Press Releases

Trecora Resources Releases Third Quarter 2014 Results

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- Revenue up 26.4% to $76.9 million

- Volume increased 27.4% to 21.6 million gallons

- Earnings Call to be Held Today at 4:30 pm EDT

SUGAR LAND, Texas, Oct. 30, 2014 /PRNewswire/ -- Trecora Resources (NYSE: TREC), a leading provider of high purity, specialty chemicals and waxes and a minority owner of Al Masane Al Kobra Mining Co. ("AMAK"), released their financial results for the third quarter ended September 30, 2014.

"Our top line revenue growth in the third quarter 2014 continued the strength that we've seen for the last several quarters, up 26% versus the 3rd quarter 2013 and up 3% sequentially compared to 2nd quarter 2014. Our South Hampton subsidiary experienced very strong volume trends, with volume up 27% to 21.6 million gallons," said Nick Carter, CEO and President of Trecora Resources. "We are also, very pleased to announce that we have completed the SSI Chusei ("Chusei") acquisition and believe strongly that this acquisition gives us the ability to grow market share, increase product and customer diversity, and expand our footprint in specialty products and services," added Mr. Carter.

Financial Results

Trecora's third quarter revenues were another quarterly record at $76.9 million, an increase of 26.4% from the $60.9 million in the third quarter of 2013.

Volume was also at record levels for the quarter at 21.6 million gallons, a 27.4% increase from the 16.9 million gallon levels for the third quarter of 2013.

Gross profit margin for the quarter was 16.9% compared to 16.6% for the third quarter 2013 and up from 15.7% for the second quarter of 2014. Gross profit for the quarter was $13.0 million compared to $10.1 million in the same quarter last year.

Net income for Trecora Resources in the third quarter 2014 was $5.8 million, or $0.23 per diluted share ($0.24 per basic share) compared to $ 5.2 million or $0.21 per diluted share ($0.22 per basic share) in the third quarter of 2013. Net income was negatively impacted by the acquisition costs associated with the recent purchase of Chusei and the $343,000 equity in loss of AMAK, yet still showed a 10.6% increase for the quarter.  Operating Income increased 34.6% to $ 8.8 million in the third quarter versus $6.6 million in the 3rd quarter last year reflecting the strength at South Hampton.

EBITDA for the third quarter of 2014 was $9.5 million compared to $8.8 million for the third quarter of 2013. Adjusted EBITDA, which removes the effects of AMAK for comparative purposes, for the third quarter of 2014 was $9.8 million compared to $7.5 million in 2013.

Cash at the end of the quarter was $13.9 million compared to $7.1 million as of September 30, 2013.  The increase in cash was primarily in anticipation of the Chusei acquisition which closed on October 1, 2014.  Cash provided by operations was $18.3 million, cash used by investing activities was $8.0 million and cash used by financing was $4.0 million. 

Earnings Call

The conference call and presentation slides will be simulcast live on the Internet, and can be accessed by going to the investor relations section of the Company's web site at http://www.trecora.com/ or by using this link: http://public.viavid.com/index.php?id=111583. A replay of the call will also be available through the same link.

To participate via telephone, callers should dial in five to ten minutes prior to the 4:30 pm Eastern start time; domestic callers (U.S. and Canada) should call 1-888-298-3451 or 1-719-457-2710 if calling internationally. To listen to the playback, please call 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Use pin number 2028517 for the replay.

Use of Non-GAAP Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP").  This press release contains the non-GAAP measures: EBITDA and Adjusted EBITDA.  Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Forward-Looking Statements

Statements in this press release that are not historical facts are forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon our belief, as well as, assumptions made by and information currently available to us. Because such statements are based upon expectations as to future economic performance and are not statements of fact, actual results may differ from those projected. These risks, as well as others, are discussed in greater detail in Trecora Resources' filings with the Securities and Exchange Commission, including Trecora Resources' Annual Report on Form 10-K for the year ended December 31, 2013, and the Company's subsequent Quarterly Reports on Form 10-Q.  All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release.

About Trecora Resources (TREC)

TREC owns and operates a petrochemical facility located in southeast Texas, just north of Beaumont which specializes in high purity petrochemical solvents and other solvent type manufacturing. The Company is also the original developer and a 35% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.  Recently, Trecora purchased Chusei, a leading manufacturer of specialty polyethylene waxes and also a provider of custom processing services.  Chusei is located in the heart of the Petrochemical complex in Pasadena, Texas.

Company Contact:

Nick Carter, President and Chief Executive Officer
(409) 385-8300
ncarter@trecora.com

Investor Relations Contact:

Jeffery Fowlds
Genesis Select
(303) 415-0200
jfowlds@genesisselect.com

 

TRECORA RESOURCES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS






SEPTEMBER 30,

2014

(unaudited)

DECEMBER 31,

2013


ASSETS

(thousands of dollars)


 Current Assets




  Cash and cash equivalents

$  13,948

$  7,608


  Trade receivables, net

27,625

22,069


  Advance to AMAK

-

536


  Inventories

11,956

12,063


  Prepaid expenses and other assets

2,520

2,075


  Contractual based intangible assets, net

-

104


  Taxes receivable

-

571


  Deferred income taxes

839

1,324


          Total current assets

56,888

46,350






  Plant, pipeline and equipment, net

46,251

41,925






  Investment in AMAK

53,408

54,095


  Mineral properties in the United States

588

588


  Other assets

772

709






     TOTAL ASSETS

$ 157,907

$ 143,667


 

LIABILITIES



  Current Liabilities



    Accounts payable

$  12,605

$  7,362

    Accrued interest

81

102

    Current portion of derivative instruments

198

292

    Accrued liabilities

3,881

3,060

    Accrued liabilities in Saudi Arabia

140

140

    Current portion of post-retirement benefit

284

278

    Current portion of long-term debt

1,400

1,400

    Current portion of other liabilities

1,080

1,654

          Total current liabilities

19,669

14,288




  Long-term debt, net of current portion

7,789

11,839

  Post-retirement benefit, net of current portion

649

649

  Derivative instruments, net of current portion

183

319

  Other liabilities, net of current portion

706

1,369

  Deferred income taxes

10,580

11,984

     Total liabilities

39,576

40,448




EQUITY



  Common stock‑authorized 40 million shares of $.10 par value; issued and outstanding

      23.9 million and 23.8 million shares in 2014 and 2013, respectively

2,395

2,383

  Additional paid-in capital

47,673

46,064

  Accumulated other comprehensive loss

(248)

(366)

  Retained earnings

68,222

54,849

  Total Trecora Resources Stockholders' Equity

118,042

102,930

  Noncontrolling Interest

289

289

   Total equity

118,331

103,219




     TOTAL LIABILITIES AND EQUITY

$ 157,907

$ 143,667

 

 

TRECORA RESOURCES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)





THREE MONTHS ENDED

NINE MONTHS ENDED


SEPTEMBER 30,

SEPTEMBER 30,


2014

2013

2014

2013


(thousands of dollars)

REVENUES





  Petrochemical Product Sales

$ 75,283

$ 59,354

$ 210,517

$ 165,737

  Processing Fees

1,634

1,516

5,054

3,853


76,917

60,870

215,571

169,590






OPERATING COSTS AND EXPENSES





  Cost of  Sales and Processing





    (including depreciation of  $881, $834, $2,614, and $2,497,  respectively)

63,873

50,772

182,112

144,246






   GROSS PROFIT

13,044

10,098

33,459

25,344






GENERAL AND ADMINISTRATIVE EXPENSES





  General and Administrative

4,086

3,411

12,430

10,368

  Depreciation

131

129

406

389


4,217

3,540

12,836

10,757






OPERATING INCOME

8,827

6,558

20,623

14,587






OTHER INCOME (EXPENSE)





  Interest Income

8

4

26

5

  Interest Expense

(70)

(141)

(169)

(379)

  Losses on Cash Flow Hedge Reclassified from OCI

(60)

(73)

(190)

(231)

  Equity in earnings (loss) of AMAK

(343)

1,302

(687)

8,998

  Miscellaneous Expense

2

(57)

(47)

(146)


(463)

1,035

(1,067)

8,247






  INCOME BEFORE INCOME TAXES

8,364

7,593

19,556

22,834






  INCOME TAXES

2,590

2,372

6,183

6,519






  NET INCOME

5,774

5,221

13,373

16,315






 NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST

--

--

--

--






 NET INCOME ATTRIBUTABLE TO TRECORA RESOURCES

$ 5,774

$ 5,221

$ 13,373

$ 16,315






Basic Earnings per Common Share





  Net Income Attributable to Trecora Resources (dollars)

$ 0.24

$ 0.22

$ 0.55

$ 0.68






  Basic Weighted Average Number of Common Shares Outstanding

24,175

24,116

24,163

24,110






Diluted Earnings per Common Share





  Net Income Attributable to Trecora Resources (dollars)

$ 0.23

$ 0.21

$ 0.54

$ 0.66






  Diluted Weighted Average Number of Common Shares Outstanding

24,880

24,782

24,870

24,697

 

TRECORA RESOURCES AND SUBSIDIARIES
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES(1)


THREE MONTHS ENDED


30-Sep


2014

2013




NET INCOME

$    5,774

$    5,221




Add back:



  Interest

130

214

  Taxes

2,590

2,372

  Depreciation

1,012

963




EBITDA

$    9,506

$    8,770




 Equity in (Earnings) Losses of AMAK

343

(1,302)




Adjusted EBITDA

$    9,849

$   7,468

(1)This press release includes non-GAAP measures.  Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

SOURCE Trecora Resources