Rentech Increases Forecast for Fertilizer Segment
April 05 2011 - 9:00AM
Business Wire
Rentech, Inc. (NYSE AMEX: RTK) today announced that it has
increased its projection of EBITDA for fiscal year 2011 for its
wholly-owned nitrogen fertilizer subsidiary, Rentech Energy Midwest
Corporation (REMC), to approximately $75 million, from the previous
projection of at least $60 million.
REMC, which is favorably located near its customers in the
corn-belt region, is benefiting from continuing strong fertilizer
demand and pricing as well as low input costs. As of March 31,
2011, REMC has delivered, or signed contracts with fixed prices for
the sale of, more than 75% of REMC's forecasted deliveries for the
fiscal year that will end September 30, and has already purchased
or contracted at fixed prices for the natural gas required to
produce that product. Because such a large portion of the year’s
projected contribution margin has been pre-contracted, Rentech is
confident in projecting record EBITDA at REMC of approximately $75
million for the fiscal year. Rentech has also increased its
projection of REMC’s operating income for fiscal year 2011 to
approximately $65 million from the previous forecast of at least
$50 million. Further explanation of EBITDA, a non-GAAP financial
measure, and a reconciliation of REMC's projected EBITDA to
operating income for fiscal year 2011 have been included below in
this press release.
D. Hunt Ramsbottom, President and CEO of Rentech, stated, "We
are pleased that REMC’s performance is exceeding our expectations.
The cash flow generated at our fertilizer facility helps support
our alternative energy business, providing investors with the
unique opportunity to invest in two very dynamic industries, both
of which have significant growth potential.”
Considering the positive market trends and higher margins for
nitrogen fertilizer that REMC has been experiencing, Rentech
engaged an engineering firm to evaluate the possibility of
expanding REMC’s production and increasing the efficiency of the
plant. The feasibility study is expected to take several months to
complete, after which Rentech will evaluate the attractiveness of
investing in capacity expansion at the plant to meet increased
nitrogen demand created by expanded corn acres for the foreseeable
future.
Disclosure Regarding Non-GAAP Financial Measures
EBITDA is a presentation of earnings before interest, taxes,
depreciation and amortization. Management believes that EBITDA (a
non-GAAP financial measure) can be a useful indicator of the
fundamental operating performance of REMC’s fertilizer production
facility. Management believes that EBITDA can help investors
evaluate REMC’s operating performance by eliminating the effects of
depreciation and amortization, which are non-cash expenses, and of
interest and taxes, which are not operating expenses. We believe
that our investors may use EBITDA as a measure of the operating
performance of REMC’s business. We recommend that investors
carefully review the GAAP financial information (including our
Statements of Cash Flows) included as part of our Annual Report on
Form 10-K, our Quarterly Reports on Form 10-Q, and our earnings
releases; compare GAAP financial information with the non-GAAP
financial measures disclosed in our quarterly earnings releases and
investor calls; and read the reconciliation below.
Fiscal Year 2011 REMC EBITDA Projection ($ millions)
Operating Income of approximately:
$ 65.4 Depreciation and Amortization
9.6 EBITDA of approximately: $ 75.0
About Rentech, Inc.
Rentech, Inc. (www.rentechinc.com), incorporated in 1981,
provides clean energy solutions. The Company's Rentech-SilvaGas
biomass gasification process can convert multiple biomass
feedstocks into synthesis gas (syngas) for production of renewable
fuels and power. Combining the gasification process with Rentech's
unique application of syngas conditioning and clean-up technology
and the patented Rentech Process based on Fischer-Tropsch
chemistry, Rentech offers an integrated solution for production of
synthetic fuels from biomass. The Rentech Process can also convert
syngas from fossil resources into ultra-clean synthetic jet and
diesel fuels, specialty waxes, and chemicals. Final product
upgrading and acid gas removal technologies are provided under an
alliance with UOP, a Honeywell company. Rentech develops projects
and offers licenses for these technologies for application in
synthetic fuels and power facilities worldwide. Rentech Energy
Midwest Corporation, the Company's wholly-owned subsidiary,
manufactures and sells nitrogen fertilizer products including
ammonia, urea ammonia nitrate, urea granule, and urea solution in
the corn-belt region of the central United States.
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 demand, pricing and outlook for REMC’s
products, projected EBIT and EBITDA performances at REMC and growth
potential and demand for the nitrogen fertilizer and alternative
energy industries. 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 web site 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. (NASDAQ:RTK)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rentech, Inc. (NASDAQ:RTK)
Historical Stock Chart
From Jul 2023 to Jul 2024