Rentech, Inc. (NASDAQ: RTK) today announced selected financial results
for the three and six months ended June 30, 2014. The company is
completing its review of the accounting for impairments of goodwill
related to its Pasadena facility. The company expects an impairment of
goodwill, a non-cash item, related to the Pasadena facility in the
second quarter of 2014 of up to the remaining balance of approximately
$27 million. The company currently expects to file its form 10-Q on
schedule on Monday, with complete financial results for the periods. In
the interest of timely disclosure, the company elected to disclose the
partial results contained in this press release.
D. Hunt Ramsbottom, president and CEO of Rentech, said, “Market
conditions have improved for our East Dubuque facility, leading us to
issue 2014 guidance today of approximately $100 million of Adjusted
EBITDA for that facility. The same strength in ammonia prices that is
helping results at East Dubuque is hurting our margins at Pasadena.
Significantly lower product margins for Pasadena in recent weeks have
led us to reduce our outlook for the year, to an Adjusted EBITDA loss of
approximately $10 million. We expect to implement a restructured
operating plan designed to generate positive Adjusted EBITDA from
Pasadena’s fertilizer operations, even in a pricing environment as
unfavorable as today’s. Additionally, we have engaged an advisory firm
to help us evaluate terminalling proposals we have received, and
consider other opportunities to maximize the value of our site along the
Houston Ship Channel.”
Mr. Ramsbottom continued, “The East Dubuque facility had a seasonally
strong quarter, driven by robust demand and the increased output at that
plant. We have locked in the majority of our sales and natural gas
purchases for the year for East Dubuque.”
“Our wood fibre businesses continue to grow,” said Mr. Ramsbottom.
“Construction of our Canadian wood pellet projects is nearing
completion, and we will begin commissioning the plants in the second
half of this year. Integration of our recently acquired New England Wood
Pellet business is going smoothly, and it is performing as well as we
expected.” Mr. Ramsbottom continued, “We are focused on execution at our
operating businesses while pushing forward on specific opportunities to
significantly expand our wood chipping and pellet businesses.”
Summary of Selected Results
Rentech’s selected financial results reflect the results of Rentech,
Inc. and its subsidiaries, including its wood fibre processing business,
Rentech Nitrogen Partners, L.P. (NYSE: RNF) (Rentech Nitrogen), and
Energy Technologies as a discontinued operation. The results of the wood
fibre processing business are reported as three operating segments:
Fulghum Fibres (Fulghum), Wood Pellets: New England Wood Pellet (NEWP),
and Wood Pellets: Industrial (Canadian operations and wood pellet
business development). Rentech owns the general partner and
approximately 60% of the common units representing limited partner
interests of Rentech Nitrogen. Rentech Nitrogen’s results include two
operating segments: the East Dubuque, Illinois facility and the
Pasadena, Texas facility.
The company currently expects to record in the second quarter an
impairment of goodwill related to the Pasadena facility of up to the
remaining balance of approximately $27 million. The company is
completing its review of the goodwill and its impairment related to the
Pasadena plant. The partial results reported below do not reflect the
impact of any goodwill impairment in the second quarter.
The financial results of Fulghum Fibres and NEWP were included in
results of operations only since the dates of their acquisitions, which
were May 1, 2013 and May 1, 2014, respectively.
Three months ended June 30, 2014
Consolidated revenues for the three months ended June 30, 2014 were
$139.9 million, compared to $120.1 million in the prior-year period.
These revenues were comprised of:
-
$19.8 million from Fulghum Fibres, an increase of $3.7 million from
the prior-year period;
-
$5.8 million from Wood Pellets: NEWP;
-
$0.7 million from Wood Pellets: Industrial; and
-
$113.6 million from Rentech Nitrogen, an increase of $9.6 million from
the prior-year period.
Gross profit was $31.4 million, compared to $42.3 million in the
prior-year period. Gross profit was comprised of:
-
$2.0 million from Fulghum Fibres, a decrease of $0.4 million from the
prior-year period;
-
$1.1 million from Wood Pellets: NEWP;
-
$0.1 million from Wood Pellets: Industrial; and
-
$28.2 million from Rentech Nitrogen, a decrease of $11.6 million from
the prior-year period.
Consolidated Adjusted EBITDA, which excludes the impact of the expected
impairment of goodwill, was $22.9 million, a decrease of $11.6 million
compared to the prior-year period. Consolidated Adjusted EBITDA included
the following:
-
$2.1 million from Fulghum Fibres, a decrease of $1.0 million from the
prior-year period;
-
$1.0 million from Wood Pellets: NEWP; and
-
$30.7 million from Rentech Nitrogen, a decrease of $7.7 million from
the prior-year period.
Further explanation of Adjusted EBITDA, a non-GAAP financial measure,
appears below in this press release.
Fulghum Fibres
Fulghum Fibres’ revenues were $19.8 million for the three months ended
June 30, 2014, compared to $16.1 million for the same period last year.
The increase was due to Rentech’s ownership of Fulghum Fibres for the
full three months ended June 30, 2014 as compared to two months last
year.
For the three months ended June 30, 2014, $14.6 million of revenues were
generated from U.S. operations, while $5.2 million of revenues were from
South America. For the same period last year, $9.8 million of revenues
were generated from operations in the U.S. and $6.3 million of revenues
were from South America. During the three months ended June 30, 2014,
mills in the U.S. processed 3.1 million green metric tons (GMT) of logs
into wood chips and residual fuels; mills in South America processed 0.5
million GMT of logs into wood chips and residual fuels.
Several of Fulghum’s customers experienced outages at their product
mills causing lower than expected processing volumes for Fulghum for the
period. During the customers’ downtime, Fulghum conducted deferred
maintenance at several of its facilities, which is expected to lead to
improved operating performance in the future. Completing this deferred
maintenance, however, increased operating costs during the quarter.
Wood Pellets: New England Wood Pellet
NEWP’s revenues were $5.8 million from May 1, 2014 through June 30, 2014
on deliveries of 28,000 tons of wood pellets. Cold weather extended into
the spring, causing deliveries of, and prices for, NEWP’s wood pellets
to be higher in some markets. These factors yielded higher revenues than
are typical for this time of year.
Wood Pellets: Industrial
The first revenues for this segment, $0.7 million, were recognized
during the second quarter of 2014. During the quarter, Rentech acquired
and delivered to Ontario Power Generation (OPG) 3,300 metric tons of
wood pellets sourced from a third-party regional wood pellet producer.
These wood pellets supported the commissioning phase of OPG’s converted
power plant.
Nitrogen Product Manufacturing
Revenues for the three months ended June 30, 2014 were $113.6 million,
compared to $104.0 million for the same period in the prior year.
Revenues increased 20% from the prior-year quarter at the East Dubuque,
Illinois facility; they decreased 6% over the prior-year quarter at the
Pasadena, Texas facility.
Gross margin for the three months ended June 30, 2014 was 25%, compared
to 38% for the same period last year.
Adjusted EBITDA, which excludes the impact of the expected impairment of
goodwill, for the three months ended June 30, 2014 was $30.7 million.
This compares to $38.4 million in the corresponding 2013 period. A
further explanation of Adjusted EBITDA, a non-GAAP financial measure,
appears below in this press release.
East Dubuque Facility
Revenues for the three months ended June 30, 2014 were $73.9 million,
compared to $61.7 million for the same period last year. The increase
was the result of higher ammonia and UAN deliveries, partially offset by
lower sales prices for ammonia and UAN.
Average sales prices per ton for the three months ended June 30, 2014
were 26% lower for ammonia and 14% lower for UAN, as compared with the
same period last year. These two products comprised 88% of the total
revenues for the three months ended June 30, 2014 and 84% of total
revenues for the same period last year. The decreases in sales prices
for ammonia and UAN were consistent with the decline in global nitrogen
fertilizer prices between the two periods. These decreases were caused
by significantly higher levels of low-priced urea in the global market,
particularly from China. Prices were also affected by additional
nitrogen fertilizer production brought on line in North America over the
last 12 months.
Gross profit was $33.0 million for the three months ended June 30, 2014;
this compares to $37.5 million for the same period last year. Gross
profit margin for the three months ended June 30, 2014 was 45%, compared
to 61% for the same period last year.
Adjusted EBITDA for the three months ended June 30, 2014 for the East
Dubuque facility was $36.8 million. This compares to Adjusted EBITDA of
$38.9 million in the corresponding period in 2013. A further explanation
of Adjusted EBITDA, a non-GAAP financial measure, appears below in this
press release.
Pasadena Facility
Revenues for the three months ended June 30, 2014 were $39.7 million,
compared to $42.2 million for the same period last year. A reduction in
sales prices for all products was partially offset by an increase in
ammonium sulfate sales volumes. Production of ammonium sulfate increased
after the completion of the debottlenecking project in December 2013,
and sales increased due to favorable weather during the planting season,
and an increase in international sales.
Average sales prices per ton dropped by 30% for ammonium sulfate and by
3% for sulfuric acid for the three months ended June 30, 2014, as
compared with the same period last year. These two products comprised
93% of the Pasadena facility’s revenues for the three months ended June
30, 2014 and 87% for the same period last year. A higher proportion of
export sales, priced lower than domestic sales, contributed to the
decline in average product price. A global decline in nitrogen prices,
along with higher exports of ammonium sulfate from China, put downward
pressure on ammonium sulfate prices. The additional supplies from China
originate from new plants that produce ammonium sulfate as a by-product
of caprolactam.
Gross loss was $4.7 million for the three months ended June 30, 2014,
compared to gross profit of $2.4 million for the same period last year.
Gross loss margin for the three months ended June 30, 2014 was 12%
compared to gross profit margin of 6% for the same period last year. The
decreases in gross profit and gross profit margin were primarily due to
declines in average sales prices for ammonium sulfate, increases in the
cost of raw materials and a write-down of inventories. For the three
months ended June 30, 2014, the partnership wrote down ammonium sulfate
inventory by $2.8 million because production costs exceeded estimated
selling prices for that inventory. During the same period last year, the
partnership wrote down ammonium sulfate inventory by $1.8 million.
Adjusted EBITDA, which excludes the impact of the expected impairment of
goodwill, for the three months ended June 30, 2014 for the Pasadena
facility was a loss of $3.8 million. This compares to Adjusted EBITDA of
$2.0 million in the corresponding period in 2013. A further explanation
of Adjusted EBITDA, a non-GAAP financial measure, appears below in this
press release.
Corporate Unallocated Expenses
Corporate unallocated expenses included in selling, general and
administrative (SG&A) expenses were $7.8 million for the three months
ended June 30, 2014, compared to $6.3 million in the corresponding
period in 2013. Non-cash compensation expenses were $1.5 million for the
three months ended June 30, 2014 and $1.6 million for the prior-year
quarter. The increase in corporate unallocated expenses was primarily
due to transaction costs related to the NEWP acquisition and costs
associated with evaluating shareholder proposals and making settlements
with shareholders.
Six months ended June 30, 2014
Consolidated revenues were $224.7 million for the six months ended June
30, 2014, compared to $179.6 million in the prior-year period. These
revenues were comprised of:
-
$48.4 million from Fulghum Fibres, an increase of $32.3 million from
the prior-year period;
-
$5.8 million from Wood Pellets: NEWP;
-
$0.7 million from Wood Pellets: Industrial; and
-
$169.9 million from Rentech Nitrogen, an increase of $6.4 million from
the prior-year period.
Gross profit was $49.3 million, compared to $65.0 million in the
prior-year period. Gross profit was comprised of:
-
$6.1 million from Fulghum Fibres, an increase of $3.7 million from the
prior-year period;
-
$1.1 million from Wood Pellets: NEWP;
-
$0.1 million Wood Pellets: Industrial; and
-
$42.0 million from Rentech Nitrogen, a decrease of $20.6 million from
the prior-year period.
Consolidated Adjusted EBITDA, which excludes the impact of the expected
impairment of goodwill, was $30.3 million, compared to $47.3 million in
the prior-year period. Consolidated Adjusted EBITDA included the
following:
-
$6.7 million from Fulghum Fibres, an increase of $3.6 million from the
prior-year period;
-
$1.0 million from Wood Pellets: NEWP; and
-
$42.2 million from Rentech Nitrogen, a decrease of $16.9 million from
the prior-year period.
Further explanation of Adjusted EBITDA, a non-GAAP financial measure,
appears below in this press release.
Fulghum Fibres
Fulghum Fibres’ revenues were $48.4 million for the six months ended
June 30, 2014, compared to $16.1 million for the same period last year.
The increase was due to Rentech’s ownership of Fulghum Fibres for the
full six months ended June 30, 2014 as compared to two months last year.
For the six months ended June 30, 2014, U.S. operations generated $28.8
million of revenues while South American operations generated $19.6
million of revenues. For the same period last year, U.S. operations
generated $9.8 million of revenues; South American operations generated
$6.3 million of revenues. During the six months ended June 30, 2014,
mills in the U.S. processed 6.1 million GMT of logs into wood chips and
residual fuels, while mills in South America processed 1.3 million GMT
of logs.
A fire during the first quarter of 2014 at a Fulghum mill in Maine
disrupted operations, causing lower processing volumes and higher than
typical processing costs at the facility during the six months ended
June 30, 2014. Recoveries from insurance policies offset a significant
portion of these additional operating costs.
Wood Pellets: New England Wood Pellet
NEWP’s revenues were $5.8 million for the six months ended June 30, 2014
on deliveries of 28,000 tons of wood pellets.
Wood Pellets: Industrial
Revenues were $0.7 million for the six months ended June 30, 2014.
Nitrogen Products Manufacturing
Revenues for the six months ended June 30, 2014 were $169.9 million,
compared to $163.5 million for the same period in the prior year.
Revenues increased 6% over the first six months in the prior year at the
East Dubuque, Illinois facility; they remained flat over the prior-year
six months at the Pasadena, Texas facility.
Gross margin for the six months ended June 30, 2014 was 25%, compared to
38% for the same period last year.
Adjusted EBITDA, which excludes the impact of the expected impairment of
goodwill, for the six months ended June 30, 2014 was $42.2 million. This
compares to $59.1 million in the corresponding 2013 period. A further
explanation of Adjusted EBITDA, a non-GAAP financial measure, appears
below in this press release.
East Dubuque Facility
Revenues for the six months ended June 30, 2014 were $102.4 million,
compared to $96.3 million for the same period last year. Increases in
ammonia and UAN deliveries and natural gas sales were partially offset
by lower sales prices for ammonia and UAN.
Average sales prices per ton for the six months ended June 30, 2014 were
26% lower for ammonia and 11% lower for UAN, as compared with the same
period last year. These two products comprised 80% of the total revenues
for the six months ended June 30, 2014 and 81% of total revenues for the
same period last year.
Gross profit was $45.4 million for the six months ended June 30, 2014,
compared to $56.2 million for the same period last year. Gross profit
margin for the six months ended June 30, 2014 was 44%, compared to 58%
for the same period last year.
Adjusted EBITDA for the six months ended June 30, 2014 for the East
Dubuque facility was $50.2 million. This compares to Adjusted EBITDA of
$58.5 million in the corresponding period in 2013. A further explanation
of Adjusted EBITDA, a non-GAAP financial measure, appears below in this
press release.
Pasadena Facility
Revenues for the six months ended June 30, 2014 were $67.5 million,
compared to $67.3 million for the same period last year. An increase in
ammonium sulfate sales volumes was almost completely offset by lower
sales prices for all products and lower sales volumes for sulfuric acid
and ammonium thiosulfate.
A scarcity of rail cars throughout North America during the first half
of 2014 hampered ammonium sulfate deliveries during the period. The
Pasadena facility leased rail cars directly to help alleviate the
problem, but the inability to move product affected opportunities to
pursue additional business. The lack of rail cars also caused storage
capacity constraints at the plant that required a curtailment of
production for five days in April. Rail availability is now back to
normal.
Average sales prices per ton dropped by 34% for ammonium sulfate and by
9% for sulfuric acid for the six months ended June 30, 2014, as compared
with the same period last year. These two products comprised 89% of
total revenues for the six months ended June 30, 2014 and 86% of total
revenues for the same period last year.
Gross loss was $3.4 million for the six months ended June 30, 2014,
compared to gross profit of $6.3 million for the same period last year.
Gross loss margin for the six months ended June 30, 2014 was 5%,
compared to gross profit margin of 9% for the same period last year. The
decreases in gross profit and gross profit margin were primarily due to
declines in average sales prices for ammonium sulfate and a write-down
of inventories. For the six months ended June 30, 2014, the partnership
wrote down ammonium sulfate inventory by $2.8 million because production
costs exceeded estimated selling prices for that inventory. During the
same period last year, the partnership wrote down sulfur, sulfuric acid
and ammonium sulfate inventory by $2.3 million.
Adjusted EBITDA, which excludes the impact of the expected impairment of
goodwill, for the six months ended June 30, 2014 for the Pasadena
facility was a loss of $3.5 million. This compares to Adjusted EBITDA of
$5.2 million in the corresponding period in 2013. A further explanation
of Adjusted EBITDA, a non-GAAP financial measure, appears below in this
press release.
Corporate Unallocated Expenses
Corporate unallocated expenses included in SG&A were $14.6 million for
the six months ended June 30, 2014, compared to $13.0 million in the
corresponding period in 2013. Non-cash compensation expenses were $2.8
million for the six months ended June 30, 2014 and $2.9 million for the
same period last year. The increase in corporate unallocated expenses
was due to transaction costs related to the NEWP acquisition and costs
associated with evaluating shareholder proposals and making settlements
with shareholders.
Conference Call with Management
The Company will hold a conference call today, August 7, 2014, at 3:00
p.m. PDT, during which Rentech's senior management will review the
Company's financial results for this period and provide an update on
corporate developments. Callers may listen to the live presentation,
which will be followed by a question and answer segment, by dialing
888-517-2513 or 847-619-6533 and entering the pass code 7750504#. An
audio webcast of the call will be available at www.rentechinc.com
within the Investor Relations portion of the site, under the
Presentations section. A replay will be available by audio webcast and
teleconference from 5:30 p.m. PDT on August 7 through 11:59 p.m. PDT on
August 17. The replay teleconference will be available by dialing
888-843-7419 or 630-652-3042 and entering the audience passcode 7750504#.
|
Rentech, Inc.
|
|
Selected Financial Results
|
|
(Amounts in Thousands)
|
|
|
|
|
|
|
For the Three Months
|
|
|
For the Six Months
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Revenues
|
|
|
$
|
139,890
|
|
|
$
|
120,061
|
|
|
|
$
|
224,721
|
|
|
|
$
|
179,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales
|
|
|
|
108,451
|
|
|
|
77,788
|
|
|
|
|
175,387
|
|
|
|
|
114,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
31,439
|
|
|
|
42,273
|
|
|
|
|
49,334
|
|
|
|
|
64,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
|
|
17,642
|
|
|
|
12,824
|
|
|
|
|
33,214
|
|
|
|
|
25,406
|
|
Depreciation and amortization
|
|
|
|
1,394
|
|
|
|
1,765
|
|
|
|
|
1,070
|
|
|
|
|
2,897
|
|
Other (income) expense
|
|
|
|
244
|
|
|
|
(4
|
)
|
|
|
|
(104
|
)
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
|
19,280
|
|
|
|
14,585
|
|
|
|
|
34,180
|
|
|
|
|
28,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income1
|
|
|
|
12,159
|
|
|
|
27,688
|
|
|
|
|
15,154
|
|
|
|
|
36,678
|
1Excludes the impact of the expected impairment of goodwill
related to the Pasadena facility.
|
|
|
Rentech, Inc.
|
|
Selected Financial Results
|
|
(Stated in Thousands)
|
|
|
|
|
|
|
For the Three Months
|
|
|
For the Six Months
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Dubuque
|
|
|
$
|
73,943
|
|
|
|
$
|
61,717
|
|
|
|
$
|
102,434
|
|
|
|
$
|
96,266
|
|
|
Pasadena
|
|
|
|
39,666
|
|
|
|
|
42,239
|
|
|
|
|
67,455
|
|
|
|
|
67,254
|
|
|
Fulghum Fibres
|
|
|
|
19,836
|
|
|
|
|
16,105
|
|
|
|
|
48,387
|
|
|
|
|
16,105
|
|
|
Wood Pellets: Industrial
|
|
|
|
667
|
|
|
|
|
—
|
|
|
|
|
667
|
|
|
|
|
—
|
|
|
Wood Pellets: NEWP
|
|
|
|
5,778
|
|
|
|
|
—
|
|
|
|
|
5,778
|
|
|
|
|
—
|
|
|
Total Segment Revenues
|
|
|
$
|
139,890
|
|
|
|
$
|
120,061
|
|
|
|
$
|
224,721
|
|
|
|
$
|
179,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Dubuque
|
|
|
$
|
32,952
|
|
|
|
$
|
37,493
|
|
|
|
$
|
45,350
|
|
|
|
$
|
56,239
|
|
|
Pasadena
|
|
|
|
(4,733
|
)
|
|
|
|
2,355
|
|
|
|
|
(3,367
|
)
|
|
|
|
6,328
|
|
|
Fulghum Fibres
|
|
|
|
2,019
|
|
|
|
|
2,425
|
|
|
|
|
6,150
|
|
|
|
|
2,425
|
|
|
Wood Pellets: Industrial
|
|
|
|
114
|
|
|
|
|
—
|
|
|
|
|
114
|
|
|
|
|
—
|
|
|
Wood Pellets: NEWP
|
|
|
|
1,087
|
|
|
|
|
—
|
|
|
|
|
1,087
|
|
|
|
|
—
|
|
|
Total Segment Gross Profit
|
|
|
$
|
31,439
|
|
|
|
$
|
42,273
|
|
|
|
$
|
49,334
|
|
|
|
$
|
64,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Dubuque
|
|
|
$
|
1,088
|
|
|
|
$
|
1,097
|
|
|
|
$
|
2,221
|
|
|
|
$
|
2,442
|
|
|
Pasadena
|
|
|
|
1,247
|
|
|
|
|
1,342
|
|
|
|
|
3,076
|
|
|
|
|
2,584
|
|
|
Fulghum Fibres
|
|
|
|
1,651
|
|
|
|
|
859
|
|
|
|
|
3,052
|
|
|
|
|
859
|
|
|
Wood Pellets: Industrial
|
|
|
|
3,340
|
|
|
|
|
812
|
|
|
|
|
5,408
|
|
|
|
|
1,883
|
|
|
Wood Pellets: NEWP
|
|
|
|
391
|
|
|
|
|
—
|
|
|
|
|
391
|
|
|
|
|
—
|
|
|
Total Segment Selling, General and Administrative Expense
|
|
|
$
|
7,717
|
|
|
|
$
|
4,110
|
|
|
|
$
|
14,148
|
|
|
|
$
|
7,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Dubuque
|
|
|
$
|
38
|
|
|
|
$
|
33
|
|
|
|
$
|
75
|
|
|
|
$
|
106
|
|
|
Pasadena
|
|
|
|
337
|
|
|
|
|
875
|
|
|
|
|
633
|
|
|
|
|
1,750
|
|
|
Fulghum Fibres
|
|
|
|
950
|
|
|
|
|
718
|
|
|
|
|
141
|
|
|
|
|
718
|
|
|
Wood Pellets: Industrial
|
|
|
|
35
|
|
|
|
|
—
|
|
|
|
|
54
|
|
|
|
|
—
|
|
|
Wood Pellets: NEWP
|
|
|
|
(98
|
)
|
|
|
|
—
|
|
|
|
|
(98
|
)
|
|
|
|
—
|
|
|
Total Segment Depreciation and Amortization Recorded in Operating
Expenses
|
|
|
$
|
1,262
|
|
|
|
$
|
1,626
|
|
|
|
$
|
805
|
|
|
|
$
|
2,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Dubuque
|
|
|
$
|
31,598
|
|
|
|
$
|
36,370
|
|
|
|
$
|
42,832
|
|
|
|
$
|
53,683
|
|
|
Pasadena1
|
|
|
|
(6,317
|
)
|
|
|
|
138
|
|
|
|
|
(7,076
|
)
|
|
|
|
1,994
|
|
|
Fulghum Fibres
|
|
|
|
(583
|
)
|
|
|
|
845
|
|
|
|
|
2,956
|
|
|
|
|
845
|
|
|
Wood Pellets: Industrial
|
|
|
|
(3,261
|
)
|
|
|
|
(812
|
)
|
|
|
|
(5,006
|
)
|
|
|
|
(1,883
|
)
|
|
Wood Pellets: NEWP
|
|
|
|
794
|
|
|
|
|
—
|
|
|
|
|
794
|
|
|
|
|
—
|
|
|
Total Segment Operating Income1
|
|
|
$
|
22,231
|
|
|
|
$
|
36,541
|
|
|
|
$
|
34,500
|
|
|
|
$
|
54,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Operating Income to Consolidated
Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income
|
|
|
$
|
22,231
|
|
|
|
$
|
36,541
|
|
|
|
$
|
34,500
|
|
|
|
$
|
54,639
|
|
|
RNF – Partnership and unallocated expenses recorded as selling,
general and administrative expenses
|
|
|
|
(2,169
|
)
|
|
|
|
(2,462
|
)
|
|
|
|
(4,485
|
)
|
|
|
|
(4,616
|
)
|
|
Corporate and unallocated expenses recorded as selling, general and
administrative expenses
|
|
|
|
(7,756
|
)
|
|
|
|
(6,252
|
)
|
|
|
|
(14,581
|
)
|
|
|
|
(13,022
|
)
|
|
Corporate and unallocated depreciation and amortization expense
|
|
|
|
(132
|
)
|
|
|
|
(139
|
)
|
|
|
|
(265
|
)
|
|
|
|
(323
|
)
|
|
Corporate and unallocated expenses recorded as other expense
|
|
|
|
(15
|
)
|
|
|
|
—
|
|
|
|
|
(15
|
)
|
|
|
|
—
|
|
|
Consolidated Operating Income1
|
|
|
$
|
12,159
|
|
|
|
$
|
27,688
|
|
|
|
$
|
15,154
|
|
|
|
$
|
36,678
|
|
1Excludes the impact of the expected impairment of goodwill
related to the Pasadena facility.
|
|
|
|
Rentech, Inc.
|
|
Selected Financial Results
|
|
(Stated in Thousands)
|
|
|
|
|
|
|
As of
|
|
|
As of
|
|
|
|
|
|
|
June 30, 2014
|
|
|
December 31, 2013
|
|
|
|
|
|
|
(unaudited)
|
|
Cash - RNF
|
|
|
|
|
$
|
20,100
|
|
|
$
|
34,060
|
|
Cash excluding RNF
|
|
|
|
|
|
53,521
|
|
|
|
72,309
|
|
Total Cash
|
|
|
|
|
$
|
73,621
|
|
|
$
|
106,369
|
|
|
|
|
|
|
|
|
|
|
|
Debt - RNF
|
|
|
|
|
$
|
320,000
|
|
|
$
|
320,000
|
|
Debt excluding RNF
|
|
|
|
|
|
123,739
|
|
|
|
101,979
|
|
Total Debt
|
|
|
|
|
$
|
443,739
|
|
|
$
|
421,979
|
|
|
|
|
|
|
|
|
|
|
|
|
Disclosure Regarding Non-GAAP Financial Measures
Adjusted EBITDA for Rentech, and Adjusted EBITDA for Rentech Nitrogen
are defined as operating income, excluding the impact of the expected
impairment of goodwill at the Pasadena facility, plus depreciation and
amortization. Adjusted EBITDA for Fulghum Fibres and NEWP are defined as
operating income plus depreciation and amortization.
The non-GAAP financial measures described above are used as supplemental
financial measures by management and by external users of our financial
statements, such as investors and commercial banks, to assess:
-
the financial performance of our assets without regard to financing
methods, capital structure or historical cost basis; and
-
our operating performance and return on invested capital compared to
those of other publicly traded limited partnerships and other public
companies, without regard to financing methods and capital structure.
These non-GAAP financial measures should not be considered an
alternative to any measure of financial performance or liquidity
presented in accordance with GAAP. These non-GAAP financial measures may
have material limitations as performance measures because they exclude
items that are necessary elements of our businesses’ costs and
operations. In addition, EBITDA and Adjusted EBITDA presented by other
companies may not be comparable to our presentation of those measures,
since each company may define these terms differently.
The following reconciliations do not give effect to an expected
impairment of goodwill charge related to the Pasadena facility for the
three and six months ended June 30, 2014.
The table below reconciles Rentech’s consolidated Adjusted EBITDA from
operating income1 for the three months ended June 30, 2014
and 2013.
|
Rentech, Inc.
|
|
(Stated in Thousands)
|
|
|
|
|
|
|
|
|
For the Three Months
|
|
|
For the Three Months
|
|
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
(unaudited)
|
|
Operating Income1
|
|
|
|
|
$ 12,159
|
|
|
$ 27,688
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
10,708
|
|
|
6,802
|
|
Adjusted EBITDA1
|
|
|
|
|
$ 22,867
|
|
|
$ 34,490
|
1Excludes the impact of the expected impairment of goodwill
related to the Pasadena facility.
The table below reconciles Rentech’s consolidated Adjusted EBITDA from
operating income1 for the six months ended June 30, 2014 and
2013.
|
Rentech, Inc.
|
|
(Stated in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
|
|
|
For the Six Months
|
|
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
(unaudited)
|
|
Operating Income1
|
|
|
|
|
$
|
15,154
|
|
|
$
|
36,678
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
15,149
|
|
|
|
10,593
|
|
Adjusted EBITDA1
|
|
|
|
|
$
|
30,303
|
|
|
$
|
47,271
|
1Excludes the impact of the expected impairment of goodwill
related to the Pasadena facility.
The table below reconciles Rentech Nitrogen’s consolidated Adjusted
EBITDA along with the Adjusted EBITDA for each of its facilities, a
non-GAAP financial measure, to their respective operating income (loss)1
for the three months ended June 30, 2014.
|
|
|
|
For the Three Months Ended June 30, 2014
|
|
(Stated in thousands, except per unit data)
|
|
|
East Dubuque
Facility
|
|
|
Pasadena
Facility
|
|
|
Partnership
Level
|
|
|
Consolidated
|
|
|
|
|
(unaudited)
|
|
Operating income (loss)1
|
|
|
$
|
31,598
|
|
|
$
|
(6,317
|
)
|
|
|
$
|
(2,169
|
)
|
|
|
$
|
23,112
|
|
Plus: Depreciation and amortization
|
|
|
|
5,155
|
|
|
|
2,474
|
|
|
|
|
-
|
|
|
|
|
7,629
|
|
Adjusted EBITDA1
|
|
|
$
|
36,753
|
|
|
$
|
(3,843
|
)
|
|
|
$
|
(2,169
|
)
|
|
|
$
|
30,741
|
1Excludes the impact of the expected impairment of goodwill
related to the Pasadena facility.
The table below reconciles consolidated Adjusted EBITDA along with the
Adjusted EBITDA for each of its facilities to their respective operating
income (loss) for Rentech Nitrogen for the three months ended June 30,
2013.
|
|
|
|
For the Three Months Ended June 30, 2013
|
|
(Stated in thousands, except per unit data)
|
|
|
East Dubuque
Facility
|
|
|
Pasadena
Facility
|
|
|
Partnership
Level
|
|
|
Consolidated
|
|
|
|
|
(unaudited)
|
|
Operating income (loss)
|
|
|
$
|
36,370
|
|
|
$
|
138
|
|
|
$
|
(2,462
|
)
|
|
|
$
|
34,046
|
|
Plus: Depreciation and amortization
|
|
|
|
2,483
|
|
|
|
1,905
|
|
|
|
-
|
|
|
|
|
4,388
|
|
Adjusted EBITDA
|
|
|
$
|
38,853
|
|
|
$
|
2,043
|
|
|
$
|
(2,462
|
)
|
|
|
$
|
38,434
|
The table below reconciles consolidated Adjusted EBITDA along with the
Adjusted EBITDA for each of its facilities to their respective operating
income (loss)1 for Rentech Nitrogen for the six months ended
June 30, 2014.
|
|
|
|
For the Six Months Ended June 30, 2014
|
|
(Stated in thousands, except per unit data)
|
|
|
East Dubuque
Facility
|
|
|
Pasadena
Facility
|
|
|
Partnership
Level
|
|
|
Consolidated
|
|
|
|
|
(unaudited)
|
|
Operating income (loss)1
|
|
|
$
|
42,832
|
|
|
$
|
(7,076
|
)
|
|
|
$
|
(4,485
|
)
|
|
|
$
|
31,271
|
|
Plus: Depreciation and amortization
|
|
|
|
7,397
|
|
|
|
3,536
|
|
|
|
|
-
|
|
|
|
|
10,933
|
|
Adjusted EBITDA1
|
|
|
$
|
50,229
|
|
|
$
|
(3,540
|
)
|
|
|
$
|
(4,485
|
)
|
|
|
$
|
42,204
|
1Excludes the impact of the expected impairment of goodwill
related to the Pasadena facility.
The table below reconciles consolidated Adjusted EBITDA along with the
Adjusted EBITDA for each of its facilities to their respective operating
income (loss) for Rentech Nitrogen for the six months ended June 30,
2013.
|
|
|
|
For the Six Months Ended June 30, 2013
|
|
(Stated in thousands, except per unit data)
|
|
|
East Dubuque
Facility
|
|
|
Pasadena
Facility
|
|
|
Partnership
Level
|
|
|
Consolidated
|
|
|
|
|
(unaudited)
|
|
Operating income (loss)
|
|
|
$
|
53,683
|
|
|
$
|
1,994
|
|
|
$
|
(4,616
|
)
|
|
|
$
|
51,061
|
|
Plus: Depreciation and amortization
|
|
|
|
4,788
|
|
|
|
3,207
|
|
|
|
-
|
|
|
|
|
7,995
|
|
Adjusted EBITDA
|
|
|
$
|
58,471
|
|
|
$
|
5,201
|
|
|
$
|
(4,616
|
)
|
|
|
$
|
59,056
|
The table below reconciles Adjusted EBITDA to operating income (loss)
for Fulghum Fibres for the three months ended June 30, 2014 and 2013.
|
Fulghum's Adjusted EBITDA
|
|
(Stated in Thousands)
|
|
|
|
|
|
|
|
|
For the Three Months
|
|
|
For the Three Months
|
|
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
(unaudited)
|
|
Fulghum Operating Income (loss)
|
|
|
|
|
$
|
(583
|
)
|
|
|
$
|
845
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
2,732
|
|
|
|
|
2,275
|
|
Fulghum's Adjusted EBITDA
|
|
|
|
|
$
|
2,149
|
|
|
|
$
|
3,120
|
The table below reconciles Adjusted EBITDA to operating income for
Fulghum Fibres for the six months ended June 30, 2014 and 2013.
|
Fulghum's Adjusted EBITDA
|
|
(Stated in Thousands)
|
|
|
|
|
|
|
|
|
For the Six Months
|
|
|
For the Six Months
|
|
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
(unaudited)
|
|
Fulghum Operating Income
|
|
|
|
|
$
|
2,956
|
|
|
$
|
845
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
3,717
|
|
|
|
2,275
|
|
Fulghum's Adjusted EBITDA
|
|
|
|
|
$
|
6,673
|
|
|
$
|
3,120
|
The table below reconciles Adjusted EBITDA to net income for NEWP for
the three and six months ended June 30, 2014.
|
NEWP's Adjusted EBITDA
|
|
(Stated in Thousands)
|
|
|
|
|
|
|
|
|
For the Three Months
|
|
|
For the Six Months
|
|
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
(unaudited)
|
|
NEWP Net Income
|
|
|
|
|
$ 794
|
|
|
$ 794
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
180
|
|
|
180
|
|
NEWP's Adjusted EBITDA1
|
|
|
|
|
$ 974
|
|
|
$ 974
|
1In 2014, Rentech will recognize Adjusted EBITDA from the
date of the acquisition through December 31, 2014.
About Rentech, Inc.
Rentech, Inc. (NASDAQ: RTK) owns and operates wood fibre processing,
wood pellet production and nitrogen fertilizer manufacturing businesses.
Rentech offers a full range of integrated wood fibre services for
commercial and industrial customers around the world, including wood
chipping services, operations, marketing, trading and vessel loading,
through its subsidiary, Fulghum Fibres. The Company’s New England Wood
Pellet subsidiary is a leading producer of bagged wood pellets for the
U.S. heating market. Rentech manufactures and sells nitrogen fertilizer
through its publicly-traded subsidiary, Rentech Nitrogen Partners, L.P.
(NYSE: RNF). Please visit www.rentechinc.com
and www.rentechnitrogen.com
for more information.
Safe Harbor Statement
This press release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995 about matters such as:
an expected impairment of goodwill related to the Pasadena Facility; the
expected filing date of our quarterly report on Form 10-Q; our plans for
restructuring operations at the Pasadena facility; our forecasts for
2014; projected revenues and EBITDA for the wood fibre and nitrogen
businesses; our ability to complete the wood pellet mills on a timely
basis and on budget; the outlook for our wood processing and nitrogen
fertilizer businesses; and our ability to close on the sale of our
energy technologies business. These statements are based on management’s
current expectations and actual results may differ materially as a
result of various risks and uncertainties. Other factors that could
cause actual results to differ from those reflected in the
forward-looking statements are set forth in the Company’s prior press
releases and periodic public filings with the Securities and Exchange
Commission, which are available via Rentech’s website at www.rentechinc.com.
The forward-looking statements in this press release are made as of the
date of this press release and Rentech does not undertake to revise or
update these forward-looking statements, except to the extent that it is
required to do so under applicable law.
Copyright Business Wire 2014