Trecora Resources Announces Fourth Quarter and Full Year 2020 Results
Trecora Resources (TREC) reported its Q4 2020 financial results, showing a net loss of $0.1 million, significantly improved from a $19.7 million loss in Q4 2019. Total revenue decreased by 5.8% year-over-year to $58.1 million, driven by lower sales prices amid COVID-19 impacts. Adjusted EBITDA from continuing operations for Q4 was $4.8 million, down from $6.4 million in Q4 2019. Despite challenges due to the Texas utility outages, Trecora maintains a strong liquidity position with $55.7 million in cash and an undrawn revolver, and has initiated a $20 million share repurchase program.
- Net loss improved to $0.1 million in Q4 2020 from $19.7 million in Q4 2019.
- Liquidity remains strong with $55.7 million cash and undrawn revolving credit.
- Initiated a $20 million share repurchase program.
- Total revenue fell 5.8% year-over-year to $58.1 million due to lower sales prices.
- Adjusted EBITDA decreased to $4.8 million in Q4 2020 from $6.4 million in Q4 2019.
- Full year revenue declined 19.4% compared to 2019, primarily from lower sales volumes.
SUGAR LAND, Texas, March 8, 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 fourth quarter and full year ended December 31, 2020.
Executive Commentary
"We fulfilled the commitments we pledged at the onset of 2020 despite the extraordinary challenges that unfolded during the year. Completing the sale of our non-core AMAK investment strengthened our balance sheet by allowing us to significantly reduce bank debt to target levels while also maintaining significant liquidity for growth opportunities. The successful launch and execution of our growth portfolio program across the company delivered
"We are currently managing the industry-wide impact of the recent freeze event in Texas and the related utility failures. While the full impact on first quarter remains uncertain, we believe we are well-positioned at the start of 2021 to benefit from the strength of our end markets that continue to recover, and from our growth portfolio that continues to progress and evolve. This has given us the confidence to initiate our
Sami Ahmad, Trecora's Chief Financial Officer stated, "While prime product sales for the year were severely impacted by the pandemic, declining nearly
"We ended the year with substantial liquidity and a strong balance sheet. Cash at year end was approximately
Fourth Quarter 2020 Financial Results
Net loss in the fourth quarter of 2020 was
Total revenue in the fourth quarter of 2020 was
Gross profit in the fourth quarter of 2020 was
Specialty Petrochemicals
Specialty Petrochemicals net income was
Prime product volume in the fourth quarter of 2020 was 17.6 million gallons, compared to 14.7 million gallons in the third quarter of 2020 and 16.3 million gallons in the fourth quarter of 2019. By-product sales volume was 4.5 million gallons in the fourth quarter of 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the fourth quarter of 2020 was
Dollar amounts in thousands/rounding may apply | THREE MONTHS | |||
DECEMBER 31, | ||||
2020 | 2019 | % Change | ||
Product sales | ( | |||
Processing fees | 1,249 | 1,450 | ( | |
Gross revenues | ( | |||
Operating profit before depreciation and amortization | 6,436 | 7,011 | ( | |
Operating profit | 3,730 | 5,419 | ( | |
Net profit before taxes | 3,393 | 3,900 | ( | |
Depreciation and amortization | 2,706 | 1,592 | ||
Adjusted EBITDA | 6,442 | 8,020 | ( | |
Capital expenditures | 2,267 | 1,953 | ||
Specialty Waxes
Specialty Waxes net loss was
Processing fees, which were approximately
Dollar amounts in thousands/rounding may apply | THREE MONTHS | |||||
DECEMBER 31, | ||||||
2020 | 2019 | % Change | ||||
Product sales | ||||||
Processing fees | 1,974 | 2,887 | ( | |||
Gross revenues | ||||||
Operating loss before depreciation and amortization | (247) | (23,990) | ||||
Operating loss | (1,676) | (25,287) | ||||
Net loss before taxes | (1,626) | (25,541) | ||||
Depreciation and amortization | 1,429 | 1,298 | ||||
Adjusted EBITDA | (169) | 154 | ( | |||
Capital expenditures | 775 | 1,828 | ( | |||
2020 Full Year Financial Results
Net income for full year 2020 was
Total revenue for full year 2020 was
Gross profit for full year 2020 was
Specialty Petrochemicals
Specialty Petrochemicals net income was
Dollar amounts in thousands/rounding may apply | YEAR ENDED | |||
DECEMBER 31, | ||||
2020 | 2019 | % Change | ||
Product sales | ( | |||
Processing fees | 5,296 | 5,568 | ( | |
Gross revenues | ( | |||
Operating profit before depreciation and amortization | 26,438 | 38,860 | ( | |
Operating profit | 15,827 | 28,304 | ( | |
Net profit before taxes | 13,294 | 23,993 | ( | |
Depreciation and amortization | 10,611 | 10,556 | ||
Adjusted EBITDA | 26,399 | 39,154 | ( | |
Capital expenditures | 11,334 | 6,955 | ||
Specialty Waxes
Specialty Waxes net loss of
Dollar amounts in thousands/rounding may apply | YEAR ENDED | |||
DECEMBER 31, | ||||
2020 | 2019 | % Change | ||
Product sales | ||||
Processing fees | 10,955 | 10,078 | ||
Gross revenues | ||||
Operating profit (loss) before depreciation and amortization | 1,762 | (24,333)) | ||
Operating loss | (3,760) | (29,925) | ||
Net loss before taxes | (3,606) | (31,164) | ||
Depreciation and amortization | 5,522 | 5,593 | ( | |
Adjusted EBITDA | 1,961 | (207) | 1, | |
Capital expenditures | 2,017 | 3,124 | ( | |
Utility Outages and Outlook
"Widespread utilities failures in Texas created after a cold front brought record low temperatures, snow and rolling blackouts across the state, caused disruptions for our suppliers, our customers and at our own facilities. Our South Hampton facility resumed operations on February 23rd while our TC facility began resuming operations on March 4th. Within the first quarter, the company is expecting the loss of sales volumes as well as repair costs to ancillary equipment. However, we expect continued growth as the economy recovers from the impacts of the pandemic along with pent-up demand from the first quarter weather outages to result in improved demand as we head into the second quarter," stated Mr. Quarles.
Earnings Call
Tomorrow's conference call, on March 9, 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/r9ttn5kj. 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 2259714. 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 2259714 for the replay.
Use of Non-GAAP Measures
This press release includes the use of 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 measure 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. 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 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, product and mineral 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 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.
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 | ||||
December 31, 2020 | December 31, 2019 | |||
ASSETS | (thousands of dollars, except par value) | |||
Current Assets | ||||
Cash | $ 55,664 | $ 6,145 | ||
Trade receivables, net | 25,301 | 26,320 | ||
Inventories | 12,945 | 13,624 | ||
Investment in AMAK (held-for-sale) | - | 32,872 | ||
Prepaid expenses and other assets | 9,198 | 4,947 | ||
Taxes receivable | 2,788 | 182 | ||
Total current assets | 105,896 | 84,090 | ||
Plant, pipeline and equipment,net | 187,104 | 188,919 | ||
Operating lease assets, net | 10,528 | 13,512 | ||
Intangible assets, net | 12,893 | 14,736 | ||
Mineral properties | 412 | 562 | ||
TOTAL ASSETS | 316,833 | 301,819 | ||
LIABILITIES | ||||
Current Liabilities | ||||
Accounts payable | 14,447 | 14,603 | ||
Accrued liabilities | 6,857 | 5,742 | ||
Current portion of long-term debt | 4,194 | 4,194 | ||
Current portion of lease liabilities | 3,195 | 3,174 | ||
Current portion of other liabilities | 891 | 922 | ||
Total current liabilities | 29,584 | 28,635 | ||
CARES Act, PPP Loans | 6,123 | - | ||
Long-term debt, net of current portion | 41,901 | 79,095 | ||
Post-retirement benefit, net of current portion | 320 | 338 | ||
Lease liablities, net of current portion | 7,333 | 10,338 | ||
Other liabilities, net of current portion | 648 | 595 | ||
Deferred income taxes | 26,517 | 11,375 | ||
Total liabilities | 112,426 | 130,376 | ||
EQUITY | ||||
Common stock‑authorized 40 million shares of | 2,483 | 2,475 | ||
Additional paid-in capital | 61,311 | 59,530 | ||
Retained earnings | 140,324 | 109,149 | ||
Total Trecora Resources Stockholders' Equity | 204,118 | 171,154 | ||
Noncontrolling Interest | 289 | 289 | ||
Total equity | 204,407 | 171,443 | ||
TOTAL LIABILITIES AND EQUITY | 316,833 | 301,819 | ||
TRECORA RESOURCES AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||
(unaudited) | (unaudited) | |||||||
2020 | 2019 | 2020 | 2019 | |||||
(thousands of dollars, except per share amounts) | ||||||||
Revenues | ||||||||
Product sales | $ 54,915 | $ 57,381 | $ 192,375 | $ 243,314 | ||||
Processing fees | 3,223 | 4,337 | 16,251 | 15,645 | ||||
58,138 | 61,718 | 208,626 | 258,959 | |||||
Operating costs and expenses | ||||||||
Cost of sales and processing (including depreciation and amortization of | 52,162 | 53,408 | 179,948 | 220,444 | ||||
Gross Profit | 5,976 | 8,310 | 28,678 | 38,515 | ||||
General and Administrative Expenses | ||||||||
General and administrative | 6,163 | 5,854 | 24,892 | 24,386 | ||||
Impairment of goodwill and certain intangibles | - | 24,152 | - | 24,152 | ||||
Depreciation | 211 | 211 | 848 | 840 | ||||
6,374 | 30,217 | 25,740 | 49,378 | |||||
Operating income (loss) | (398) | (21,907) | 2,938 | (10,863) | ||||
Other income (expense) | ||||||||
Interest expense | (332) | (1,028) | (2,491) | (5,139) | ||||
Loss on disposal of assets | (30) | (651) | (39) | (680) | ||||
Miscellaneous income (expense), net | 602 | (98) | 595 | 232 | ||||
240 | (1,777) | (1,935) | (5,587) | |||||
Income (loss) from continuing operations before income taxes | (158) | (23,684) | 1,003 | (16,450) | ||||
Income tax benefit | 21 | 4,978 | 3,963 | 3,566 | ||||
Income (loss) from continuing operations | (137) | (18,706) | 4,966 | (12,884) | ||||
Income (loss) from discontinued operations, net of tax | 30 | (970) | 26,209 | (2,090) | ||||
Net income (loss) | (107) | (19,676) | 31,175 | (14,974) | ||||
Basic earnings per common share | ||||||||
Net income (loss) from continuing operations (dollars) | $ (0.01) | $ (0.76) | $ 0.20 | $ (0.52) | ||||
Net income (loss) from discontinued operations, net of tax (dollars) | $ - | $ (0.04) | $ 1.06 | $ (0.08) | ||||
Net income (loss) (dollars) | $ (0.01) | $ (0.80) | $ 1.26 | $ (0.61) | ||||
Basic weighted average number of common shares outstanding | 24,823 | 24,728 | 24,802 | 24,698 | ||||
Diluted earnings per common share | ||||||||
Net income (loss) from continuing operations (dollars) | $ (0.01) | $ (0.76) | $ 0.20 | $ (0.52) | ||||
Net income (loss) from discontinued operations, net of tax (dollars) | $ - | $ (0.04) | $ 1.03 | $ (0.08) | ||||
Net income (loss) (dollars) | $ (0.01) | $ (0.80) | $ 1.23 | $ (0.61) | ||||
Diluted weighted average number of common shares outstanding | 24,823 | 24,728 | 25,356 | 24,698 | ||||
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 | ||||||||
12/31/2020 | 12/31/2019 | ||||||||
SPEC. PETRO | SPEC. WAX | CORP | TREC | SPEC. PETRO | SPEC. WAX | CORP | TREC | ||
NET INCOME (LOSS) | $ 4,758 | $ (3,221) | $ (1,653) | $ (116) | $ 8,490 | ||||
Income (Loss) from discontinued operations, net of tax | - | - | 30 | 30 | - | - | (970) | (970) | |
Income (Loss) from continuing operations * | $ 4,758 | $ (3,221) | $ (1,683) | $ (146) | $ 8,490 | $ (25,541) | |||
Interest | 331 | - | 1 | 332 | 928 | 100 | - | 1,028 | |
Income tax expense (benefit) | (1,354) | 1,595 | (262) | (21) | (4,589) | - | (389) | (4,978) | |
Depreciation and amortization | 185 | 23 | 2 | 210 | 179 | 24 | 6 | 209 | |
Depreciation and amortization in cost of sales | 2,521 | 1,406 | - | 3,927 | 2,478 | 1,274 | - | 3,752 | |
EBITDA from continuing operations * | 6,441 | (197) | (1,942) | 4,302 | 7,486 | (24,143) | (2,072) | (18,729) | |
Share based compensation | - | - | 490 | 490 | - | - | 346 | 346 | |
Loss on disposal of assets | 2 | 28 | - | 30 | 535 | 145 | - | 680 | |
Impairment of goodwill and certain intangibles | - | - | - | - | - | 24,152 | - | 24,152 | |
Adjusted EBITDA from continuing operations * | $ 6,443 | $ (169) | $ (1,452) | $ 4,822 | $ 8,021 | $ 154 | $ 6,449 | ||
Revenue | 49,101 | 9,037 | - | 58,138 | 52,843 | 8,875 | - | 61,718 | |
TWELVE MONTHS ENDED | TWELVE MONTHS ENDED | ||||||||
12/31/2020 | 12/31/2019 | ||||||||
SPEC. PETRO | SPEC. WAX | CORP | TREC | SPEC. PETRO | SPEC. WAX | CORP | TREC | ||
NET INCOME (LOSS) | $ 14,908 | $ (3,606) | $ 19,873 | $ 31,175 | $ 25,576 | $ (31,164) | |||
Gain (Loss) from discontinued operations, net of tax | - | - | 26,209 | 26,209 | - | - | (2,090) | (2,090) | |
Income (Loss) from continuing operations * | $ 14,908 | $ (3,606) | $ (6,336) | $ 4,966 | $ 25,576 | $ (31,164) | |||
Interest | 2,489 | - | 2 | 2,491 | 4,071 | 1,067 | 1 | 5,139 | |
Income tax benefit | (1,603) | - | (2,360) | (3,963) | (1,583) | - | (1,983) | (3,566) | |
Depreciation and amortization | 739 | 94 | 15 | 848 | 691 | 96 | 51 | 838 | |
Depreciation and amortization in cost of sales | 9,872 | 5,428 | - | 15,300 | 9,865 | 5,497 | 1 | 15,363 | |
EBITDA from continuing operations * | 26,405 | 1,916 | (8,679) | 19,642 | 38,620 | (24,504) | (9,226) | 4,890 | |
Share based compensation | - | - | 1,912 | 1,912 | - | - | 1,319 | 1,319 | |
(Gain) Loss on disposal of assets | (6) | 45 | - | 39 | 535 | 145 | - | 680 | |
Impairment of goodwill and certain intangibles | - | - | - | - | - | 24,152 | - | 24,152 | |
Adjusted EBITDA from continuing operations * | $ 26,399 | $ 1,961 | $ (6,767) | $ 21,593 | $ 39,155 | $ (207) | $ 31,041 | ||
Revenue | 172,350 | 36,276 | - | 208,626 | 224,311 | 34,648 | - | 258,959 | |
* Discontinued Operations only applicable within the Corporate segment | |||||||||
1 Based on 24.8 million shares outstanding
2 Based on 24.7 million shares outstanding
3 Based on 24.8 million shares outstanding
4 Based on 24.7 million shares outstanding
5 Based on 25.4 million shares outstanding
6 Based on 24.7 million shares outstanding
7 Based on 25.4 million shares outstanding
8 Based on 24.7 million shares outstanding
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SOURCE Trecora Resources
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