Rentech, Inc. (NASDAQ: RTK) today announced financial and
operating results for the three months and year ended December 31,
2014.
Keith Forman, President and CEO of Rentech, stated, “2014 was a
disappointing year on many fronts, with a number of our businesses
and projects underperforming. Our goals for this year are clear: to
operate our assets safely; to reduce our net losses; ramp up
production at the Canadian pellet plants; to develop a backlog of
fibre growth opportunities; and manage costs and improve profits at
Fulghum Fibres. We also intend to improve our liquidity, simplify
our capital structure, and reduce our overhead costs on a going
forward basis.”
Summary of Results
The results of Rentech, Inc. and its subsidiaries include 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), New England Wood Pellet (NEWP), and Wood Pellets:
Industrial, which includes our Canadian pellet plants, wood fibre
processing business development activities, and general and
administrative expenses related to these operations. Rentech owns
the general partner and approximately 60% of the limited partner
interests of Rentech Nitrogen. Rentech Nitrogen’s results include
two operating segments: the East Dubuque, Illinois facility and the
Pasadena, Texas facility.
Results of operations include Fulghum since May 1, 2013, and
NEWP since May 1, 2014, which were their dates of acquisition.
Several negative factors affected our operating results and
liquidity in 2014. At Rentech Nitrogen, volumes were lower than
expected due to unplanned downtime at the East Dubuque facility and
a decision to restrict output and sales from the Pasadena facility
in order to improve the profitability of that facility. Lower
product prices contributed to lower gross profits at both
facilities and compressed dollar margins at Pasadena compared to
those realized in 2013. A fire at a chip mill in Maine operated by
Fulghum interrupted operations, causing lost revenue and
significant unplanned operating expenses. Also at Fulghum,
unplanned downtime at several of our customers' mills and higher
labor and maintenance expenses led to lower profits. Our wood
pellet projects in Canada are behind schedule and are significantly
exceeding original construction cost estimates. The combined
effects on cash flow of higher capital expenditures and the delay
in expected cash flow from those projects created liquidity
challenges that were addressed by a new loan facility from funds
managed by or affiliated with GSO Capital Partners. We successfully
sold our former energy technologies business, but incurred
unexpected expenses as that sale closed six months later than
expected. Our corporate expenses increased primarily as a result of
transaction fees related to our acquisition of NEWP, cost studies,
settlements with shareholders, and higher information technology
costs and accounting fees.
Three months ended December 31,
2014
Consolidated revenues for the fourth quarter of
2014 were $122.6 million, compared to $79.1
million in the prior year period. These revenues were
comprised of:
- $28.2 million from Fulghum, an
increase of $3.7 million from the prior year period;
- $12.5 million from NEWP;
- $1.4 million from Wood Pellets:
Industrial; and
- $80.6 million from Rentech
Nitrogen, an increase of $26.0 million from the prior
year period.
Gross profit for the fourth quarter of 2014 was $17.4
million, compared to gross loss of $2.8 million in the
prior year period. Gross profit was comprised of:
- $2.9 million from Fulghum, a
decrease of $2.4 million from the prior year period;
- $2.5 million from NEWP;
- $0.2 million from Wood Pellets:
Industrial; and
- $11.8 million from Rentech Nitrogen, an
increase of $19.8 million from the prior year period.
Consolidated Adjusted EBITDA for the fourth quarter of
2014 was $4.9 million, an improvement of $24.6
million compared to the prior year period. Consolidated
Adjusted EBITDA included the following:
- $2.8 million from Fulghum, a
decrease of $1.8 million from the prior year period;
- $2.7 million from NEWP;
- ($4.5) million from Wood Pellets:
Industrial; and
- $13.4 million from Rentech Nitrogen, an
increase of $22.1 million from the prior year period.
Further explanation of Adjusted EBITDA, a non-GAAP financial
measure, as used here and throughout this press release, appears
below.
Net income attributable to Rentech common shareholders for the
fourth quarter of 2014 was $3.5
million, or $0.01 per basic share, compared to a net
loss of $14.5 million, or a loss of $0.06 per basic
share, for the same period last year.
Net loss for the fourth quarter of 2014 was $13.3
million, or a loss of $0.06 per basic share,
excluding dividends and accretion on preferred stock, gain on sale
of energy technologies assets, the Agrifos settlement, gain on fair
value adjustment to earn-out consideration and income tax expense.
Net loss for the fourth quarter of 2013 was $20.4 million, or a
loss of $0.09 per share, excluding the gain on sale of Natchez,
fair value adjustment to earn-out consideration and income tax
expense.
Fulghum Fibres
Revenues were $28.2 million for the fourth quarter of
2014, compared to $24.5 million for the same period last
year. The increase was primarily due to higher chip and bark sales
in South America.
Revenues from operations in the United States were $14.4 million
for the fourth quarter of 2014, as compared to $15.3 million in the
prior year period. Revenues from operations in South America were
$13.8 million for the fourth quarter of 2014, as compared to $9.2
million in the prior year period.
Mills in the United States processed 3.1 million green
metric tons, or GMT, of logs into wood chips and residual fuels in
the fourth quarter of both 2014 and 2013. Mills in South
America processed 0.7 million GMT of logs into wood chips and
residual fuels in the fourth quarter of both 2014 and 2013.
Gross profit was $2.9 million for the fourth quarter of 2014,
compared to $5.3 million for the same period last year. Gross
profit margin for the fourth quarter of 2014 was 10%, compared to
22% for the prior year period.
Adjusted EBITDA for the fourth quarter of 2014 was $2.8
million. This compares to Adjusted EBITDA of $4.7 million for
the same period in 2013. Adjusted EBITDA was lower due to lower
margins on South American chip exports.
Net loss was $0.5 million for the fourth quarter of 2014,
compared to net income of $6.0 million for the same period
last year.
New England Wood Pellet
Revenues were $12.5 million, earned by delivering 65,000 tons of
wood pellets. Demand continued to be strong from NEWP’s customers
during the quarter. Gross profit was $2.5 million and gross profit
margin was 20%. Adjusted EBITDA was $2.7 million, and net income
was $1.6 million.
Wood Pellets:
Industrial
Revenues were $1.4 million for the Atikokan
Project, earned by delivering to Ontario Power Generation (OPG)
7,300 metric tons of pellets sourced from a third party. Gross
profit was $0.2 million and gross profit margin was 16%.
Adjusted EBITDA loss was $4.5 million and net loss
was $4.8 million.
Nitrogen Product
Manufacturing
Revenues for the fourth quarter of 2014 were $80.6 million,
compared to $54.6 million for the prior year period.
Gross profit for the fourth quarter of 2014 was $11.8 million,
compared to a gross loss of $8.0 million for the same
period last year. Adjusted EBITDA for the fourth quarter of
2014 was $13.4 million. This compares to an Adjusted
EBITDA loss of $8.6 million in the corresponding 2013 period.
Rentech Nitrogen recognized income from the Agrifos settlement of
$5.6 million in the fourth quarter of 2014.
Net income for the fourth quarter of 2014 was $7.8
million, or $2.2 million excluding the loss allocated to unvested
units and the Agrifos settlement. This compares to a net loss
of $17.4 million for the prior year period.
East Dubuque Facility
Revenues for the fourth quarter of 2014 were $47.9
million, compared to $30.9 million for the same period
last year. Higher ammonia sales volume contributed to this
increase, partially offset by lower natural gas sales and lower
ammonia sales prices. A scheduled turnaround and a fire in the
fourth quarter of 2013 lowered production volumes in the prior year
period.
Average sales prices per ton for the fourth quarter of
2014 were 4% lower for ammonia and relatively flat for UAN, as
compared with the same period last year. These two products
comprised 84% of the East Dubuque facility’s revenues for the
fourth quarter of 2014 and 78% for the same period last year.
Gross profit was $14.0 million for the fourth quarter
of 2014; this compares to a gross loss of $0.5
million for the same period last year. Gross profit margin for
the fourth quarter of 2014 was 29%, compared to a gross loss
margin of 2% for the same period last year. Gross profit and margin
for 2013 were negatively impacted by turnaround expenses totaling
$7.8 million, fixed operating costs of $4.3 million while the East
Dubuque plant was idle, and a $1.0 million deductible under our
property insurance policy related to the 2013 fire. Gross profit
for 2014 increased despite an increase in depreciation (included in
cost of sales) and increased costs of natural gas and electricity.
Natural gas costs reflected higher natural gas prices, increases in
sales volumes and a loss on natural gas derivatives of $3.1
million, partially offset by a $2.5 million decline in the cost of
natural gas sold. The increase in depreciation expense was
primarily due to the completion of the ammonia expansion project in
late 2013. Increased electricity costs reflected higher rates and
usage, due in part to the new equipment installed as part of the
ammonia expansion project.
Adjusted EBITDA for the fourth quarter of 2014 was $17.0
million, compared to $0.3 million in the corresponding period
in 2013.
Net income was $12.9 million for the fourth quarter of
2014, compared to a net loss of $2.1 million for the same
period last year.
Pasadena Facility
Revenues for the fourth quarter of 2014 were $32.6
million, compared to $23.7 million for the same period
last year. Higher sales volumes for ammonium sulfate and sulfuric
acid and higher sales prices of ammonium sulfate contributed to the
increase. Sales volume for ammonium sulfate increased as we gained
market share and demand grew. Sales volume of sulfuric acid in 2014
benefited from higher production compared to 2013, when unplanned
outages reduced production.
Average sales prices per ton increased for ammonium sulfate by
21% and remained relatively flat for sulfuric acid for the fourth
quarter of 2014, as compared with the same period last year.
Factors contributing to higher sales prices for ammonium sulfate
include a larger proportion of higher-priced domestic sales and
more favorable supply and demand conditions. Ammonium sulfate and
sulfuric acid comprised 87% of the Pasadena facility’s
revenues for the fourth quarter of 2014 and 68% for the same
period last year.
Gross loss was $2.2 million for the fourth quarter of
2014, compared to a gross loss of $7.6 million for the
same period last year. Gross loss margin for the fourth quarter of
2014 was 7% compared to a gross loss margin of 32% for the
same period last year. Increases of volumes, by 16% for ammonium
sulfate and 76% for sulfuric acid, drove improvements in
margins.
Adjusted EBITDA loss for the fourth quarter of 2014
was $1.1 million, compared to $7.5 million in the
corresponding period in 2013.
Net loss was $3.4 million for the fourth quarter 2014,
compared to $9.4 million for the same period last
year.
Corporate Unallocated
Expenses
Corporate unallocated expenses, which are included in selling,
general and administrative (SG&A) expenses, were $6.5 million
for the fourth quarter of 2014, compared to $6.1 million in the
corresponding period in 2013. The increase was primarily due to
severance costs.
Year ended December 31,
2014
Consolidated revenues were $472.7 million for 2014, compared to
$374.3 million for 2013. These revenues were comprised of:
- $101.8 million from Fulghum, an
increase of $38.9 million from 2013;
- $32.1 million from NEWP;
- $4.1 million from Wood Pellets:
Industrial; and
- $334.6 million from Rentech Nitrogen,
an increase of $23.2 million from 2013.
Gross profit was $79.7 million, compared to $83.4 million in
2013. Gross profit was comprised of:
- $12.4 million from Fulghum, an increase
of $0.4 million from 2013;
- $6.1 million from NEWP;
- $0.7 million Wood Pellets: Industrial;
and
- $60.5 million from Rentech Nitrogen, a
decrease of $10.9 million from 2013.
Consolidated Adjusted EBITDA was $37.2 million, compared to
$35.9 million in 2013. Consolidated Adjusted EBITDA included the
following:
- $13.4 million from Fulghum, an increase
of $0.3 million from 2013;
- $6.4 million from NEWP;
- ($11.8) million Wood Pellets:
Industrial; and
- $64.7 million from Rentech Nitrogen, a
decrease of $1.8 million from 2013.
Net loss attributable to Rentech common shareholders for 2014
was $35.9 million, or a loss of $0.16 per basic share. This
compares to a net loss of $1.5 million, or a loss of $0.01 per
basic share, for 2013.
Net loss for 2014 was $34.9 million, or a loss
of $0.16 per basic share, excluding dividends and
accretion on preferred stock, the Pasadena goodwill impairment,
gain on sale of energy technologies assets, the Agrifos settlement,
fair value adjustment to earn-out consideration, and income tax
expense. This compares to net loss of $19.3 million, or a loss of
$0.09 per basic share, for 2013, excluding the Pasadena goodwill
impairment, gain on sale of Natchez, fair value adjustment to
earn-out consideration, and income tax benefit.
Fulghum Fibres
Revenues for 2014 were $101.8 million, compared to $63.0 million
for 2013. The increase was due to our ownership of Fulghum for the
full year in 2014, compared to eight months in 2013. For 2014,
United States operations generated $59.0 million of revenues, while
South America recorded $42.8 million of revenues. For 2013, United
States operations generated $40.7 million of revenues, while South
America recorded $22.3 million of revenues. During 2014, our mills
in the United States processed 12.6 million GMT of logs into
wood chips and residual fuels; our mills in South America processed
2.3 million GMT of logs. During 2013, our mills in the United
States processed 8.4 million GMT of logs into wood chips and
residual fuels; our mills in South America processed
1.5 million GMT of logs.
While revenues increased from 2013 due to our ownership of
Fulghum for the full year in 2014, revenues were lower than
expected in 2014 due to a number of issues. During 2014, service
revenues at our mill in Maine were lower due to downtime and
constraints resulting from conducting operations with temporary
equipment following a fire that occurred in the first quarter. In
addition, revenues for the sale of wood chips and biomass in South
America were lower than expected due primarily to lower sales
prices and reduced demand from customers.
Gross profit was $12.4 million for 2014, compared to $12.0
million for 2013. Gross profit margin for 2014 was 12%, compared to
19% for 2013. The decrease in gross profit margin was primarily due
to losses associated with the fire at our mill in Maine, increased
labor and maintenance costs at various other U.S. mills, and lower
margins on South American chip exports. Our losses related to the
fire in Maine, which reflect lost revenues and increased operating
costs associated with interim chip processing during
reconstruction, totaled approximately $1.0 million in 2014.
Adjusted EBITDA for 2014 was $13.4 million, up from $13.0
million for 2013. Net income was $0.1 million for 2014, compared to
$7.0 million for 2013.
New England Wood Pellet
NEWP’s revenues were $32.1 million from May 1, 2014 through
December 31, 2014, generated by delivering 165,000 tons of wood
pellets. Gross profit was $6.1 million and gross profit margin was
19%. Adjusted EBITDA was $6.4 million and net income was $4.3
million.
Wood Pellets: Industrial
Revenues were $4.1 million at the Atikokan facility for 2014,
earned by delivering to OPG 21,000 metric tons of wood pellets
sourced from a third-party wood pellet producer. Gross profit was
$0.7 million and gross profit margin was 17%. Adjusted EBITDA was a
loss of $11.8 million and net loss was $11.6 million.
Nitrogen Products
Manufacturing
Revenues for 2014 were $334.6 million, compared
to $311.4 million for 2013. Gross profit for
2014 was $60.5 million, compared to $71.4 million in
2013. Adjusted EBITDA for 2014 was $64.7 million,
compared to $66.5 million for 2013. Rentech Nitrogen
recognized income from the Agrifos settlement of $5.6 million in
2014.
Net loss for 2014 was $1.1 million, compared to net
income of $4.1 million for 2013. Net income was $21.1
million for 2014, excluding the loss allocated to unvested
units, Pasadena goodwill impairment, loss on debt
extinguishment and the Agrifos settlement. This compares
to $35.5 million for 2013, excluding the income allocated to
unvested units, Pasadena goodwill impairment, loss on debt
extinguishment and gain on fair value adjustment to earn-out
consideration.
East Dubuque Facility
Revenues for 2014 were $196.4 million, compared to $177.7
million for 2013. The increase was due to higher sales volumes for
ammonia and urea and higher natural gas sales, partially offset by
lower sales prices for ammonia, UAN and urea.
Ammonia production capacity increased 23% after we completed the
ammonia expansion project in December 2013. This additional ammonia
available for sale enabled higher ammonia deliveries in 2014.
During the fourth quarter of 2013, production was interrupted due
to a planned turnaround and a subsequent fire, which resulted in
lower amounts of ammonia available for sale in 2013. Urea sales
increased during 2014 due to higher sales of DEF and granular
urea.
Average sales prices per ton for 2014 were 16% lower for ammonia
and 5% lower for UAN, compared to 2013. These two products
comprised 81% of revenues for 2014 and 82% for 2013. The decreases
in our sales prices for ammonia and UAN were consistent with the
decline in global nitrogen fertilizer prices in the earlier
portions of the respective years, partially offset by increases in
the latter portions of the respective years. 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 $74.8 million for 2014, compared to $80.9
million for 2013. Gross profit margin was 38% for 2014, compared to
46% for 2013. The decreases in gross profit and gross margin were
primarily due to lower product pricing and increased costs of
natural gas, depreciation and electricity. Gross profit was also
negatively impacted by 17 days of unplanned downtime, which reduced
the amount of product available for sale.
Adjusted EBITDA for 2014 was $85.8 million, compared to $84.5
million for 2013.
Net income was $69.8 million for 2014, compared to $75.2 million
for 2013.
Pasadena Facility
Revenues for 2014 were $138.2 million, compared to $133.7
million for 2013. The increase was due to higher sales volumes for
ammonium sulfate, partially offset by lower sales volumes for
sulfuric acid and lower sales prices for ammonium sulfate and
sulfuric acid.
Ammonium sulfate production increased after we completed the
debottlenecking project in December 2013. Also, demand increased
due to favorable weather during the planting season and an increase
in international orders. After expanding ammonium sulfate
production capacity, less sulfuric acid was available for sale,
causing a decline in sulfuric acid sales volume during 2014. In
October of 2014, we initiated a plan to reduce production and
costs, and increase profitability at the Pasadena facility.
Average sales prices per ton decreased by 19% for ammonium
sulfate and 6% for sulfuric acid in 2014, compared to 2013. These
two products comprised 91% of revenues for 2014 and 90% for 2013. A
higher proportion of export sales, priced lower than domestic
sales, contributed to the decline in average product prices.
Furthermore, higher exports of ammonium sulfate from China put
downward pressure on prices. The additional supplies from China
originated from new plants that produce ammonium sulfate as a
by-product of manufacturing caprolactam.
Gross loss was $14.3 million for 2014, compared to gross loss of
$9.5 million for 2013. Gross loss margin for 2014 was 10%, compared
to gross loss margin of 7% for 2013. The decreases in gross profit
and gross profit margin were primarily due to declines in average
sales prices for ammonium sulfate, increases in the unit prices of
raw materials, turnaround expenses and other unplanned maintenance
expenses.
Adjusted EBITDA loss for 2014 was $12.4 million, compared to
$10.1 million for 2013.
Net loss was $47.9 million for 2014, compared to $48.4 million
in 2013. Net loss excluding goodwill impairment was $20.7 million
for 2014, compared to $18.3 million in 2013.
Corporate Unallocated
Expenses
Corporate unallocated expenses included in SG&A were $28.0
million for 2014, compared to $24.8 million for 2013. Adjusted cash
SG&A was $17.5 million for 2014, compared to $16.1 million for
2013. The increase in adjusted cash SG&A is due to a $1.2
million increase in tax, audit and accounting services fees and
$0.7 million in IT related costs primarily associated with an
Oracle system upgrade, partially offset by a $0.5 million decrease
in personnel costs.
The table below provides a comparison of corporate unallocated
expenses for 2013 and 2014 and projected corporate unallocated
expenses for 2015.
For the Year Ending December 31, ($ in
millions) 2013 2014
2015F
Unallocated SG&A (1) $
24.8
$
28.0
$
24.0
Non-Cash Compensation
(5.9
)
(5.5
)
(6.0
)
Transaction Costs & Cost Studies (2)
(2.8
)
(5.0
)
-
Allocation to Wood Pellets: Industrial
- -
(5.0
)
Adjusted Unallocated Cash SG&A $
16.1
$
17.5
$
13.0
(1) $5 million of corporate allocations to Wood Pellets:
Industrial SG&A have been added back to unallocated SG&A in
2015 for comparative purposes.(2) Includes costs associated with
evaluating and completing acquisitions, evaluating shareholder
proposals, completing settlements with shareholders and conducting
cost studies.
2015 Outlook
Rentech provided the following guidance for cash SG&A
expenses for 2015, excluding Rentech Nitrogen (RNF):
($ in millions)
2015F
Canadian Pellet Plants $ 4 Wood Pellets: Industrial 11
Total Wood Pellets: Industrial SG&A $ 15
Fulghum Fibres 6 NEWP 3
Total Wood Fibre
Processing SG&A $ 24 Energy
Technologies 1 Unallocated Corp Cash SG&A 13
RTK ex.
RNF Pro Forma Cash SG&A $ 38 Non-Cash
Unallocated Corp 6
Total RTK ex. RNF SG&A
$ 44
In 2015, Rentech expects to allocate $5 million of expenses to
the Wood Pellets: Industrial business segment for the costs of
services from Rentech for executive, legal, finance, accounting,
human resources, information technology and investor relations
support; certain overhead; and information technology project
costs.
Rentech expects Adjusted EBITDA for Fulghum to be $16 to $17
million in 2015. Rentech expects NEWP to generate EBITDA of $9 to
$10 million in 2015, which includes contributions from the recently
acquired Allegheny plant. Rentech does not expect the Canadian wood
pellet plants to generate positive EBITDA or cash flow for the year
2015.
Liquidity
Rentech increased the amount available under its credit facility
with GSO Capital by up to $63 million on February 17, 2015, and
drew $25 million of the amount available. Rentech expects to fully
draw on the $45 million tranche of the credit facility this year to
fund completion of our Canadian wood pellet projects and their
operations until they generate positive cash flow. Rentech may
utilize the remaining commitment of the GSO loan, up to $18
million, in the event of certain unplanned downtime at the East
Dubuque facility, or unfavorable changes in commodity prices that
affect cash distributions from Rentech Nitrogen Partners.
Conference Call with
Management
The Company will hold a conference call today, March 17, 2015,
at 8:30 a.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 11:00 a.m. PDT on March 17
through 11:59 a.m. PDT on March 24. The replay teleconference will
be available by dialing 888-843-7419 or 630-652-3042 and entering
the audience passcode 7750504#.
Rentech, Inc.
Consolidated Statements of Operations (Amounts in Thousands,
Except per Share Data)
For the Three Months For
the Year Ended December 31, Ended December 31,
2014 2013 2014 2013 (unaudited)
Revenues $ 122,636 $ 79,067 $ 472,661 $ 374,349
Cost of Sales 105,265 81,817
392,987 290,963
Gross Profit
(Loss) 17,371 (2,750 ) 79,674 83,386
Operating
Expenses Selling, general and administrative expenses 18,137
12,548 66,901 51,367 Depreciation and amortization 1,908 (2,342 )
4,396 2,991 Pasadena goodwill impairment - - 27,202 30,029 Loss on
sale of assets 36 843 245
878
Total Operating Expenses
20,081 11,049 98,744
85,265
Operating Loss (2,710 ) (13,799 )
(19,070 ) (1,879 )
Other Income (Expense), Net
Interest expense (5,652 ) (5,363 ) (22,334 ) (16,385 ) Agrifos
settlement 5,632 - 5,632 - Loss on debt extinguishment - - (1,485 )
(6,001 ) Gain (loss) on fair value adjustment to earn-out
consideration (765 ) (75 ) (1,033 ) 5,122 Other income (expense),
net 67 (10 ) 422 (277 )
Total Other Expense, Net (718 ) (5,448
) (18,798 ) (17,541 )
Loss from Continuing
Operations Before Income Taxes and Equity in Loss of Investee
(3,428 ) (19,247 ) (37,868 ) (19,420 ) Income tax (benefit) expense
242 350 1,502
(26,306 )
Income (Loss) from Continuing Operations Before
Equity in Loss of Investee (3,670 ) (19,597 ) (39,370 ) 6,886
Equity in Loss of Investee 59 104
393 242
Income (Loss) from
Continuing Operations (3,729 ) (19,701 ) (39,763 ) 6,644 Income
(loss) from discontinued operations, net of tax 11,539
(1,775 ) 7,259 (6,606 )
Net Income (Loss) 7,810 (21,476 ) (32,504 ) 38 Preferred
Stock Dividends (1,319 ) - (3,840 ) - Net (income) loss
attributable to noncontrolling interests (3,011 )
6,945 494 (1,570 )
Net Income
(Loss) Attributable to Rentech Common Shareholders $ 3,480
$ (14,531 ) $ (35,850 ) $ (1,532 )
Net Income
(Loss) per Common Share Allocated to Rentech Common
Shareholders: Basic: Continuing operations $ (0.04 ) $
(0.06 ) $ (0.19 ) $ 0.02 Discontinued operations $
0.05 $ (0.01 ) $ 0.03 $ (0.03 )
Net Income
(Loss) $ 0.01 $ (0.06 ) $ (0.16 ) $ (0.01 )
Diluted: Continuing operations $ (0.03 ) $ (0.06 ) $ (0.19 )
$ 0.02 Discontinued operations $ 0.05 $ (0.01
) $ 0.03 $ (0.03 )
Net Income (Loss) $ 0.01
$ (0.06 ) $ (0.16 ) $ (0.01 )
Weighted-Average
Shares Used to Compute Net Income (Loss) per Common Share:
Basic 228,730 227,026
228,560 226,139
Diluted
237,229 227,026 228,560
233,703
Rentech, Inc. Statements of Operation by Business
Segment (Stated in Thousands)
For the Three
Months For the Year Ended December 31, Ended
December 31, 2014 2013 2014 2013
(unaudited) Revenues East Dubuque $ 47,924 $ 30,862 $ 196,379 $
177,700 Pasadena 32,636 23,714 138,233 133,675 Fulghum Fibres
28,189 24,491 101,849 62,974 Wood Pellets: Industrial 1,408
-
4,086
-
Wood Pellets: NEWP 12,479
-
32,114
-
Total Revenues $ 122,636 $ 79,067 $
472,661 $ 374,349 Gross Profit (Loss) East
Dubuque $ 13,969 $ (470 ) $ 74,785 $ 80,883 Pasadena (2,163 )
(7,563 ) (14,308 ) (9,529 ) Fulghum Fibres 2,865 5,283 12,444
12,032 Wood Pellets: Industrial 223
-
703
-
Wood Pellets: NEWP 2,477
-
6,050
-
Total Segment Gross Profit (Loss) $ 17,371 $
(2,750 ) $ 79,674 $ 83,386 Selling, General
and Administrative Expenses East Dubuque $ 988 $ 1,153 $ 4,165 $
4,576 Pasadena 931 953 5,078 4,764 Fulghum Fibres 1,979 1,645 6,399
3,754 Wood Pellets: Industrial 4,684 1,246 12,868 5,479 Wood
Pellets: NEWP 566
-
1,581
-
Total Segment Selling, General and Administrative
Expenses $ 9,148 $ 4,997 $ 30,091 $ 18,573
Depreciation and Amortization East Dubuque $ 72 $ 39
$ 194 $ 191 Pasadena 345 1,164 1,315 3,886 Fulghum Fibres 977
(3,692 ) 2,088 (1,708 ) Wood Pellets: Industrial 42 26 139 26 Wood
Pellets: NEWP 312
-
81
-
Total Segment Depreciation and Amortization Recorded in
Operating Expenses $ 1,748 $ (2,463 ) $ 3,817 $
2,395 Net Income (Loss) East Dubuque $ 12,877 $
(2,139 ) $ 69,803 $ 75,244 Pasadena (3,380 ) (9,442 ) (47,925 )
(48,357 ) Fulghum Fibres (534 ) 6,026 75 6,967 Wood Pellets:
Industrial (4,812 ) (1,239 ) (11,616 ) (5,180 ) Wood Pellets: NEWP
1,586
-
4,342
-
Total Segment Net Income (Loss) $ 5,737 $
(6,794 ) $ 14,679 $ 28,674
Reconciliation
of Segment Net Income (Loss) to Consolidated Net Income (Loss):
Segment net income (loss) $ 5,737 $ (6,794 ) $ 14,679 $ 28,674 RNF
– Partnership and unallocated expenses recorded as selling, general
and administrative expenses (2,491 ) (1,457 ) (8,768 ) (7,945 ) RNF
– Partnership and unallocated income (expense) recorded as other
income (expense) 5,435 — 4,800 (1,081 ) RNF – Unallocated interest
expense and loss on interest rate swaps (4,599 ) (4,370 ) (18,972 )
(14,096 ) RNF – Income tax benefit — 1 —
303 Corporate and unallocated expenses recorded as selling, general
and administrative expenses (6,499 ) (6,094 ) (28,043 ) (24,849 )
Corporate and unallocated depreciation and amortization expense
(160 ) (121 ) (579 ) (596 ) Corporate and unallocated income
(expense) recorded as other income (expense) (355 ) 38 (1,634 ) 19
Corporate and unallocated interest expense (2 ) (485 ) (380 ) (532
) Corporate income tax benefit (expense) (795 ) (419 ) (866 )
26,747 Income (loss) from Discontinued Operations, net of tax
11,539 (1,775 ) 7,259
(6,606 )
Consolidated Net Income (Loss) $ 7,810 $
(21,476 ) $ (32,504 ) $ 38
Rentech,
Inc. Selected Balance Sheet Data (Stated in Thousands)
As of December 31, (Stated in
Thousands)
2014 2013 (unaudited) Cash $ 44,195 $
106,369 Working capital 3,180 69,822 Construction in progress
179,423 60,136 Total assets 828,150 703,590 Total debt 468,856
421,979 Total Rentech stockholders' equity 120,733 158,073
Cash - RNF $ 28,028 $ 34,060 Cash excluding RNF 16,167
72,309
Total Cash $ 44,195 $ 106,369 Debt -
RNF $ 335,000 $ 320,000 Debt excluding RNF 133,856
101,979
Total Debt $ 468,856 $ 421,979
Disclosure Regarding Non-GAAP Financial
Measures
Adjusted EBITDA for Rentech, and Adjusted EBITDA for Rentech
Nitrogen are defined as net income (loss) plus net interest
expense, loss on debt extinguishment, income tax (benefit) expense,
depreciation and amortization, Pasadena goodwill impairment, fair
value adjustment to earn-out consideration, the Agrifos settlement,
gain on asset sales, and other adjustments. Adjusted EBITDA for
Fulghum and NEWP are defined as net income (loss) plus net interest
expense, income tax expense, and depreciation and amortization.
Cash SG&A expenses are defined as SG&A expenses less
non-cash compensation expenses.
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.
Net income (loss) excluding loss on goodwill impairment, loss on
debt extinguishment, loss on fair value adjustment to earn-out
consideration, income tax (benefit) expense, gain on asset sales,
the Agrifos settlement and dividends and accretion on preferred
stock are included to provide management and investors with net
income results for Rentech that are more easily compared to the
prior year period.
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 table below reconciles Rentech’s consolidated Adjusted
EBITDA from net income (loss) for the three months ended December
31, 2014 and 2013.
For the Three Months Ended December 31,
(Stated in thousands) 2014 2013
(unaudited)
Net Income (Loss) $ 7,810 $ (21,476 ) Add: Net
interest expense 5,643 5,360 Income tax (benefit) expense 242 65
Depreciation and amortization
10,711
2,514
Gain on sale of Natchez - (6,275 ) Gain on sale of alternative
energy assets (14,466 ) - Agrifos settlement (5,632 ) - Fair value
adjustment to earn-out consideration 765 75 Other (173 )
7
Adjusted EBITDA $
4,900
$
(19,730
)
The table below reconciles Rentech’s consolidated Adjusted
EBITDA from net income (loss) for 2014 and 2013.
For the Years Ended December 31, (Stated in
thousands) 2014 2013 (unaudited)
Net
Income (Loss) $ (32,504 ) $ 38 Add: Net interest expense 22,279
16,382 Income tax (benefit) expense 1,502 (26,591 ) Depreciation
and amortization
36,423
21,056
Pasadena goodwill impairment 27,202 30,029 Loss on debt
extinguishment 1,485 6,001 Gain on sale of Natchez - (6,275 ) Gain
on sale of alternative energy assets (14,466 ) - Agrifos settlement
(5,632 ) - Fair value adjustment to earn-out consideration 1,033
(5,122 ) Other (148 ) 412
Adjusted
EBITDA $
37,174
$
35,930
The table below reconciles Rentech Nitrogen’s Adjusted EBITDA,
along with the Adjusted EBITDA for each of its facilities, to their
respective net income (loss) for the three months ended December
31, 2014.
For the Three Months Ended December 31, 2014
East Dubuque Pasadena
Partnership
(Stated in thousands)
Facility Facility Level Consolidated
(unaudited) Net income (loss) $ 12,877 $ (3,380 ) $ (1,655 ) $
7,842 Plus: Net interest expense
21
-
4,599
4,620 Plus: Income tax expense - (64 ) - (64 ) Plus: Depreciation
and amortization 4,135 2,319 - 6,454 Plus: Agrifos settlement - -
(5,632 ) (5,632 ) Plus: Other - 5 197
202 Adjusted EBITDA $
17,033
$ (1,120 ) $
(2,491
) $ 13,422
The table below reconciles Rentech Nitrogen’s consolidated
Adjusted EBITDA, along with the Adjusted EBITDA for each of its
facilities, to their respective net income (loss) for 2014.
For the Year Ended December 31, 2014 East
Dubuque Pasadena Partnership
(Stated in thousands)
Facility Facility Level Consolidated
(unaudited) Net income (loss) $ 69,803 $ (47,925 ) $ (22,940 ) $
(1,062 ) Plus: Net interest expense
85
-
18,972
19,057 Plus: Income tax expense 1 17 - 18 Plus: Loss on debt
extinguishment - - 635 635 Plus: Pasadena goodwill impairment -
27,202 - 27,202 Plus: Depreciation and amortization 15,912 8,345 -
24,257 Plus: Agrifos settlement - - (5,632 ) (5,632 ) Plus: Other
- 5 197 202
Adjusted EBITDA $
85,801
$ (12,356 ) $
(8,768
) $ 64,677
The table below reconciles Rentech Nitrogen’s consolidated
Adjusted EBITDA, along with the Adjusted EBITDA for each of its
facilities, to their respective net loss for the three months ended
December 31, 2013.
For the Three Months Ended December 31, 2013
East Dubuque Pasadena
Partnership (Stated in thousands)
Facility Facility Level Consolidated
(unaudited) Net income (loss) $ (2,139 ) $ (9,442 ) $ (5,826 ) $
(17,407 ) Plus: Net interest expense - 2 4,371 4,373 Plus: Income
tax (benefit) expense (294 ) (240 ) - (534 ) Plus: Depreciation and
amortization 2,739 2,192 - 4,931 Less: Fair value adjustment to
earn-out consideration - - (1 )
(1 ) Adjusted EBITDA $ 306 $ (7,488 ) $ (1,456 ) $
(8,638 )
The table below reconciles Rentech Nitrogen’s consolidated
Adjusted EBITDA, along with the Adjusted EBITDA for each of its
facilities, to their respective net income (loss) for 2013.
For the Year Ended December 31, 2013 East
Dubuque Pasadena Partnership
(Stated in thousands) Facility Facility
Level Consolidated (unaudited) Net income (loss) $
75,244 $ (48,357 ) $ (22,819 ) $ 4,068 Plus: Net interest expense -
8 14,090 14,098 Plus: Pasadena goodwill impairment - 30,029 -
30,029 Plus: Loss on debt extinguishment - - 6,001 6,001 Plus: Loss
on interest rate swaps - - 7 7 Plus: Income tax (benefit) expense
66 141 (303 ) (96 ) Plus: Depreciation and amortization 9,239 8,073
- 17,312 Less: Fair value adjustment to earn-out consideration - -
(4,920 ) (4,920 ) Less: Other - - (1 )
(1 ) Adjusted EBITDA $ 84,549 $ (10,106 ) $ (7,945 ) $
66,498
The table below reconciles Fulghum’s Adjusted EBITDA to net
income (loss) for the three months ended December 31, 2014 and
2013.
For the Three Months Ended December 31,
(Stated in thousands) 2014 2013
(unaudited)
Fulghum Net Income $ (534 ) $ 6,026 Add Fulghum
Items: Net interest expense 916 529 Depreciation and amortization
2,965
(2,563 ) Income tax expense (466 ) 467 Other (36 )
235
Fulghum's Adjusted EBITDA $
2,845
$ 4,694
The table below reconciles Fulghum’s Adjusted EBITDA to net
income for 2014 and 2013.
For the Years Ended December 31, (Stated in
thousands) 2014 2013 (unaudited)
Fulghum Net Income $ 75 $ 6,967 Add Fulghum Items: Net
interest expense 2,578 1,755 Depreciation and amortization
9,462
3,128 Income tax expense 584 536 Other 682 656
Fulghum's Adjusted EBITDA $
13,381
$ 13,042
The table below reconciles NEWP’s Adjusted EBITDA to net income
for the three months and year ended December 31, 2014.
For the Three Months For the
Year Ended December 31, Ended December 31,
(Stated in thousands) 2014 2014 (unaudited)
NEWP Net Income $ 1,586 $ 4,342 Add NEWP Items: Net interest
expense 110 301 Depreciation and amortization
1,090
1,967
Income tax expense (24 ) 29 Other (72 ) (283 )
NEWP's Adjusted EBITDA $
2,690
$
6,356
The table below reconciles Wood Pellets: Industrial’s Adjusted
EBITDA to net loss for the three months and year ended December 31,
2014.
For the Three Months For the
Year Ended December 31, Ended December 31,
(Stated in thousands) 2014 2014 (unaudited)
Wood Pellets: Industrial Net Loss $ (4,812 ) $ (11,616 )
Add: Net interest income (3 ) (36 ) Depreciation and amortization
42 139 Income tax expense (1 ) 4 Other 320
(307 )
Wood Pellets: Industrial Adjusted
EBITDA
$ (4,454 ) $ (11,816 )
The table below reconciles net income attributable to Rentech
excluding dividends and accretion on preferred stock, gain on sale
of alternative energy assets, the Agrifos settlement, gain on fair
value adjustment to earn-out consideration and income tax expense
for the three months ended December 31, 2014. The table also
reconciles net loss attributable to Rentech excluding the gain on
sale of Natchez, gain on fair value adjustment to earn-out
consideration and income tax expense for the three months ended
December 31, 2013.
For the Three Months Ended December 31,
(Stated in thousands) 2014 2013 (unaudited)
Net income (loss) attributable to common
shareholders
$ 3,480 $ (14,531 ) Gain on sale of Natchez - (6,275 ) Gain
on sale of alternative energy assets (14,466 ) - Agrifos settlement
(3,368 ) - Fair value adjustment to earn-out consideration 765 75
Income tax (benefit) expense 242 350
Net loss attributable to common
shareholders excluding dividends and accretion on 2014 preferred
stock, gain on sale of Natchez and alternative energy assets, the
Agrifos settlement, fair value adjustment to earn-out consideration
and income tax (benefit) expense
$ (13,347 ) $ (20,381 )
Net income (loss) per share attributable
to common shareholders
$ 0.01 $ (0.06 )
Gain per share on sale of Natchez
expense
- (0.03 ) Gain per share on sale of alternative energy assets (0.06
) - Agrifos settlement per share (0.01 ) - Fair value adjustment to
earn-out consideration per share 0.00 0.00 Income tax (benefit)
expense per share 0.00 0.00
Net loss per share attributable to common
shareholders excluding items listed above
$ (0.06 ) $ (0.09 ) Weighted-Average Common Shares
Outstanding 228,730 227,026
The table below reconciles net loss attributable to Rentech
excluding dividends and accretion on preferred stock, the Pasadena
goodwill impairment, gain on sale of alternative energy assets, the
Agrifos settlement, loss on fair value adjustment to earn-out
consideration, and income tax expense for 2014. The table also
reconciles net loss attributable to Rentech excluding the Pasadena
goodwill impairment, gain on sale of Natchez, gain on fair value
adjustment to earn-out consideration, and income tax benefit for
2013.
For the Years Ended December 31, (Stated in
thousands) 2014 2013 (unaudited)
Net income (loss) attributable to common
shareholders
$ (35,850 ) $ (1,532 ) Pasadena goodwill impairment
16,267
17,957 Gain on sale of Natchez - (6,275 ) Gain on sale of
alternative energy assets (14,466 ) - Agrifos settlement
(3,368
) - Fair value adjustment to earn-out consideration 1,033 (3,144 )
Income tax (benefit) expense 1,502 (26,306 )
Net loss attributable to common
shareholders excluding dividends and accretion on 2014 preferred
stock, Pasadena goodwill impairment, gain on sale of Natchez and
alternative energy assets, the Agrifos settlement, fair value
adjustment to earn-out consideration and income tax (benefit)
expense
$
(34,882
) $ (19,300 )
Net income (loss) per share attributable
to common shareholders
$ (0.16 ) $ (0.01 ) Per share Pasadena goodwill impairment
0.07
0.08 Gain per share on sale of Natchez - (0.03 ) Gain per share on
sale of alternative energy assets (0.06 ) - Agrifos settlement per
share
(0.01
) - Fair value adjustment to earn-out consideration per share 0.00
(0.01 ) Per share income tax benefit 0.01
(0.12 )
Net loss per share attributable to common
shareholders excluding items listed above
$
(0.16
) $ (0.09 ) Weighted-Average Common Shares Outstanding
228,560 226,139
The table below reconciles net income attributable to Rentech
Nitrogen excluding the loss allocated to unvested units and the
Agrifos settlement for the three months ended December 31,
2014.
For the Three Months Ended (Stated in
thousands) December 31, 2014 (unaudited) Net income
attributable to common unit holders $ 7,842 (Loss) allocated
to unvested units (40 ) Agrifos settlement (5,632 )
Net income attributable to common unit
holders excluding loss allocated to unvested units and the Agrifos
settlement
$ 2,170
The table below reconciles net loss attributable to Rentech
Nitrogen excluding loss allocated to unvested units, Pasadena
goodwill impairment, loss on debt extinguishment and the Agrifos
settlement for 2014. The table also reconciles net income
attributable to Rentech Nitrogen excluding income allocated to
unvested units, Pasadena goodwill impairment, loss on debt
extinguishment and gain on fair value adjustment to earn-out
consideration for 2013.
For the Years Ended December 31, (Stated in
thousands) 2014 2013 (unaudited) Rentech
Nitrogen Net Income (Loss) $ (1,062) $ 4,068 Income (loss)
allocated to unvested units (60) 366
Pasadena goodwill impairment
27,202 30,029 Loss on debt extinguishment 635 6,001 Agrifos
settlement (5,632) - Fair value adjustment to earn-out
consideration - (4,920) Net income attributable to
common unit holders excluding Pasadena goodwill impairment, loss on
debt extinguishment, Agrifos settlement and fair value adjustment
to earn-out consideration $ 21,083 $ 35,544
The table below reconciles net loss attributable to the Pasadena
facility excluding goodwill impairment for 2014 and 2013.
For the Years Ended December 31, (Stated in
thousands) 2014 2013 (unaudited) Net loss
for Pasadena $ (47,925 ) $ (48,357 )
Pasadena goodwill impairment
27,202 30,029 Net loss for Pasadena
excluding goodwill impairment $ (20,723 ) $ (18,328 )
The table below reconciles NEWP’s and Fulghum’s respective
projected operating income to Adjusted EBITDA for the year ending
December 31, 2015.
For the Year Ending December 31, 2015
(Stated in millions) NEWP Fulghum
Operating income (loss) $ 5-6 $ 4-5 Plus:
Depreciation and amortization 4 12
Adjusted
EBITDA $ 9-10 $ 16-17
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: the timing for bringing our Canadian wood
pellet plants on line and their estimated costs and our outlook for
2015 including Rentech’s expected SG&A expenses, Adjusted
EBITDA for Fulghum and Adjusted EBITDA for NEWP for 2015. 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.
Rentech, Inc.Julie Dawoodjee Cafarella, 310-571-9800Vice
president of Investor Relations and Communicationsir@rentk.com
Rentech, Inc. (NASDAQ:RTK)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rentech, Inc. (NASDAQ:RTK)
Historical Stock Chart
From Jul 2023 to Jul 2024