loss on disposal of assets |
(280) |
0 |
0 |
(280) |
(8) |
17 |
0 |
9 |
|||||
One-time costs for professional services |
0 |
0 |
3,998 |
3,998 |
0 |
0 |
35 |
35 |
|||||
Adjusted EBITDA from continuing operations (1) |
$ 19,544 |
$ 2,892 |
$(6,082) |
$16,354 |
$ 19,956 |
$ 2,130 |
$(5,280) |
$16,806 |
|||||
(1) Discontinued Operations only applicable within the Corporate segment |
|||||||||||||
(2) Extinguishment of debt is directly related to the forgiveness of the TC PPP Loan |
|||||||||||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-announces-third-quarter-2021-results-301415707.html
SOURCE Trecora Resources
SUGAR LAND, Texas, Oct. 25, 2021 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced the planned release of its third quarter 2021 financial results after market close on Wednesday, November 3, 2021. President and Chief Executive Officer, Patrick D. Quarles, and Chief Financial Officer, Sami Ahmad, will host a conference call on Thursday, November 4, 2021 at 9:00 a.m. Central Time/10:00 a.m. Eastern Time to discuss the results.
Date: |
Thursday, November 4, 2021 |
Time: |
10:00 a.m. Eastern Time |
Toll-free dial-in number: |
+1-866-417-5724 |
International dial-in number: |
+1-409-217-8234 |
Conference ID: |
6267010 |
Webcast: |
The conference call will be simulcast live and available for replay via the investor relations section of the Company's website at http://www.trecora.com/
The presentation slides will be available before the call begins under the investor relations section of the Company's website at https://ir.trecora.com/presentations
A replay of the conference call will be available approximately two hours following the conclusion of the call through November 5, 2021.
Toll-free replay number: |
+1 855-859-2056 |
International replay number: |
+1 404-537-3406 |
Replay PIN number: |
6267010 |
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: |
The Equity Group Inc. |
Jeremy Hellman, CFA |
(212) 836-9626 |
View original content:https://www.prnewswire.com/news-releases/trecora-resources-to-host-third-quarter-2021-earnings-conference-call-on-thursday-november-4th-301407716.html
SOURCE Trecora Resources
]]>SUGAR LAND, Texas, Aug. 4, 2021 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced financial results for the second quarter ended June 30, 2021.
Executive Commentary
"We delivered strong top and bottom line growth in the second quarter of 2021 as compared to the same period last year," stated Pat Quarles, Trecora's President and Chief Executive Officer. "The reopening of economies and an improving macroeconomic environment in the United States led to a significant improvement in demand across all of our end-markets, particularly for our prime products and waxes. This quarter demonstrates the strength of our business model as the economy continues to recover from the pandemic impacts and our industry recovers from the Texas freeze event in February. Product revenues for our Specialty Waxes segment were up 26.1% year-over-year, primarily reflecting increases in wax pricing. For our Specialty Petrochemicals segment, an 84.9% year-over-year increase in product revenues was driven by strong sales volumes as well as higher product prices. These factors led to second quarter net income from continuing operations of approximately $2.3 million and Adjusted EBITDA from continuing operations of $8.1 million, nearly doubling last year's second quarter Adjusted EBITDA."
"We continue to focus on maintaining a strong balance sheet and delivering on our organic growth programs while seeking additional external opportunites to grow. In every instance, we are commited to increasing our earnings and cashflow and creating long-term value for our stockholders. As part of that commitment, during the quarter we completed the repurchase of $5 million of shares of the $20 million authorization from our Board," concluded Mr. Quarles.
Sami Ahmad, Trecora's Chief Financial Officer stated, "Our enhanced operational efficiencies and strong competitive positioning, coupled with improving execution at Trecora Chemical, enabled us to capitalize on the economic upturn and generate improved profitability in the second quarter. Cash used in operations in the second quarter was $4.3 million as the growth in the business resulted in an increase in working capital of nearly $16 million. We are extremely confident in our liquidity position, with cash at the end of the quarter of $39.1 million, and an undrawn revolver. Total bank debt at the end of the quarter was $44.0 million. The strength of our balance sheet affords us a great amount of financial flexibility to manage our business and execute on our strategic plan," concluded Mr. Ahmad.
Second Quarter 2021 Financial Results
Net income in the second quarter of 2021 was $2.3 million, or $0.09 per diluted share[1], compared to net loss of $1.9 million, or $(0.07) per diluted share[2], in the second quarter of 2020. Adjusted EBITDA from continuing operations was $8.1 million for the second quarter of 2021, compared with Adjusted EBITDA from continuing operations of $4.2 million in the second quarter of 2020.
Total revenue in the second quarter of 2021 was $68.8 million, compared to $40.7 million in the second quarter of 2020. This 69.3% year-over-year increase was primarily due to higher sales volumes and selling prices as reopening trends and economic recovery continue, leading to greater demand in our end-markets.
Gross profit in the second quarter of 2021 was $11.0 million, or 16.0% of total revenues, compared to $6.2 million, or 15.2% of total revenues in the second quarter of 2020. Operating income in the second quarter of 2021 was $3.1 million, compared to operating loss of $0.3 million in the second quarter of 2020.
Specialty Petrochemicals
Specialty Petrochemicals net income was $5.3 million in the second quarter of 2021, compared to net income of $1.4 million in the second quarter of 2020, including the benefit of $1.4 million settlement with a utility provider for costs related to the Texas freeze event. Specialty Petrochemicals volume in the second quarter of 2021 was 20.0 million gallons, compared to 17.2 million gallons in the first quarter of 2021 and 15.3 million gallons in the second quarter of 2020. Sales revenues for our Specialty Petrochemicals products increased 84.9% year-over-year. This was primarily due to the economic recovery which resulted in greater demand for our products as well as higher product prices.
Prime product volume in the second quarter of 2021 was 16.9 million gallons, compared to 14.7 million gallons in the first quarter of 2021 and 13.1 million gallons in the second quarter of 2020. By-product sales volume was 3.1 million gallons in the second quarter of 2021. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the second quarter of 2021 was $9.7 million, compared to $5.0 million in the second quarter of 2020.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS |
||||
JUNE 30, |
|||||
2021 |
2020 |
% Change |
|||
Product sales |
$57,763 |
$31,236 |
85% |
||
Processing fees |
1,527 |
1,159 |
32% |
||
Gross revenues |
$59,290 |
$32,395 |
83% |
||
Operating profit before depreciation and amortization |
9,741 |
4,974 |
96% |
||
Operating profit |
6,955 |
2,354 |
196% |
||
Net profit before taxes |
6,709 |
1,648 |
307% |
||
Depreciation and amortization |
2,787 |
2,621 |
6% |
||
Adjusted EBITDA |
9,737 |
4,998 |
95% |
||
Capital expenditures |
3,692 |
5,382 |
(31%) |
||
Specialty Waxes
Specialty Waxes generated revenues of approximately $9.6 million in the second quarter of 2021, a $0.9 million increase from $8.7 million in the first quarter of 2021, and a $1.3 million increase from the second quarter of 2020. Revenues included approximately $6.9 million of wax product sales in the second quarter of 2021, 26.1% higher than the same quarter last year, due to higher selling prices; average selling prices for our specialty waxes increased by more than 20%. Wax sales volumes increased approximately 5.2% from the second quarter of 2020.
Adjusted EBITDA for Specialty Waxes in the second quarter of 2021 was $1.3 million, compared to $0.9 million in the second quarter of 2020. Specialty Waxes net loss was $0.2 million in the second quarter of 2021, compared to net loss of $0.3 million in the second quarter of 2020.
Processing fees, which were approximately $2.7 million in the second quarter of 2021, a decrease of 5.2%, or approximately $0.1 million, from the second quarter of 2020. The decline was due to customer supply chain disruptions combined with residual impacts from the Texas freeze event which caused the ramp up on new custom processing projects to take longer than expected.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS |
||||||
JUNE 30, |
|||||||
2021 |
2020 |
% Change |
|||||
Product sales |
$6,897 |
$5,471 |
26% |
||||
Processing fees |
2,662 |
2,808 |
(5%) |
||||
Gross revenues |
$9,559 |
$8,279 |
16% |
||||
Operating profit before depreciation and amortization |
1,321 |
854 |
55% |
||||
Operating loss |
(198) |
(485) |
59% |
||||
Net loss before taxes |
(184) |
(445) |
59% |
||||
Depreciation and amortization |
1,518 |
1,338 |
14% |
||||
Adjusted EBITDA |
1,336 |
892 |
50% |
||||
Capital expenditures |
191 |
285 |
(33%) |
||||
First Half 2021 Financial Results
Net loss from continuing operations in the first half of 2021 was $2.1 million, or $(0.09) per diluted share[3], compared to net income from continuing operations of $4.0 million, or $0.16 per diluted share[4], for the same period in 2020. The first half of 2021 included the negative impact of the Texas freeze event in February, estimated to be $3.5 million, while the first half of 2020 included an income tax benefit of $4.8 million. Adjusted EBITDA from continuing operations in the first half of 2021 was $7.6 million, compared to Adjusted EBITDA from continuing operations of $9.7 million for the same period in 2020.
Total revenue in the first half of 2021 was $123.4 million, compared to $102.7 million for the same period in 2020, an increase of 20.1%. This increase was primarily due to higher sales volumes and higher selling prices as a result of the economic recovery from COVID-19 and increased costs of natural gasoline.
Gross profit in the first half of 2021 was $13.4 million, or 10.8% of total revenues, compared to $14.2 million, or 13.9% of total revenues, for the same period in 2020. Operating loss in the first half of 2021 was $2.1 million, compared to operating income of $0.9 million for the same period in 2020.
Specialty Petrochemicals
Specialty Petrochemicals net income was $5.5 million in the first half of 2021, compared to net income of $6.0 million for the same period in 2020. Specialty Petrochemicals volume in the first half of 2021 was 37.2 million gallons, compared to 35.1 million gallons for the same period in 2020. Prime product volume in the first half of 2021 was 31.5 million gallons, compared to 29.3 million gallons in the same period 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the first half of 2021 increased 7.3% to $12.3 million, compared to $11.5 million for the same period in 2020.
Dollar amounts in thousands/rounding may apply |
SIX MONTHS ENDED |
|||
JUNE 30, |
||||
2021 |
2020 |
% Change |
||
Product sales |
$102,421 |
$81,622 |
26% |
|
Processing fees |
2,781 |
2,403 |
16% |
|
Gross revenues |
$105,202 |
$84,025 |
25% |
|
Operating profit before depreciation and amortization |
12,312 |
11,464 |
7% |
|
Operating profit |
6,724 |
6,226 |
8% |
|
Net profit before taxes |
6,412 |
4,590 |
40% |
|
Depreciation and amortization |
5,589 |
5,238 |
7% |
|
Adjusted EBITDA from continuing operations |
12,307 |
11,471 |
7% |
|
Capital expenditures |
7,259 |
6,983 |
4% |
Specialty Waxes
Specialty Waxes net loss of $2.1 million in the first half of 2021 compared to net income of $0.9 million for the same period in 2020. Specialty Waxes had revenues of $18.2 million in the first half of 2021, a 2.6% decrease from the same period of 2020. Revenues included $13.8 million of wax product sales and $4.4 million of processing revenues. Wax sales volumes in the first half of 2021 decreased approximately 4.9% from the same period in 2020. In the first half of 2021, the Texas freeze event impacted both wax production and the custom processing business. Adjusted EBITDA from continuing operations for Specialty Waxes in the first half of 2021 was $0.9 million, compared to $2.0 million for the same period in 2020.
Dollar amounts in thousands/rounding may apply |
SIX MONTHS |
|||
JUNE 30, |
||||
2021 |
2020 |
% Change |
||
Product sales |
$13,804 |
$12,268 |
13% |
|
Processing fees |
4,428 |
6,448 |
(31%) |
|
Gross revenues |
$18,232 |
$18,716 |
(3%) |
|
Operating profit before depreciation and amortization |
840 |
1,920 |
(56%) |
|
Operating loss |
(2,155) |
(747) |
(189%) |
|
Net loss before taxes |
(2,138) |
(687) |
(211%) |
|
Depreciation and amortization |
2,994 |
2,666 |
12% |
|
Adjusted EBITDA from continuing operations |
857 |
1,996 |
(57%) |
|
Capital expenditures |
1,405 |
601 |
134% |
Outlook
"In the second quarter we saw a very strong resurgence of demand due both to the continued recovery from the pandemic and the pent-up demand as a result of the Texas freeze event in February. The demand improvement allowed us to realize price increases across our entire product offering. Some of these benefits were muted by supply chain disruptions both with our suppliers and service providers. While some issues remain, we took positive steps to mitigate impacts to our customers by expanding our owned trucking fleet and extending our third party trucking network.
"Demand in the third quarter remains strong reflecting the general economy and likely some inventory building in the supply chain as our customers deal with their own supply chain issues. We also continue to advance our organic growth program with two new commercial trials expected in the quarter. Benefits from restructuring acitivies in our South Hampton product handling function will reduce our costs in the second half of the year. Continued increases in the price of natural gasoline are also impacting margins on our market-based prime products.
"The second quarter was one of major progress at Trecora and we continue to believe that with an improving economic environment, increasing levels of vaccinations, and activity levels increasing in our end-markets, we expect to drive sustainable profitability in the quarters to come. The improvements that we have made in our company make us very confident about our progress and outlook for the second half of 2021," concluded Mr. Quarles.
Earnings Call
Tomorrow's conference call, on August 5, 2021 at 10:00 am Eastern Time, will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com/ or at https://edge.media-server.com/mmc/p/zcza6anf. A replay of the call will also be available through the same link until October 5, 2021.
To participate via telephone, callers should dial in at least ten to fifteen minutes prior to the 10:00 am Eastern Time start; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 9462308. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 9462308 for the replay.
Use of Non-GAAP Measures
This earnings press release includes non-GAAP financial measures of EBITDA from continuing operations and Adjusted EBITDA from continuing operations and provide reconciliations from our most directly comparable GAAP financial measures to those measures.
We believe these financial measures provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We also believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.
We define EBITDA from continuing operations as net income (loss) from continuing operations plus interest expense, income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA from continuing operations as EBITDA from continuing operations plus share-based compensation and plus or minus gains or losses on disposal of assets.
Forward-Looking Statements
Some of the statements and information contained in this earnings press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to the impacts of the COVID-19 pandemic on our business, financial results and financial condition and that of our customers, suppliers, and other counterparties; general economic and financial conditions domestically and internationally; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock and product prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events (such as the Texas freeze event), health epidemics and pandemics (including the COVID-19 pandemic) and terrorist attacks; our ability to consummate extraordinary transactions, including acquisitions and dispositions, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations (including having to return the amounts borrowed under the PPP Loans or failing to qualify for forgiveness of such loans, in whole or in part); difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including, but not limited to, "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in our other filings with the Securities and Exchange Commission (the "SEC"). Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic and other natural disasters such as severe weather events.
There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this release and the information included in our prior releases, reports and other filings with the SEC, the information contained in this release updates and supersedes such information.
Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: The Equity Group Inc.
Fred Buonocore, CFA |
(212) 836-9607 |
Mike Gaudreau |
(212) 836-9620 |
TRECORA RESOURCES AND SUBSIDIARIES |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
June 30, 2021 |
December 31, |
|||
ASSETS |
(thousands of dollars, except par value) |
|||
Current Assets |
||||
Cash |
$ 39,125 |
$ 55,664 |
||
Trade receivables, net |
34,210 |
25,301 |
||
Inventories |
15,640 |
12,945 |
||
Prepaid expenses and other assets |
5,094 |
9,198 |
||
Taxes receivable |
286 |
2,788 |
||
Total current assets |
94,355 |
105,896 |
||
Plant, pipeline and equipment, net |
188,109 |
187,104 |
||
Intangible assets, net |
11,972 |
12,893 |
||
Lease right-of-use assets, net |
8,962 |
10,528 |
||
Mineral properties |
412 |
412 |
||
TOTAL ASSETS |
$ 303,810 |
$ 316,833 |
||
LIABILITIES |
||||
Current Liabilities |
||||
Accounts payable |
$ 11,488 |
$ 14,447 |
||
Accrued liabilities |
7,388 |
6,857 |
||
Current portion of long-term debt |
4,194 |
4,194 |
||
Current portion of lease liabilities |
3,244 |
3,195 |
||
Current portion of CARES Act, PPP Loans |
6,123 |
- |
||
Current portion of other liabilities |
569 |
891 |
||
Total current liabilities |
33,006 |
29,584 |
||
CARES Act, PPP Loans, net of current portion |
- |
6,123 |
||
Long-term debt, net of current portion |
39,804 |
41,901 |
||
Post-retirement benefit, net of current portion |
316 |
320 |
||
Lease liablities, net of current portion |
5,718 |
7,333 |
||
Other liabilities, net of current portion |
626 |
648 |
||
Deferred income taxes |
26,241 |
26,517 |
||
Total liabilities |
105,711 |
112,426 |
||
EQUITY |
||||
Common stock - authorized 40 million shares of $0.10 par value; issued |
2,497 |
2,483 |
||
Additional paid-in capital |
62,138 |
61,311 |
||
Treasury stock, at cost (0.6 million shares) |
(5,000) |
- |
||
Retained earnings |
138,175 |
140,324 |
||
Total Trecora Resources Stockholders' Equity |
197,810 |
204,118 |
||
Noncontrolling Interest |
289 |
289 |
||
Total equity |
198,099 |
204,407 |
||
TOTAL LIABILITIES AND EQUITY |
$ 303,810 |
$ 316,833 |
TRECORA RESOURCES AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||
THREE MONTHS ENDED |
SIX MONTHS ENDED |
|||||||
JUNE 30, |
JUNE 30, |
|||||||
(unaudited) |
(unaudited) |
|||||||
2021 |
2020 |
2021 |
2020 |
|||||
(thousands of dollars, except per share amounts) |
||||||||
Revenues |
||||||||
Product sales |
$ 64,660 |
$ 36,707 |
$ 116,225 |
$ 93,890 |
||||
Processing fees |
4,189 |
3,967 |
7,209 |
8,851 |
||||
68,849 |
40,674 |
123,434 |
102,741 |
|||||
Operating costs and expenses |
||||||||
Cost of sales and processing (including depreciation and |
57,828 |
34,507 |
110,068 |
88,496 |
||||
Gross Profit |
11,021 |
6,167 |
13,366 |
14,245 |
||||
General and Administrative Expenses |
||||||||
General and administrative |
7,673 |
6,289 |
15,005 |
12,963 |
||||
Depreciation |
226 |
212 |
452 |
428 |
||||
7,899 |
6,501 |
15,457 |
13,391 |
|||||
Operating income (loss) |
3,122 |
(334) |
(2,091) |
854 |
||||
Other income (expense) |
||||||||
Interest expense |
(297) |
(735) |
(599) |
(1,651) |
||||
Miscellaneous income, net |
133 |
68 |
243 |
6 |
||||
(164) |
(667) |
(356) |
(1,645) |
|||||
Income (loss) from continuing operations before income taxes |
2,958 |
(1,001) |
(2,447) |
(791) |
||||
Income tax (expense) benefit |
(703) |
(858) |
298 |
4,795 |
||||
Income (loss) from continuing operations |
2,255 |
(1,859) |
(2,149) |
4,004 |
||||
Income (loss) from discontinued operations, net of tax |
- |
(2) |
- |
4,855 |
||||
Net income (loss) |
$ 2,255 |
$ (1,861) |
$ (2,149) |
$ 8,859 |
||||
Basic earnings (loss) per common share |
||||||||
Net income (loss) from continuing operations (dollars) |
$ 0.09 |
$ (0.07) |
$ (0.09) |
$ 0.16 |
||||
Net income from discontinued operations, net of tax (dollars) |
- |
- |
- |
0.20 |
||||
Net income (loss) (dollars) |
$ 0.09 |
$ (0.07) |
$ (0.09) |
$ 0.36 |
||||
Basic weighted average number of common shares |
24,485 |
24,802 |
24,673 |
24,784 |
||||
Diluted earnings (loss) per common share |
||||||||
Net income (loss) from continuing operations (dollars) |
$ 0.09 |
$ (0.07) |
$ (0.09) |
$ 0.16 |
||||
Net income from discontinued operations, net of tax (dollars) |
- |
- |
- |
0.19 |
||||
Net income (loss) (dollars) |
$ 0.09 |
$ (0.07) |
$ (0.09) |
$ 0.35 |
||||
Diluted weighted average number of common shares |
25,097 |
24,802 |
24,673 |
25,327 |
TRECORA RESOURCES AND SUBSIDIARIES
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
EBITDA from continuing operations and Adjusted EBITDA from continuing operations
(thousands of dollars; rounding may apply)
THREE MONTHS ENDED |
THREE MONTHS ENDED |
||||||||||||||
6/30/2021 |
6/30/2020 |
||||||||||||||
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
||||||||
NET INCOME (LOSS) |
$ 5,286 |
$ (183) |
$ (2,848) |
$ 2,255 |
$ 1,393 |
$ (332) |
$(2,922) |
$(1,861) |
|||||||
Income from discontinued operations, net of |
- |
- |
- |
- |
- |
- |
(2) |
(2) |
|||||||
Income (Loss) from continuing operations * |
$ 5,286 |
$ (183) |
$ (2,848) |
$ 2,255 |
$ 1,393 |
$ (332) |
$(2,920) |
$(1,859) |
|||||||
Interest expense |
297 |
- |
- |
297 |
736 |
- |
(1) |
735 |
|||||||
Income tax expense (benefit) |
1,406 |
- |
(703) |
703 |
255 |
(113) |
716 |
858 |
|||||||
Depreciation and amortization |
200 |
23 |
3 |
226 |
185 |
23 |
4 |
212 |
|||||||
Depreciation and amortization in cost of |
2,586 |
1,496 |
- |
4,082 |
2,436 |
1,314 |
- |
3,750 |
|||||||
EBITDA from continuing operations * |
9,775 |
1,336 |
(3,548) |
7,563 |
5,005 |
892 |
(2,201) |
3,696 |
|||||||
Stock-based compensation |
- |
- |
552 |
552 |
- |
- |
543 |
543 |
|||||||
Gain on disposal of assets |
(38) |
- |
- |
(38) |
(7) |
- |
- |
(7) |
|||||||
Adjusted EBITDA from continuing |
$ 9,737 |
$ 1,336 |
$ (2,996) |
$ 8,077 |
$ 4,998 |
$ 892 |
$(1,658) |
$ 4,232 |
|||||||
SIX MONTHS ENDED |
SIX MONTHS ENDED |
||||||||||||||
6/30/2021 |
6/30/2020 |
||||||||||||||
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
||||||||
NET INCOME (LOSS) |
$ 5,491 |
$ (2,137) |
$ (5,503) |
$(2,149) |
$ 5,989 |
$ 882 |
$ 1,988 |
$ 8,859 |
|||||||
Income from discontinued operations, net of |
- |
- |
- |
- |
- |
- |
4,855 |
4,855 |
|||||||
Income (Loss) from continuing operations * |
$ 5,491 |
$ (2,137) |
$ (5,503) |
$(2,149) |
$ 5,989 |
$ 882 |
$(2,867) |
$ 4,004 |
|||||||
Interest expense |
599 |
- |
- |
599 |
1,651 |
- |
- |
1,651 |
|||||||
Income tax expense (benefit) |
920 |
- |
(1,218) |
(298) |
(1,399) |
(1,569) |
(1,827) |
(4,795) |
|||||||
Depreciation and amortization |
400 |
46 |
6 |
452 |
371 |
47 |
10 |
428 |
|||||||
Depreciation and amortization in cost of |
5,189 |
2,948 |
- |
8,137 |
4,867 |
2,619 |
- |
7,486 |
|||||||
EBITDA from continuing operations * |
12,599 |
857 |
(6,715) |
6,741 |
11,479 |
1,979 |
(4,684) |
8,774 |
|||||||
Share based compensation |
- |
- |
1,123 |
1,123 |
- |
- |
933 |
933 |
|||||||
(Gain) Loss on disposal of assets |
(292) |
- |
- |
(292) |
(8) |
17 |
- |
9 |
|||||||
Adjusted EBITDA from continuing |
$ 12,307 |
$ 857 |
$ (5,592) |
$ 7,572 |
$ 11,471 |
$ 1,996 |
$(3,751) |
$ 9,716 |
|||||||
* Discontinued Operations only applicable within the Corporate segment |
__________
1 Based on 25.1 million shares outstanding.
2 Based on 24.8 million shares outstanding.
3 Based on 24.7 million shares outstanding.
4 Based on 25.3 million shares outstanding.
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-announces-second-quarter-2021-results-301348660.html
SOURCE Trecora Resources
SUGAR LAND, Texas, July 19, 2021 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced the planned release of its second quarter 2021 financial results after market close on Wednesday, August 4, 2021, 2021. President and Chief Executive Officer, Patrick D. Quarles, and Chief Financial Officer, Sami Ahmad, will host a conference call on Thursday, August 5, 2021 at 9:00 a.m. Central Time/10:00 a.m. Eastern Time to discuss the results.
Date: |
Thursday, August 5, 2021 |
Time: |
10:00 a.m. Eastern Time |
Toll-free dial-in number: |
+1-866-417-5724 |
International dial-in number: |
+1-409-217-8234 |
Conference ID: |
9462308 |
Webcast: |
The conference call will be simulcast live and available for replay via the investor relations section of the Company's website at http://www.trecora.com/
The presentation slides will be available before the call begins under the investor relations section of the Company's website at https://ir.trecora.com/presentations
A replay of the conference call will be available approximately two hours following the conclusion of the call through October 5, 2021.
Toll-free replay number: |
+1 855-859-2056 |
International replay number: |
+1 404-537-3406 |
Replay PIN number: |
9462308 |
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact: The Equity Group Inc.
Fred Buonocore, CFA (212) 836-9607
fbuonocore@equityny.com
Mike Gaudreau (212) 836-9620
mg@equityny.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/trecora-resources-to-host-second-quarter-2021-earnings-conference-call-on-thursday-august-5th-301336683.html
SOURCE Trecora Resources
]]>SUGAR LAND, Texas, May 17, 2021 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced its upcoming conference schedule:
Investors interested in scheduling a meeting should contact their G. research representative.
Investors interested in scheduling a meeting should contact their Sidoti representative.
There will be a live webcast for the Sidoti Virtual Microcap Conference with replays available for 90 days. The slides that accompany the webcast will be available on the Company's website: www.trecora.com. To listen to the webcast, please click on the link below:
Sidoti Virtual Microcap Conference
https://sidoti.zoom.us/webinar/register/WN_E5560pfjRPyKt5d8c1_nNA
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact:
Jason Finkelstein
The Piacente Group, Inc.
212-481-2050
trecora@tpg-ir.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/trecora-resources-announces-upcoming-financial-conference-schedule-301292443.html
SOURCE Trecora Resources
]]>SUGAR LAND, Texas, May 4, 2021 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced financial results for the first quarter ended March 31, 2021.
Executive Commentary
"Over the last year, we have been focused on strengthening our balance sheet and managing through the uncertainties and disruptions created by the COVID-19 pandemic, ensuring that Trecora emerged in a position of strength. In addition, prudent capital allocation has been at the forefront of our agenda, including returning value to our stockholders," said Pat Quarles, Trecora's President and Chief Executive Officer.
"We entered the first quarter well-positioned to both benefit from the recovery and leverage our evolving growth portfolio. However, the February freeze event in Texas resulted in significant disruptions to our customers and supply chain, as well as damage to our plants, thus impacting our first quarter results.
"Following the freeze event, the Board authorized a $20 million share repurchase program in March which reflects the resilience of our business, our strong balance sheet and ample liquidity. We also advanced our growth program by converting recent successful plant trials into new custom processing commitments. We remain committed to our goal of creating long-term value for our stockholders through growth and prudent capital allocation," concluded Mr. Quarles.
Sami Ahmad, Trecora's Chief Financial Officer stated, "The Texas freeze event resulted in significant loss of sales as well as higher utility, repair and maintenance costs at both facilities. Net loss from continuing operations was $4.4 million in the first quarter of 2021. We estimate the total impact to first quarter Adjusted EBITDA from continuing operations was between $4.5 to $5.0 million, including higher costs of approximately $1.9 million. While the impact of the Texas freeze event was largely confined to the first quarter, certain customer and suppliers continued to experience residual effects into the second quarter. Finally, our liquidity remains excellent with cash at the end of the quarter of $53.0 million and an undrawn revolver. We believe we have financial flexibility for growth and are firmly positioned to manage market-related business disruptions," concluded Mr. Ahmad.
First Quarter 2021 Financial Results
Net loss in the first quarter of 2021 was $4.4 million, or $(0.18) per diluted share1, compared to net income of $10.7 million, or $0.42 per diluted share2, in the first quarter of 2020. Net loss from continuing operations in the first quarter of 2021 was $4.4 million, or $(0.18) per diluted share3, compared to net income from continuing operations of $5.9 million, or $0.23 per diluted share4, in the first quarter of 2020. Adjusted EBITDA from continuing operations was $(0.5) million for the first quarter of 2021, compared with Adjusted EBITDA from continuing operations of $5.5 million in the first quarter of 2020.
Total revenue in the first quarter of 2021 was $54.6 million, compared to $62.1 million in the first quarter of 2020. This 12.1% year-over-year decline was primarily due to lower sales volumes for prime products and by-products which were impacted by the Texas freeze event in February 2021 which resulted in widespread utilities failures and rolling blackouts across the state and region as well as the continued impact of the COVID-19 pandemic. This caused significant disruptions for our suppliers, customers and at our own facilities.
Gross profit in the first quarter of 2021 was $2.3 million, or 4.3% of total revenues, compared to $8.1 million, or 13.0% of total revenues in the first quarter of 2020. Operating loss in the first quarter of 2021 was $5.2 million, compared to operating income of $1.2 million for the first quarter of 2020.
Specialty Petrochemicals
Specialty Petrochemicals net income was $0.2 million in the first quarter of 2021, compared to net income of $4.6 million in the first quarter of 2020. Specialty Petrochemicals volume in the first quarter of 2021 was 17.2 million gallons, compared to 22.1 million gallons in the fourth quarter of 2020 and 19.7 million gallons in the first quarter of 2020. Sales revenues for our Specialty Petrochemicals products decreased 11.4% year-over-year, primarily due to the Texas freeze event. This caused significant disruptions for our suppliers, customers and at our own facilities. In addition, sales were also generally weaker compared to the same period last year due to the continued impact of the COVID-19 pandemic and weaker oil sands demand.
Prime product volume in the first quarter of 2021 was 14.7 million gallons, compared to 17.6 million gallons in the fourth quarter of 2020 and 16.2 million gallons in the first quarter of 2020. By-product sales volume was 2.5 million gallons in the first quarter of 2021. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the first quarter of 2021 was $2.6 million, compared to $6.5 million in the first quarter of 2020.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS ENDED |
||
MARCH 31, |
|||
2021 |
2020 |
% Change |
|
Product sales |
$44,658 |
$50,386 |
(11.4%) |
Processing fees |
1,254 |
1,244 |
0.8% |
Gross revenues |
$45,912 |
$51,630 |
(11.1%) |
Operating profit before depreciation and amortization |
2,571 |
6,490 |
(60.4%) |
Operating profit (loss) |
(231) |
3,872 |
(106.0%) |
Net profit (loss) before taxes |
(297) |
2,942 |
(110.1%) |
Depreciation and amortization |
2,802 |
2,617 |
7.1% |
Adjusted EBITDA |
2,569 |
6,473 |
(60.3%) |
Capital expenditures |
3,567 |
1,601 |
122.8% |
Specialty Waxes
Specialty Waxes net loss was $2.0 million in the first quarter of 2021, compared to net income of $1.2 million in the first quarter of 2020. Specialty Waxes generated revenues of approximately $8.7 million in the first quarter of 2021, a $0.3 million decrease from $9.0 million in the fourth quarter of 2020, and a $1.8 million decrease from the first quarter of 2020. Revenue included approximately $6.9 million of wax product sales in the first quarter of 2021, 1.6% higher than the same quarter last year, due to higher selling prices. Wax sales volumes decreased approximately 13.2%, or over 1.3 million pounds, from the first quarter of 2020. Despite utilizing existing inventories, wax sales volumes were depressed due to extended disruptions to feed supply and production limitations at our Pasadena facility resulting from the Texas freeze event.
Processing fees, which were approximately $1.8 million in the first quarter of 2021, a decrease of 51.5%, or approximately $1.9 million, from the first quarter of 2020, driven by lower demand resulting from the Texas freeze event in February 2021 and the resulting impacts on our customers. Adjusted EBITDA for Specialty Waxes in the first quarter of 2021 was $(0.5) million, compared to $1.1 million in the first quarter of 2020.
Dollar amounts in thousands/rounding may apply |
THREE MONTHS |
||
MARCH 31, |
|||
2021 |
2020 |
% Change |
|
Product sales |
$6,907 |
$6,797 |
1.6% |
Processing fees |
1,766 |
3,640 |
(51.5%) |
Gross revenues |
$8,673 |
$10,437 |
(16.9%) |
Operating profit (loss) before depreciation and amortization |
(481) |
1,066 |
(145.1%) |
Operating loss |
(1,957) |
(262) |
(646.9%) |
Net loss before taxes |
(1,954) |
(242) |
(707.4%) |
Depreciation and amortization |
1,476 |
1,328 |
11.1% |
Adjusted EBITDA |
(479) |
1,104 |
(143.4%) |
Capital expenditures |
1,214 |
316 |
284.2% |
Outlook
"In the second quarter we are seeing several positive developments. The strength of the US economy is driving solid demand across all of our key end-uses. It is also supporting price increase initiatives in the market. We successfully increased solvent and wax pricing recently and are seeing the aromatics market improve significantly, which benefits our by-product prices. We are also seeing a step-up in our custom processing activities due to both demand from our pre-existing customers as well as new business from our growth program. Some headwinds remain in the quarter as several of our solvents customers continue to have production constraints due to the Texas freeze event and supply chain disruptions from the strengthening US economy generally are a challenge," stated Mr. Quarles.
Earnings Call
Tomorrow's conference call, on May 5, 2021 at 10:00 am Eastern Time, will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com/ or at https://edge.media-server.com/mmc/p/i4wzozbc. A replay of the call will also be available through the same link.
To participate via telephone, callers should dial in at least ten to fifteen minutes prior to the 10:00 am Eastern Time start; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 5146023. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 5146023 for the replay.
Use of Non-GAAP Measures
This earnings press release includes non-GAAP financial measures of EBITDA from continuing operations and Adjusted EBITDA from continuing operations and also provides reconciliations from our most directly comparable GAAP financial measures to those measures.
We believe these financial measures provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We also believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.
We define EBITDA from continuing operations as net income (loss) from continuing operations plus interest expense, income tax expense (benefit), depreciation and amortization. We define Adjusted EBITDA from continuing operations as EBITDA from continuing operations plus share-based compensation, plus restructuring and severance expenses, plus impairment losses and plus or minus gains or losses on disposal of assets.
Forward-Looking Statements
Some of the statements and information contained in this earnings press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to the impacts of the COVID-19 pandemic on our business, financial results and financial condition and that of our customers, suppliers, and other counterparties; general economic and financial conditions domestically and internationally; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock and product prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events (including the Texas freeze event), health epidemics and pandemics (including the COVID-19 pandemic) and terrorist attacks; our ability to consummate extraordinary transactions, including acquisitions and dispositions, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations (including having to return the amounts borrowed under the Paycheck Protection Program or failing to qualify for forgiveness of such loans, in whole or in part); difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including but not limited to, "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in our other filings with the SEC. Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic and other natural disasters such as severe weather events (including the Texas freeze event).
There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this earnings release and the information included in our prior releases, reports and other filings with the SEC, the information contained in this earnings release updates and supersedes such information.
Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact:
Jason Finkelstein
The Piacente Group, Inc.
212-481-2050
trecora@tpg-ir.com
TRECORA RESOURCES AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
March 31, |
December 31, |
|||
ASSETS |
(thousands of dollars, except par value) |
|||
Current Assets |
||||
Cash |
$ 53,026 |
$ 55,664 |
||
Trade receivables, net |
25,929 |
25,301 |
||
Inventories |
11,739 |
12,945 |
||
Prepaid expenses and other assets |
6,392 |
9,198 |
||
Taxes receivable |
2,788 |
2,788 |
||
Total current assets |
99,874 |
105,896 |
||
Plant, pipeline and equipment, net |
187,923 |
187,104 |
||
Intangible assets, net |
12,433 |
12,893 |
||
Lease right-of-use assets, net |
9,757 |
10,528 |
||
Mineral properties |
412 |
412 |
||
TOTAL ASSETS |
310,399 |
316,833 |
||
LIABILITIES |
||||
Current Liabilities |
||||
Accounts payable |
16,584 |
14,447 |
||
Accrued liabilities |
6,002 |
6,857 |
||
Current portion of long-term debt |
4,194 |
4,194 |
||
Current portion of lease liabilities |
3,219 |
3,195 |
||
Current portion of other liabilities |
639 |
891 |
||
Total current liabilities |
30,638 |
29,584 |
||
CARES Act, PPP Loans |
6,123 |
6,123 |
||
Long-term debt, net of current portion |
40,852 |
41,901 |
||
Post-retirement benefit, net of current portion |
319 |
320 |
||
Lease liablities, net of current portion |
6,538 |
7,333 |
||
Other liabilities, net of current portion |
637 |
648 |
||
Deferred income taxes |
25,593 |
26,517 |
||
Total liabilities |
110,700 |
112,426 |
||
EQUITY |
||||
Common stock - authorized 40 million shares of $0.10 par value; |
2,490 |
2,483 |
||
Additional paid-in capital |
61,692 |
61,311 |
||
Treasury stock, at cost (0.1 million shares) |
(692) |
- |
||
Retained earnings |
135,920 |
140,324 |
||
Total Trecora Resources Stockholders' Equity |
199,410 |
204,118 |
||
Noncontrolling Interest |
289 |
289 |
||
Total equity |
199,699 |
204,407 |
||
TOTAL LIABILITIES AND EQUITY |
310,399 |
316,833 |
TRECORA RESOURCES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME | ||||
THREE MONTHS ENDED |
||||
(unaudited) |
||||
2021 |
2020 |
|||
(thousands of dollars, except per share amounts) |
||||
Revenues |
||||
Product sales |
$ 51,565 |
$ 57,183 |
||
Processing fees |
3,020 |
4,884 |
||
54,585 |
62,067 |
|||
Operating costs and expenses |
||||
Cost of sales and processing (including depreciation and |
52,240 |
53,989 |
||
Gross Profit |
2,345 |
8,078 |
||
General and Administrative Expenses |
||||
General and administrative |
7,332 |
6,674 |
||
Depreciation |
226 |
216 |
||
7,558 |
6,890 |
|||
Operating income (loss) |
(5,213) |
1,188 |
||
Other income (expense) |
||||
Interest expense |
(302) |
(916) |
||
Miscellaneous income (expense), net |
110 |
(62) |
||
(192) |
(978) |
|||
Income (loss) from continuing operations before income taxes |
(5,405) |
210 |
||
Income tax benefit |
1,001 |
5,653 |
||
Income (loss) from continuing operations |
(4,404) |
5,863 |
||
Income from discontinued operations, net of tax |
- |
4,857 |
||
Net income (loss) |
(4,404) |
10,720 |
||
Basic earnings (loss) per common share |
||||
Net income (loss) from continuing operations (dollars) |
$ (0.18) |
$ 0.24 |
||
Net income from discontinued operations, net of tax (dollars) |
$ - |
$ 0.20 |
||
Net income (loss) (dollars) |
$ (0.18) |
$ 0.43 |
||
Basic weighted average number of common shares outstanding |
24,861 |
24,765 |
||
Diluted earnings (loss) per common share |
||||
Net income (loss) from continuing operations (dollars) |
$ (0.18) |
$ 0.23 |
||
Net income from discontinued operations, net of tax (dollars) |
$ - |
$ 0.19 |
||
Net income (loss) (dollars) |
$ (0.18) |
$ 0.42 |
||
Diluted weighted average number of common shares outstanding |
24,861 |
25,276 |
TRECORA RESOURCES AND SUBSIDIARIES | |||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES | |||||||||
EBITDA from continuing operations and Adjusted EBITDA from continuing operations | |||||||||
(thousands of dollars; rounding may apply) | |||||||||
THREE MONTHS ENDED |
THREE MONTHS ENDED |
||||||||
3/31/2021 |
3/31/2020 |
||||||||
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
SPEC. PETRO |
SPEC. WAX |
CORP |
TREC |
||
NET INCOME (LOSS) |
$ 205 |
$ (1,954) |
$ (2,655) |
$ (4,404) |
$ 4,596 |
$ 1,214 |
$ 4,910 |
$ 10,720 |
|
Income from discontinued operations, net of tax |
- |
- |
- |
- |
- |
- |
4,857 |
4,857 |
|
Income (Loss) from continuing operations * |
$ 205 |
$ (1,954) |
$ (2,655) |
$ (4,404) |
$ 4,596 |
$ 1,214 |
$ 53 |
$ 5,863 |
|
Interest expense |
302 |
- |
- |
302 |
915 |
- |
1 |
916 |
|
Income tax benefit |
(486) |
- |
(515) |
(1,001) |
(1,654) |
(1,456) |
(2,543) |
(5,653) |
|
Depreciation and amortization |
200 |
23 |
3 |
226 |
186 |
24 |
6 |
216 |
|
Depreciation and amortization in cost of sales |
2,602 |
1,452 |
- |
4,054 |
2,431 |
1,305 |
- |
3,736 |
|
EBITDA from continuing operations * |
2,823 |
(479) |
(3,167) |
(823) |
6,474 |
1,087 |
(2,483) |
5,078 |
|
Share based compensation |
- |
- |
571 |
571 |
- |
- |
390 |
390 |
|
(Gain) loss on disposal of assets |
(254) |
- |
- |
(254) |
(1) |
17 |
- |
16 |
|
Adjusted EBITDA from continuing operations * |
$ 2,569 |
$ (479) |
$ (2,596) |
$ (506) |
$ 6,473 |
$ 1,104 |
$ (2,093) |
$ 5,484 |
|
* Discontinued Operations only applicable within the Corporate segment |
______________________________
1 Based on 24.9 million shares outstanding
2 Based on 25.3 million shares outstanding
3 Based on 24.9 million shares outstanding
4 Based on 25.3 million shares outstanding
View original content to download multimedia:http://www.prnewswire.com/news-releases/trecora-resources-announces-first-quarter-2021-results-301283714.html
SOURCE Trecora Resources
SUGAR LAND, Texas, April 27, 2021 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced the planned release of its first quarter 2021 financial results after market close on Tuesday, May 4, 2021. President and Chief Executive Officer, Patrick D. Quarles, and Chief Financial Officer, Sami Ahmad, will host a conference call on Wednesday, May 5, 2021 at 9:00 a.m. Central Time/10:00 a.m. Eastern Time to discuss the results.
Date: |
Wednesday, May 5, 2021 |
Time: |
10:00 a.m. Eastern |
Toll-free dial-in number: |
+1-866-417-5724 |
International dial-in number: |
+1-409-217-8234 |
Conference ID: |
5146023 |
Webcast: |
The conference call will be simulcast live and available for replay via the investor relations section of the Company's website at http://www.trecora.com/
The presentation slides will be available before the call begins under the investor relations section of the Company's website at https://ir.trecora.com/presentations
A replay of the conference call will be available approximately two hours following the conclusion of the call through May 8, 2021.
Toll-free replay number: |
+1 855-859-2056 |
International replay number: |
+1 404-537-3406 |
Replay PIN number: |
5146023 |
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact:
Jason Finkelstein
The Piacente Group, Inc.
212-481-2050
trecora@tpg-ir.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/trecora-resources-to-host-first-quarter-2021-earnings-conference-call-on-wednesday-may-5-301277711.html
SOURCE Trecora Resources
]]>SUGAR LAND, Texas, April 21, 2021 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced the appointment of Mr. Rafael (Ralph) Pons, currently the site leader at Trecora's South Hampton Resources facility in Silsbee, Texas, to the position of Chief Manufacturing Officer, effective May 15, 2021. The appointment will follow the retirement of John R. "Dick" Townsend, Trecora's Executive Vice President and Chief Manufacturing Officer, effective May 14, 2021.
In succeeding Mr. Townsend, Mr. Pons brings over 35 years of extensive chemical manufacturing experience at some of the industry's leading companies, providing effective and decisive leadership in facilities management, construction management, facility support, project/program management, contract administration, operations and maintenance, and facilities planning.
He holds a Master of Science degree in Operations Management from the Rensselaer Polytechnic Institute and a Bachelor of Science degree in Chemical Engineering from the University of Virginia.
"I am delighted to have Ralph Pons join our executive team as Chief Manufacturing Officer," said Pat Quarles, Trecora's President and Chief Executive Officer. "Ralph joined the company a year ago to lead our South Hampton facility as part of our succession planning process. During the past year, it became abundantly clear to me and the Board that Ralph was the ideal candidate to succeed Dick. Ralph has been instrumental in driving strategic and structural change amidst significant market disruption. His proven leadership and track record of success in manufacturing, specifically in increasing reliability and reducing maintenance costs, will be invaluable to achieving the Company's overall goals.
"I thank Dick for the significant contributions he has made to the Company. With his involvement as a Director on the Company's Board beginning in 2011 and his subsequent move to the role of Chief Manufacturing Officer, Trecora has undergone a historic transformation, as he helped implement significant beneficial change in our manufacturing work processes. Today our manufacturing is safer, stronger, more agile and more innovative than ever before, and that is due in large part to Dick and his team," concluded Mr. Quarles.
As part of the overall transition of the Company's manufacturing leadership, Mr. Dan Roberts assumed the role as site leader at Trecora's South Hampton Resources facility on April 19, 2021, succeeding Ralph Pons so that Mr. Pons may focus on transitioning into his new role. Mr. Roberts previously worked at Dow Chemical, Rohm and Haas, CDI Engineering, ENI, and Metton America, serving in a variety of roles.
He holds a Bachelor of Science degree in Chemical Engineering from The University of Texas at Austin and a Master of Business degree from the University of Houston.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact:
Jason Finkelstein
The Piacente Group, Inc.
212-481-2050
trecora@tpg-ir.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/trecora-announces-rafael-ralph-pons-as-new-chief-manufacturing-officer-301273686.html
SOURCE Trecora Resources
SUGAR LAND, Texas, April 16, 2021 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today provided an update on the financial impact for first quarter 2021, reflecting the effects from the unprecedented winter freeze in Texas and the Gulf Coast region.
During February 2021, a prolonged duration of sub-freezing temperatures and snow resulted in widespread utilities failures and rolling blackouts across the state and region. This caused significant disruptions for Trecora's suppliers, customers and its own facilities.
In advance of the anticipated weather, the Company's manufacturing facilities were brought down proactively in order to prepare them for the cold. As a result of the winter freeze, the South Hampton facility ("SHR") was out of operation for one week, while Trecora Chemical ("TC") operations were down roughly two weeks. The Company's SHR facility resumed operations on February 23rd, and the TC facility began resuming operations on March 4th.
The winter freeze ultimately resulted in higher utility, repair and maintenance costs, as well as loss of sales at both facilities. In light of these factors, the Company expects a preliminary negative impact to its first quarter net income from continuing operations, tax-effected at 21%, of between approximately $3.5 million to $4.5 million. While the Company currently expects the effects of the freeze to be a one-time event, it should be noted that certain customers continue to experience curtailment.
The Company has not completed its financial closing procedures for the first quarter of 2021, and actual results could vary from these preliminary estimates.
Forward-Looking Statements
Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or the Company's achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to the impacts of the COVID-19 pandemic on the Company's business, financial results and financial condition and that of the Company's customers, suppliers, and other counterparties; general economic and financial conditions domestically and internationally; insufficient cash flows from operating activities; the Company's ability to attract and retain key employees; feedstock, product and mineral prices; feedstock availability and the Company's ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events, health epidemics and pandemics (including the COVID-19 pandemic) and terrorist attacks; the Company's ability to consummate extraordinary transactions, including acquisitions and dispositions, and realize the financial and strategic goals of such transactions; technological developments and the Company's ability to maintain, expand and upgrade the Company's facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations (including having to return the amounts borrowed under the Paycheck Protection Program or failing to qualify for forgiveness of such loans, in whole or in part); difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in the Company's latest Annual Report on Form 10-K, including but not limited to, "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in the Company's other filings with the Securities and Exchange Commission (the "SEC"). Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic and other natural disasters such as severe weather events.
There may be other factors of which the Company is currently unaware or deem immaterial that may cause its actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this press release and the information included in the Company's prior releases, reports and other filings with the SEC, the information contained in this press release updates and supersedes such information.
Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events.
About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities.
Investor Relations Contact:
Jason Finkelstein
The Piacente Group, Inc.
212-481-2050
trecora@tpg-ir.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/trecora-resources-provides-update-on-first-quarter-2021-financial-impact-from-gulf-coast-winter-freeze-event-301270581.html
SOURCE Trecora Resources
]]>