Rentech, Inc. (NASDAQ: RTK) today announced financial and
operating results for the fourth quarter and full year ended
December 31, 2015.
Keith Forman, President and CEO of Rentech, stated, “I’m pleased
to report that two of our operating fibre businesses, Fulghum
Fibres and NEWP, generated record EBITDA in 2015. Rentech Nitrogen
also produced solid results for the year. We experienced
operational challenges in Canada last year; however, we continue to
make progress at our industrial wood pellet plants.”
Mr. Forman continued, “We shipped approximately 48,000 metric
tons of pellets to Drax in the first quarter of this year, produced
from the Wawa and Atikokan plants. We are preparing for the final
phase of corrections to the conveyors at both plants by this
summer. We are optimistic that these final conveyor replacements
will enable the plants to continue ramp-up to full capacity.”
Mr. Forman added, “With the recently announced sale of the
Pasadena facility, we are moving towards the imminent merger of
Rentech Nitrogen with CVR Partners. The closing of the merger will
enable us to reduce our obligations to GSO and to materially
improve our balance sheet. Rentech will soon be a pure play wood
fibre processing company with what we believe to be a manageable
capital structure.”
Summary of Results
The consolidated results of Rentech, Inc. include its
wood fibre processing business and Rentech Nitrogen’s Pasadena
facility. The wood fibre processing business consists of Fulghum
Fibres (Fulghum); New England Wood Pellet (NEWP); and Industrial
Wood Pellets, which includes our Canadian pellet plants, business
development for industrial pellets, senior management of the fibre
business and corporate allocations. Rentech Nitrogen’s East Dubuque
facility is classified as discontinued operations due to its
pending acquisition. Rentech’s energy technologies business is also
classified as discontinued operations due to its sale in October
2014. NEWP’s and Allegheny’s operations are included in our
operating results from May 1, 2014 and January 23,
2015, respectively, the closing dates of the acquisitions.
Consolidated revenues for the fourth quarter of
2015 were $68.9 million, compared to $73.9
million in the prior year period. Consolidated revenues for
2015 were $295.8 million, compared to $269.2 million in 2014.
Gross profit for the fourth quarter of 2015 was $3.7
million, compared to $3.4 million in the prior year period.
Gross profit for 2015 was $22.6 million, compared to $4.9 million
in 2014.
Consolidated Adjusted EBITDA for the fourth quarter of
2015 was $10.6 million, compared to $3.9 million in
the prior year period. Consolidated Adjusted EBITDA for 2015 was
$87.6 million, compared to $36.1 million in 2014. Further
explanation of Adjusted EBITDA, a non-GAAP financial measure, as
used here and throughout this press release, appears below.
Fulghum recorded asset impairment charges totaling $10.6 million
and $11.3 million in the fourth quarter and full year of 2015,
respectively. Rentech Nitrogen recorded asset impairment charges
for the Pasadena Facility of $26.3 million and $160.6 million in
the fourth quarter and full year of 2015, respectively. Rentech
Nitrogen recorded an impairment to goodwill for the Pasadena
Facility of $27.2 million in 2014. In the fourth quarter of 2014,
Rentech Nitrogen reached a $5.6 million settlement with Agrifos
relating to the Pasadena Facility.
Net loss attributable to Rentech common shareholders for the
fourth quarter of 2015 was $(37.2) million, or a
loss of $(1.62) per basic share, compared to net income
of $3.5 million, or $0.14 per basic share, for the same
period last year. Net loss attributable to Rentech common
shareholders for the fourth quarter of 2015 was $(10.9)
million, or a loss of $(0.48) per basic share, excluding
asset impairments. This compares to a net loss of $(14.3) million,
or a loss of $(0.61) per basic share, excluding the gain on sale of
alternative energy assets and the Agrifos settlement, for 2014.
Net loss attributable to Rentech common shareholders for
2015 was $(119.9) million, or a loss of $(5.22)
per basic share, compared to a net loss of $(35.9) million, or
a loss of $(1.57) per basic share, for 2014. Net loss
attributable to Rentech common shareholders for
2015 was $(12.8) million, or $(0.56) per basic
share, excluding the asset impairments. This compares to a net loss
of $(37.5) million, or a loss of $(1.64) per basic share, excluding
the Pasadena goodwill impairment, gain on sale of alternative
energy assets, and the Agrifos settlement, for 2014.
Fulghum Fibres
Revenues were $22.4 million for fourth quarter of 2015, compared
to $27.4 million for the same period last year. Revenues from
operations in the United States were $15.0 million for the fourth
quarter of 2015, as compared to $14.5 million in the prior
year period. Revenues from operations in South America were $7.4
million for the fourth quarter, as compared to $12.9 million
in the prior year period. The decline in revenues was largely due
to lower South American export and domestic chip sales, partially
offset by an increase in South American biomass sales.
Our mills in the United States and South America processed
3.2 and 3.8 million green metric tons, respectively, of logs
into wood chips and residual fuels for each of the fourth quarters
of 2015 and 2014.
Gross profit was $5.3 million for the fourth quarter of 2015,
compared to $2.9 million for the prior year period. Gross profit
margin for the fourth quarter of 2015 was 24%, compared to gross
profit margin of 10% for the prior year period. The increases in
gross profit and gross margin were due primarily to reductions in
operating costs at our processing mills in the United States as
well as decreased insurance costs. In addition, gross profits and
gross margins were lower in 2014 as a result of a fire at our Maine
mill in March of 2014.
Fulghum recorded impairments totaling $10.6 million in the
fourth quarter of 2015.
Adjusted EBITDA for the fourth quarter of 2015 was $6.8
million. This compares to Adjusted EBITDA of $2.8 million for
the same period in 2014.
Net loss was $(8.0) million for the fourth quarter of 2015.
Net income was $2.6 million, excluding asset impairments, for the
fourth quarter of 2015. This compares to a net loss of $(0.5)
million for the same period last year.
New England Wood Pellet
Revenues were $12.9 million for the fourth quarter of 2015 on
deliveries of 63,800 short tons of wood pellets. This compared to
$12.5 million for the fourth quarter of 2014 on deliveries of
65,400 short tons of wood pellets. The increase in revenues
reflects higher sales prices and the addition of the Allegheny
mill, partially offset by lower than anticipated sales in November
and December of 2015 due to a warm winter. The warm temperatures,
along with depressed prices for competitive heating fuels such as
heating oil and propane has continued into 2016. This is resulting
in lower sales volumes as NEWP’s customers are still carrying
inventory purchased in 2015 due to slow buying by retail customers.
Starting in February 2016, three of NEWP’s facilities scaled back
production days from seven days a week to five days a week, and one
facility scaled back its production days to four days a week.
Gross profit for the fourth quarter of 2015 was $3.2 million,
compared to $2.5 million for the same period last year. Gross
profit margin was 25% for the fourth quarter of 2015, compared to
20% for the prior year period. Gross profit and gross profit margin
were higher because of lower production costs, higher sales prices
and the addition of the Allegheny mill.
Adjusted EBITDA for the fourth quarter of 2015 was $3.2
million. This compares to Adjusted EBITDA of $2.7 million for
the same period in 2014.
Net income was $1.9 million for the fourth quarter of 2015,
compared to net income of $1.6 million for the same period
last year.
Wood Pellets: Industrial
Revenues for the fourth quarter of 2015 were $2.0 million earned
by delivering to Ontario Power Generation (OPG) 11,100 metric tons
of wood pellets produced at the Atikokan Facility. Revenues of $1.4
million for the prior year period reflect 7,300 metric tons of wood
pellets sourced from a third-party and sold to OPG.
Gross loss for the fourth quarter of 2015 was $(5.7) million,
compared to a gross profit of $0.2 million for prior year period.
Gross loss margin was (290%) for the fourth quarter of 2015,
compared to a gross profit margin of 16% for the prior year period.
The gross loss and gross loss margin for the fourth quarter of 2015
were due to high operating costs relative to revenues during
commissioning and ramp-up of the Atikokan and Wawa facilities, and
a write down of inventory by $5.7 million for pellets in inventory
awaiting delivery to Drax.
Adjusted EBITDA loss for the fourth quarter of 2015
was $(11.7) million. This compares to Adjusted EBITDA loss of
$(4.5) million for the same period last year.
Net loss was $(12.8) million for the fourth quarter of
2015, compared to a net loss of $(4.8) million for the same period
last year.
Pasadena Facility
Revenues for the fourth quarter of 2015 were $31.7 million,
compared to $32.6 million for the same period last year. The
decrease was primarily due to reduced demand for sulfuric acid and
lower priced ammonium sulfate and ammonium thiosulfate products
partially offset by additional sales volumes for each.
Average sales prices per ton decreased by 11% for ammonium
sulfate and were flat for sulfuric acid for the fourth quarter of
2015, as compared with the same period last year. These two
products comprised 89% of our Pasadena Facility’s revenues for the
fourth quarter of 2015 and 92% for the same period in the prior
year.
Gross profit was $0.8 million for the fourth quarter of 2015,
compared to a gross loss of $(2.2) million for the same period last
year. Gross profit margin for the fourth quarter of 2015 was 3%,
compared to gross loss margin of (7%) for the same period last
year. The improvement in gross profit and gross profit margin was
largely due to cost savings resulting from the restructuring
implemented in late 2014, and increased sales volumes of ammonium
sulfate and ammonium thiosulfate.
Adjusted EBITDA for the fourth quarter of 2015 was $0.3
million, compared to Adjusted EBITDA loss of $(1.1) million in
the corresponding period in 2014.
The Pasadena Facility incurred an asset impairment charge of
$26.3 million in the fourth quarter of 2015.
Net loss was $(26.7) million for the fourth quarter of
2015 or $(0.4) million excluding the loss due to the asset
impairment. Net loss was $(3.4) million for the fourth quarter
of 2014.
Corporate and Unallocated
Expenses
Corporate and unallocated expenses, which are included in
selling, general and administrative (SG&A) expenses, were $4.7
million for the fourth quarter of 2015, compared to $6.5 million in
the corresponding period in 2014.
The table below provides a comparison of adjusted unallocated
SG&A expenses for the fourth quarters of 2015 and 2014,
including certain adjustments for comparability.
For the Three Months Ended
December 31, (Stated in millions) 2015
2014
(unaudited)
Corporate and unallocated expenses recorded as SG&A expenses $
4.7 $ 6.5 Allocation to Wood Pellets: Industrial 0.9
— Unallocated SG&A expenses - Adjusted $ 5.6 $
6.5 Non-cash compensation (0.7 ) (0.8 ) Transaction costs &
cost studies (0.0 ) (0.7 ) Allocation to Wood Pellets: Industrial
(0.9 ) — Unallocated SG&A expenses -
Adjusted $ 4.0 5.0
Discontinued Operations
East Dubuque Facility
Revenues for the fourth quarter of 2015 were $45.7 million,
compared to $47.9 million for the same period in the prior year.
The decrease was primarily due to lower sales prices for all
nitrogen products. Ammonia sales volumes were essentially flat in
the fourth quarter of 2015 as compared to the prior year quarter,
but were lower than expectations due to limited spot sales caused
by an abbreviated fall application window resulting from a wet fall
followed by cold temperatures and snow. Prepaid UAN deliveries in
the fourth quarter of 2015 were lower than expectations in spite of
higher sales volumes as compared to the prior year.
Average sales prices per ton for the fourth quarter of 2015 were
11% lower for ammonia and 11% lower for UAN, as compared with the
same period last year. These two products comprised 85% of our East
Dubuque Facility’s revenues for the fourth quarter of 2015 and 84%
for the same period last year.
Gross profit was $17.1 million for the fourth quarter of 2015,
compared to $14.0 million for the same period in the prior year.
Gross profit margin was 37% for the fourth quarter of 2015,
compared to 29% for the same period in the prior year. The
increases in gross profit and gross margin were primarily due to
higher sales volumes for UAN and lower natural gas costs, partially
offset by lower sales prices for nitrogen products. Gross profit
margin, without natural gas derivatives, was 40% for the fourth
quarter of 2015, compared to 36% for the same period in the prior
year.
Adjusted EBITDA for the fourth quarter of 2015 was $20.5
million, compared to $17.0 million in the corresponding period
in 2014.
Net income was $15.8 million for the fourth quarter of
2015, compared to $12.9 million for the same period last
year.
Energy Technologies
Net loss was $(0.1) million for the fourth quarter of 2015,
compared to net income of $11.5 million for the same period last
year. The net income in 2014 was primarily due to a gain of $15.3
million from the sale of our alternative energy technologies.
Canadian Update
The capital expenditures estimate for the Atikokan and Wawa
plants of approximately $145 million is unchanged, with
approximately $21 million remaining to be spent as of the end of
2015. The estimate for capital expenditures does not include
contingency costs to address any other unforeseen issues that may
arise during ramp-up of the facilities.
In the first quarter of 2016, we completed two shipments of wood
pellets to Drax totaling approximately 48,000 metric tons produced
from our Wawa and Atikokan facilities. Our ability to continue to
fulfill the volume requirements under the Drax contract will
largely depend on the success of the next phase of material
handling equipment replacements at the plant and there being no new
significant issues during ramp-up. We shipped a total of
approximately 65,800 metric tons of wood pellets to OPG since
Atikokan began producing, which has to date satisfied our
contractual obligations to OPG.
All of the truck dump hopper modifications at Atikokan have been
completed, and the truck dump hopper is performing as expected. The
first group of the faulty conveyors at the Atikokan Facility was
replaced at the end of 2015 and the conveyors’ performance is
currently being evaluated as part of the plant’s operations. The
remaining work to address problems with the Atikokan Facility
conveyor systems is expected to continue through mid-2016. The
Atikokan Facility is expected to reach full capacity this year at
some point after the conveyor work is completed, barring any other
possible unforeseen issues that may arise during continued
ramp-up.
All of the equipment at the Wawa Facility has been commissioned
and the plant has been producing an increasing quantity of wood
pellets. However, as disclosed last year, we discovered during the
ramp-up of the Wawa Facility the need to modify the front-end
system of the facility that handles logs and feeds them into the
chipping process and to modify or replace a significant portion of
the plant’s conveyance systems. The modifications of the front-end
system and the first phase of modifications of the plant’s
conveyance systems were completed in late 2015. The remaining work
to the conveyor systems is scheduled to be completed by mid-2016.
In light of the setbacks we have experienced at the Wawa Facility,
we are evaluating the production capacity of the plant. We are
investigating whether there are potential design shortcomings
similar to those that surfaced with the plant’s wood infeed and
conveyance systems that might limit capacity. We are also
evaluating uptime and operating efficiency rates achievable for
full capacity. Our discussions with other pellet producers and
engineering firms over the past year have shown that there is a
wide disparity of these rates across established industrial pellet
manufacturing plants in North America. We believe it is premature
to revise the capacity of the Wawa Facility until such time that we
have fully tested the design assumptions of the major processes of
the plant, remediated all of the material handling issues, and
completed the ramp-up of the facility. However, if we apply a range
of assumed operating efficiencies typical for the industry, the
plant’s annual production capacity would be between 400,000 and
450,000 metric tons. The low end of this capacity range would still
allow us to fulfill our annual contractual obligations to Drax and
to generate positive cash flow. We have also observed that
historically within the wood pellet industry ramping to full design
capacities takes considerable time, several years in most cases.
Taking into account the amount of time required to complete the
repair and modification of the conveyance systems and to ramp up to
design operating efficiency rates as historically observed in the
wood pellet industry, we do not expect the Wawa Facility to reach
full capacity until 2017. We estimate that Atikokan and Wawa would
generate stabilized annual EBITDA in the range of CAD$13 - $16
million using the production range cited above and based on today’s
economic variables. The EBITDA estimate does not include revenues
from possible opportunities to aggregate pellets for resale.
Restructuring Update
We have completed significant actions on the restructuring front
since the second half of last year. The actions we have taken thus
far should result in annualized savings of approximately $5
million, which is approximately half of the targeted savings of $10
- $12 million we outlined last year. Of the targeted savings,
corporate SG&A cost savings would be approximately $8.5 - $10.5
million, including $3.8 million in savings of non-cash
compensation expenses1. We expect to complete the remainder of the
restructuring actions by the end of the third quarter of this
year.
We have accrued approximately $1.9 million through the end of
last year in one-time charges associated with restructuring actions
completed through 2015. We continue to expect total one-time costs
related to the restructuring actions to be approximately $6
million.
Conference Call with
Management
The Company will hold a conference call today, March 16, 2016,
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 6364776#. 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 16
through 11:59 a.m. PDT on March 23. The replay teleconference will
be available by dialing 888-843-7419 or 630-652-3042 and entering
the audience passcode 6364776#.
1 Reflects cost savings for unallocated SG&A expenses,
SG&A expense allocations to the wood fibre business and wood
fibre business development expenses and overhead.
Rentech, Inc. Consolidated Statements of
Operations
(Amounts in Thousands, Except per Share
Data)
For the Three Months
For the Years Ended Ended December 31,
December 31, 2015 2014
2015 2014 (unaudited)
Revenues $ 68,920 $ 73,945 $ 295,844 $ 269,181
Cost of
sales 65,217 70,543 273,197
264,292
Gross profit 3,703
3,402 22,647 4,889
Operating expenses Selling, general and administrative
expense 13,340 16,893 56,262 61,718 Depreciation and amortization
1,649 1,836 5,930 4,202 Asset impairment 36,891 — 171,878 —
Pasadena goodwill impairment — — — 27,202 Other (income) expense,
net 3,386 24 3,395
(293 ) Total operating expenses 55,266 18,753
237,465 92,829
Operating
loss (51,563 ) (15,351 ) (214,818 )
(87,940 )
Other expense, net Interest expense (3,508 )
(1,033 ) (10,746 ) (3,277 ) Loss on debt extinguishment — — — (850
)
Gain (loss) on fair value adjustment to
earn-out consideration
(265 ) (765 ) 230 (1,033 ) Other income, net 388
264 2,372 618 Total other
expenses, net (3,385 ) (1,534 ) (8,144 )
(4,542 )
Loss from continuing operations before
income taxes and equity in loss of investee
(54,948 ) (16,885 ) (222,962 ) (92,482 ) Income tax benefit
12,621 13,575 12,417
12,316
Loss from continuing operations before
equity in loss of investee
(42,327 ) (3,310 ) (210,545 ) (80,166 ) Equity in loss of investee
52 59 473 393
Loss from continuing operations (42,379 ) (3,369 )
(211,018 ) (80,559 )
Income from discontinued operations, net
of tax
849 11,179 57,987
48,055
Net income (loss) (41,530 ) 7,810 (153,031 )
(32,504 ) Net (income) loss attributable to noncontrolling
interests 5,668 (3,011 ) 38,422 494 Preferred stock dividends
(1,320 ) (1,319 ) (5,280 ) (3,840 )
Net income (loss) attributable to Rentech
common shareholders
$ (37,182 ) $ 3,480 $ (119,889 ) $ (35,850 ) Net income
(loss) per common share allocated to Rentech common shareholders:
Basic: Continuing operations $ (1.41 ) $ (0.11 ) $ (6.50 ) $ (2.71
) Discontinued operations $ (0.21 ) $ 0.26 $ 1.24 $
1.10 Net loss $ (1.62 ) $ 0.14 $ (5.22 ) $ (1.57 )
Diluted: Continuing operations $ (1.41 ) $ (0.11 ) $ (6.50 ) $
(2.71 ) Discontinued operations $ (0.21 ) $ 0.25 $ 1.24
$ 1.10 Net loss $ (1.62 ) $ 0.14 $ (5.22 ) $
(1.57 ) Weighted-average shares used to compute net income (loss)
per common share: Basic 23,015 22,873
22,981
22,856 Diluted 23,015 23,723
22,981
22,856
Rentech, Inc. Statements of
Operation by Business Segment
(Stated in Thousands)
For the Three Months
Ended For the Years Ended December
31, December 31, 2015
2014 2015 2014
(unaudited) Revenues Pasadena $ 31,653 $ 32,636 $ 139,387 $ 138,233
Fulghum Fibres 22,396 27,422 94,219 94,748 Wood Pellets: Industrial
1,953 1,408 7,933 4,086 Wood Pellets: NEWP 12,918
12,479 54,305 32,114
Total revenues $ 68,920 $ 73,945 $ 295,844 $
269,181 Gross profit (loss) Pasadena $ 804 $ (2,163 ) $
4,656 $ (14,308 ) Fulghum Fibres 5,349 2,865 18,293 12,444 Wood
Pellets: Industrial (5,661 ) 223 (12,388 ) 703 Wood Pellets: NEWP
3,211 2,477 12,086
6,050 Total gross profit $ 3,703 $ 3,402 $
22,647 $ 4,889 Selling, general and administrative
expenses Pasadena $ 1,164 $ 931 $ 3,937 $ 5,078 Fulghum Fibres
1,129 1,979 4,999 6,399 Wood Pellets: Industrial 4,256 4,684 19,969
12,868 Wood Pellets: NEWP 684 566
2,693 1,581
Total segment selling, general and
administrative expenses
$ 7,233 $ 8,160 $ 31,598 $ 25,926
Depreciation and amortization Pasadena $ 11 $ 345 $ 755 $ 1,315
Fulghum Fibres 879 977 2,986 2,088 Wood Pellets: Industrial 45 42
172 139 Wood Pellets: NEWP 583 312
1,468 81
Total segment depreciation and
amortization recorded in operating expenses
$ 1,518 $ 1,676 $ 5,381 $ 3,623 Net
income (loss) Pasadena $ (26,728 ) $ (3,380 ) $ (159,278 ) $
(47,925 ) Fulghum Fibres (7,984 ) (534 ) (3,007 ) 75 Wood Pellets:
Industrial (12,782 ) (4,812 ) (36,542 ) (11,616 ) Wood Pellets:
NEWP 1,878 1,586 7,664
4,342 Total segment net loss $ (45,616 ) $ (7,140 ) $
(191,163 ) $ (55,124 )
Reconciliation of segment net loss to
consolidated net income (loss):
Segment net loss $ (45,616 ) $ (7,140 ) $ (191,163 ) $ (55,124 )
Corporate expenses allocated to RNF
recorded as selling, general and administrative expenses
(1,373 ) (2,235 ) (6,673 ) (7,750 )
Corporate expenses allocated to RNF
recorded as other expenses
(70 )
—
(158 )
—
Corporate and unallocated expenses
recorded as selling, general and administrative expenses
(4,732 ) (6,499 ) (17,991 ) (28,043 )
Corporate and unallocated depreciation and
amortization expense
(131 ) (160 ) (549 ) (579 )
Corporate and unallocated income
(expenses) recorded as other income (expense)
(736 ) (355 ) (730 ) (1,634 ) Corporate and unallocated interest
expense (2,510 ) (2 ) (6,517 ) (380 ) Corporate income tax expense
12,789 13,022 12,763 12,951 Income from discontinued operations,
net of tax 849 11,179 57,987
48,055 Consolidated net income (loss) $
(41,530 ) $ 7,810 $ (153,031 ) $ (32,504 )
Rentech, Inc. Selected Balance Sheet Data
(Stated in Thousands)
As of December 31, 2015
2014 (in thousands) Cash $ 41,708 $
19,666 Working capital 23,760 1,310 Construction in progress 5,134
164,413 Total assets 650,291 816,649 Debt 176,012 132,540 Total
Rentech stockholders' equity (deficit) (15,221 ) 120,733
Cash - RNF
$ 15,823 $ 28,028 RNF cash recorded in discontinued operations
(7,234 ) (24,529 ) Cash excluding RNF 33,119
16,167 Total Cash $ 41,708 $ 19,666
Debt - RNF
$ 347,575 $ 326,685 RNF debt recorded in discontinued operations
(347,575 ) (326,685 ) Debt excluding RNF 176,012
132,540 Total Debt $ 176,012 $ 132,540
Disclosure Regarding Non-GAAP Financial
Measures
Adjusted EBITDA is defined as net income (loss) plus net
interest expense and other financing costs, income tax (benefit)
expense, depreciation and amortization, impairment and debt
extinguishment charges, fair value adjustments to earn-out
consideration and unusual items. Adjusted EBITDA is used as a
supplemental financial measure by management and by external users
of our consolidated financial statements, such as investors and
commercial banks, to assess:
- the financial performance of our assets
without regard to financing methods, capital structure, historical
cost basis, non-cash charges and unusual items; 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 impairments, gain on sale of
alternative energy assets, and the Agrifos settlement, 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 quarters and years ended
December 31, 2015 and 2014.
For the Three Months
Ended For the Years Ended December
31, December 31, 2015
2014 2015 2014
(unaudited, in thousands) Net income (loss) $ (41,530 ) $ 7,810 $
(153,031 ) $ (32,504 ) Add items: Net interest expense 8,943 5,643
32,399 22,279 Asset impairment 36,892 — 171,878 — Pasadena goodwill
impairment — — — 27,202 Agrifos settlement — (5,632 ) — (5,632 )
Loss on debt extinguishment — - — 1,485 Gain on sale of alternative
energy assets — (14,466 ) — (14,466 )
(Gain) loss on fair value adjustment to
earn-out consideration
265
765
(230
) 1,033 Income tax (benefit) expense 180 (913 ) 384 347
Depreciation and amortization 6,174 10,711 38,145 36,404 Other1
(282
) (47 )
(1,974
) (22 ) Consolidated Adjusted EBITDA $ 10,642 $ 3,871
$ 87,571 $ 36,126
1 Includes a gain of $1.6 million related to an insurance
settlement for a fire that occurred at a Fulghum mill in Maine in
2014 and a one-time easement payment of $1.4 million received by
the Pasadena Facility in 2015.
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 fourth quarter of 2015.
For the Three Months Ended December
31, 2015 East Dubuque
Pasadena Partnership
Facility Facility Level
Consolidated (unaudited, in thousands) Net income (loss) $
15,797 $ (26,728 ) $ (7,823 ) $ (18,754 ) Add: Net interest expense
17 — 5,540 5,557 Pasadena asset impairment — 26,340 — 26,340 Income
tax benefit 22 17 — 39 Depreciation and amortization 4,728 644 —
5,372 Other (16 ) — 69 53
Adjusted EBITDA $ 20,548 $ 273 $ (2,214 ) $
18,607
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 2015.
For the Year Ended December 31,
2015 East Dubuque Pasadena
Partnership
Facility Facility Level Consolidated
(unaudited, in thousands) Net income (loss) $ 90,770 $ (159,278 ) $
(33,018 ) $ (101,526 ) Add: Net interest expense 69 — 21,632 21,701
Pasadena asset impairment — 160,622 — 160,622 Income tax expense 22
45 — 67 Depreciation and amortization 18,277 6,657 — 24,934 Other1
(74 ) (1,425 ) 158 (1,341 )
Adjusted EBITDA $ 109,064 $ 6,621 $ (11,228 ) $
104,457
1 Includes a one-time easement payment of $1.4 million received
by the Pasadena Facility.
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 the fourth
quarter of 2014.
For the Three Months Ended December
31, 2014 East Dubuque
Pasadena Partnership
Facility Facility Level
Consolidated (unaudited, in thousands) Net income (loss) $
12,877 $ (3,380 ) $ (1,655 ) $ 7,842 Add: Net interest expense 21 —
4,599 4,620 Income tax expense — (64 ) — (64 ) Depreciation and
amortization 4,135 2,319 — 6,454 Other — 5
(5,435 ) (5,430 ) 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
Facility Facility Level Consolidated
(unaudited, in thousands) Net income (loss) $ 69,803 $ (47,925 ) $
(22,940 ) $ (1,062 ) Add: Net interest expense 85 — 18,972 19,057
Pasadena goodwill impairment — 27,202 — 27,202 Income tax expense 1
17 — 18 Depreciation and amortization 15,912 8,345 — 24,257 Other
— 5 (4,800 ) (4,795 ) Adjusted
EBITDA $ 85,801 $ (12,356 ) $ (8,768 ) $ 64,677
The table below reconciles Fulghum’s Adjusted EBITDA to net
income (loss) for the quarters and years ended December 31, 2015
and 2014.
For the Three Months Ended
For the Years Ended December 31,
December 31, 2015 2014
2015 2014 (unaudited, in
thousands) Fulghum net income (loss) $ (7,984 ) $ (534 ) $ (3,007 )
$ 75 Add Fulghum items: Net interest expense 450 916 2,258 2,578
Asset impairment 10,552 — 11,256 — Income tax expense 130 (466 )
219 584 Depreciation and amortization 5,169 2,965 11,666 9,462
Other1 (1,512 ) (36 ) (794 ) 682
Fulghum's Adjusted EBITDA $ 6,805 $ 2,845 $ 21,598
$ 13,381
1 Includes a gain of $1.6 million related to an insurance
settlement for a fire that occurred at a Fulghum mill in Maine in
2014.
The table below reconciles NEWP’s Adjusted EBITDA to net income
for the quarters and years ended December 31, 2015 and 2014.
For the Three Months Ended
For the Years Ended December 31,
December 31, 2015 2014
2015 2014 (unaudited, in
thousands) NEWP net income $ 1,878 $ 1,586 $ 7,664 $ 4,342 Add NEWP
items: Net interest expense 166 110 596 301 Income tax expense 20
(24 ) 78 29 Depreciation and amortization 1,262 1,090 4,517 1,967
Other (123 ) (72 ) (413 ) (283 ) NEWP's
Adjusted EBITDA $ 3,203 $ 2,690 $ 12,442 $
6,356
The table below reconciles Wood Pellets: Industrial’s Adjusted
EBITDA to net loss for the quarters and years ended December 31,
2015 and 2014.
For the Three Months Ended
For the Years Ended December 31,
December 31, 2015 2014
2015 2014 (unaudited, in
thousands) Wood Pellets: Industrial net loss $ (12,782 ) $ (4,812 )
$ (36,542 ) $ (11,616 ) Add Wood Pellets: Industrial items: Net
interest expense 263 (3 ) 1,330 (36 ) Income tax expense 1 (1 ) 5 4
Depreciation and amortization 530 42 2,235 139 Other 276
320 398 (307 ) Wood
Pellets: Industrial Adjusted EBITDA $ (11,712 ) $ (4,454 ) $
(32,574 ) $ (11,816 )
The table below reconciles net loss attributable to common
shareholders excluding impairments for the fourth quarter of 2015
and excluding the gain on sale of alternative energy assets and the
Agrifos settlement for the fourth quarter of 2014 to net income
(loss) attributable to common shareholders for the respective
periods.
For the Three Months Ended
December 31, (Stated in thousands) 2015
2014 (unaudited)
Net income (loss) attributable to common
shareholders
$ (37,182 ) $ 3,480 Asset impairments 26,261 — Gain on sale of
alternative energy assets — (14,466 ) Agrifos settlement —
(3,359 )
Net loss excluding asset impairments, gain
on sale of alternative energy assets and Agrifos settlement
$ (10,921 ) $ (14,345 ) Net loss per share attributable to common
shareholders $ (1.62 ) $ 0.14 Asset Impairments 1.14 — Gain on sale
of alternative energy assets — (0.61 ) Agrifos settlement —
(0.14 )
Net income per share attributable to
common shareholders excluding asset impairments, gain on sale of
alternative energy assets and Agrifos settlement
$ (0.48 ) $ (0.61 ) Weighted-average common shares outstanding
23,015 23,723
The table below reconciles net loss attributable to common
shareholders excluding impairments for 2015, and excluding
impairments, gain on sale of alternative energy assets, and the
Agrifos settlement for 2014 to net loss attributable to common
shareholders for the respective periods.
For the Years Ended
December 31, (Stated in thousands) 2015
2014 (unaudited) Net loss attributable to
common shareholders $ (119,889 ) $ (35,850 ) Asset impairments
107,047 — Pasadena goodwill impairment — 16,223 Gain on sale of
alternative energy assets — (14,466 ) Agrifos settlement —
(3,359 )
Net loss excluding asset impairments,
Pasadena goodwill impairment, gain on sale of alternative energy
assets and Agrifos settlement
$ (12,842 ) $ (37,452 ) Net loss per share attributable to common
shareholders $ (5.22 ) $ (1.57 ) Asset impairments 4.66 — Pasadena
goodwill impairment — 0.71 Gain on sale of alternative energy
assets — (0.63 ) Agrifos settlement — (0.15 )
Net income per share attributable to
common shareholders excluding asset impairments, Pasadena goodwill
impairment, gain on sale of alternative energy assets and Agrifos
settlement
$ (0.56 ) $ (1.64 ) Weighted-average common shares outstanding
22,981 22,856
The table below reconciles net income attributable to Fulghum
Fibres excluding impairments, to net loss for the fourth quarter
and full year of 2015.
For the Three Months
For the Year
Ended December 31, Ended December 31, (Stated in
thousands) 2015 2015 (unaudited) (unaudited)
Net loss for Fulghum Fibres
$ (7,984 ) $ (3,007 ) Asset Impairment 10,551
11,256
Net income attributable to Fulghum Fibres
excluding the asset impairment
$ 2,567 $ 8,249
The table below reconciles net loss attributable to the Pasadena
Facility excluding impairments to net loss for the fourth quarter
of 2015.
For the Three Months
Ended December 31, (Stated in thousands)
2015 (unaudited) Net loss for Pasadena $ (26,728 ) Pasadena
asset impairment 26,340 Net loss attributable to
Pasadena excluding the Pasadena asset impairment $ (388 )
The table below reconciles the estimated annual stabilized
EBITDA to operating income for the Wawa and Atikokan
facilities.
($ in CAD Millions)
Stabilized Operating Year Low
High Operating income $ - $ 3 Depreciation 13
13 EBITDA $ 13 $ 16
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 to full capacity and their estimated costs, the
estimated annual stabilized EBITDA for the Canadian wood pellet
plants, anticipated cost savings and our liquidity outlook. 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160316005460/en/
Rentech, Inc.Julie Dawoodjee CafarellaVice president of
Investor Relations and Communications310-571-9800ir@rentk.com
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