Delaware | 001-34827 | 27-2301797 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, CO | 80111 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit Number | Description | ||
99.1 | Press Release issued by Molycorp, Inc. on May 9, 2013 |
MOLYCORP, INC. | ||
By: | /s/ Michael F. Doolan | |
Name: | Michael F. Doolan | |
Title: | Chief Financial Officer | |
Date: May 9, 2013 |
Exhibit Number | Description | ||
99.1 | Press Release issued by Molycorp, Inc. on May 9, 2013 |
• | The Company sold 3,274 metric tons (mt) of product at an average sales price, or ASP, of $44.71 per kilogram for the first quarter of 2013. Net revenues for the quarter were $146.4 million, up 9% from the fourth quarter of 2012. |
• | For the quarter, the Company reported a net loss of $0.33 per share. The Company reported a loss of $0.15 per share for the quarter on an adjusted non-GAAP basis. |
• | All key production assets at the Company's new Mountain Pass Rare Earth Facility ("Molycorp Mountain Pass facility") are operational and ramping up to the facility's initial planned annual run rate of 19,050 mt of rare earth oxides ("REO") equivalent by mid-year 2013. |
March 31, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 404,834 | $ | 227,790 | |||
Trade accounts receivable, net | 63,147 | 52,430 | |||||
Inventory | 231,502 | 287,376 | |||||
Deferred charges | 6,110 | 9,412 | |||||
Deferred tax assets | 9,438 | 9,789 | |||||
Income tax receivable | 20,318 | 25,087 | |||||
Prepaid expenses and other current assets | 19,911 | 21,794 | |||||
Total current assets | 755,260 | 633,678 | |||||
Non-current assets: | |||||||
Deposits | 26,639 | 26,769 | |||||
Property, plant and equipment, net | 1,645,374 | 1,544,304 | |||||
Inventory | 24,984 | 26,096 | |||||
Intangible assets, net | 441,677 | 450,938 | |||||
Investments | 65,497 | 65,126 | |||||
Deferred tax assets | 802 | 1,083 | |||||
Goodwill | 239,742 | 239,742 | |||||
Other non-current assets | 9,264 | 6,972 | |||||
Total non-current assets | 2,453,979 | 2,361,030 | |||||
Total assets | $ | 3,209,239 | $ | 2,994,708 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 136,862 | $ | 241,994 | |||
Accrued expenses | 63,381 | 59,013 | |||||
Income tax payable | 15,591 | 15,267 | |||||
Debt and capital lease obligations | 28,788 | 39,604 | |||||
Other current liabilities | 4,589 | 3,539 | |||||
Total current liabilities | 249,211 | 359,417 | |||||
Non-current liabilities: | |||||||
Asset retirement obligation | 17,572 | 18,586 | |||||
Deferred tax liabilities | 135,691 | 166,215 | |||||
Debt and capital lease obligations | 1,338,793 | 1,188,832 | |||||
Derivative liability | 7,028 | 7,816 | |||||
Pension liabilities | 3,338 | 3,292 | |||||
Other non-current liabilities | 2,417 | 2,659 |
March 31, 2013 | December 31, 2012 | ||||||
Total non-current liabilities | 1,504,839 | 1,387,400 | |||||
Total liabilities | $ | 1,754,050 | $ | 1,746,817 | |||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value; 350,000,000 shares authorized at March 31, 2013 | 189 | 139 | |||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized at March 31, 2013 | 2 | 2 | |||||
Additional paid-in capital | 1,939,071 | 1,680,838 | |||||
Accumulated other comprehensive loss | (12,727 | ) | (9,433 | ) | |||
Deficit | (481,699 | ) | (434,476 | ) | |||
Total Molycorp stockholders’ equity | 1,444,836 | 1,237,070 | |||||
Noncontrolling interests | 10,353 | 10,821 | |||||
Total stockholders’ equity | 1,455,189 | 1,247,891 | |||||
Total liabilities and stockholders’ equity | $ | 3,209,239 | $ | 2,994,708 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenues | $ | 146,367 | $ | 84,470 | |||
Costs of sales: | |||||||
Costs excluding depreciation and amortization | (152,544 | ) | (50,070 | ) | |||
Depreciation and amortization | (14,309 | ) | (3,373 | ) | |||
Gross (loss) profit | (20,486 | ) | 31,027 | ||||
Operating expenses: | |||||||
Selling, general and administrative | (24,438 | ) | (24,183 | ) | |||
Corporate development | (115 | ) | (3,381 | ) | |||
Depreciation, amortization and accretion | (8,223 | ) | (358 | ) | |||
Research and development | (6,405 | ) | (3,650 | ) | |||
Operating loss | (59,667 | ) | (545 | ) | |||
Other (expense) income: | |||||||
Other income (expense) | 260 | (6,578 | ) | ||||
Foreign exchange (loss) gain, net | (389 | ) | 1,604 | ||||
Interest (expense) income, net of capitalized interest | (11,649 | ) | 85 | ||||
(11,778 | ) | (4,889 | ) | ||||
Loss before income taxes and equity earnings | (71,445 | ) | (5,434 | ) | |||
Income tax benefit | 28,112 | 2,183 | |||||
Equity in results of affiliates | (3,072 | ) | (227 | ) | |||
Net loss | (46,405 | ) | (3,478 | ) | |||
Net income attributable to noncontrolling interest | (818 | ) | — | ||||
Net loss attributable to Molycorp stockholders | $ | (47,223 | ) | $ | (3,478 | ) | |
Net loss | $ | (46,405 | ) | $ | (3,478 | ) | |
Other comprehensive income: | |||||||
Foreign currency translation adjustments | (3,294 | ) | 2,530 | ||||
Comprehensive loss | $ | (49,699 | ) | $ | (948 | ) | |
Comprehensive loss attributable to: | |||||||
Molycorp stockholders | (48,881 | ) | (948 | ) | |||
Noncontrolling interest | (818 | ) | — | ||||
$ | (49,699 | ) | $ | (948 | ) | ||
Loss per share of common stock: | |||||||
Basic | $ | (0.33 | ) | $ | (0.07 | ) | |
Diluted | $ | (0.33 | ) | $ | (0.07 | ) |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (46,405 | ) | $ | (3,478 | ) | |
Adjustments to reconcile net loss to net cash from operating activities: | |||||||
Depreciation, amortization and accretion | 22,532 | 3,731 | |||||
Deferred income tax benefit | (35,097 | ) | (3,725 | ) | |||
Inventory write-downs | 40,129 | 6,563 | |||||
Release of inventory step-up value | 2,497 | — | |||||
Stock-based compensation (benefit) expense | (325 | ) | 825 | ||||
Unrealized loss on derivatives | — | 6,641 | |||||
Allowance for doubtful accounts | — | 2,500 | |||||
Foreign exchange loss | 2,197 | (1,668 | ) | ||||
Other operating adjustments | (2,149 | ) | 259 | ||||
Net change in operating assets and liabilities | (20,007 | ) | 4,379 | ||||
Net cash (used in) provided by operating activities | (36,628 | ) | 16,027 | ||||
Cash flows from investing activities: | |||||||
Investment in joint ventures | (3,423 | ) | (3,836 | ) | |||
Deposits | — | (459 | ) | ||||
Capital expenditures | (181,103 | ) | (206,463 | ) | |||
Other investing activities | (90 | ) | 2 | ||||
Net cash used in investing activities | (184,616 | ) | (210,756 | ) | |||
Cash flows from financing activities: | |||||||
Capital contributions | — | 390,225 | |||||
Repayments of short-term borrowings—related party | — | (870 | ) | ||||
Repayments of debt | (11,108 | ) | (777 | ) | |||
Net proceeds from sale of common stock | 248,147 | — | |||||
Issuance of 5.50% Convertible Notes | 165,600 | — | |||||
Payments of preferred dividends | (2,846 | ) | (2,846 | ) | |||
Dividend paid to noncontrolling interests | (1,286 | ) | — | ||||
Other financing activities | (79 | ) | (132 | ) | |||
Net cash provided by financing activities | 398,428 | 385,600 | |||||
Effect of exchange rate changes on cash | (140 | ) | 68 | ||||
Net change in cash and cash equivalents | 177,044 | 190,939 | |||||
Cash and cash equivalents at beginning of the period | 227,790 | 418,855 | |||||
Cash and cash equivalents at end of period | $ | 404,834 | $ | 609,794 |
Three months ended March 31, 2013 | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Corporate and other(b) (d) | Eliminations(a) | Total Molycorp, Inc. | |||||||||||||||||||||
Revenues: | (In thousands) | |||||||||||||||||||||||||||
External | $ | 14,658 | $ | 49,600 | $ | 54,678 | $ | 27,431 | $ | — | $ | 146,367 | ||||||||||||||||
Intersegment | 2,645 | 14,610 | — | — | (17,255 | ) | — | |||||||||||||||||||||
Total revenues | $ | 17,303 | $ | 64,210 | $ | 54,678 | $ | 27,431 | $ | (17,255 | ) | $ | 146,367 | |||||||||||||||
Depreciation, amortization and accretion | $ | (9,053 | ) | $ | (5,537 | ) | $ | (5,480 | ) | $ | (2,403 | ) | $ | (59 | ) | $ | — | $ | (22,532 | ) | ||||||||
Operating (loss) income | $ | (56,076 | ) | $ | (3,306 | ) | $ | 6,763 | $ | 2,978 | $ | (9,488 | ) | $ | (538 | ) | $ | (59,667 | ) | |||||||||
(Loss) income before income taxes and equity earnings | $ | (55,644 | ) | $ | (2,891 | ) | $ | 16,900 | $ | 3,731 | $ | (33,003 | ) | $ | (538 | ) | $ | (71,445 | ) | |||||||||
Total assets at March 31, 2013 | $ | 1,868,311 | $ | 605,858 | $ | 608,745 | $ | 109,615 | $ | 1,042,166 | $ | (1,025,456 | ) | $ | 3,209,239 | |||||||||||||
Capital expenditures (c) | $ | 92,339 | $ | 2,961 | $ | 1,041 | $ | 2,931 | $ | 74 | $ | — | $ | 99,346 |
Three months ended March 31, 2012 | Resources | Chemicals and Oxides | Magnetic Materials and Alloys | Rare Metals | Corporate and other(b) | Eliminations(a) | Total Molycorp, Inc. | |||||||||||||||||||||
Revenues: | (In thousands) | |||||||||||||||||||||||||||
External | $ | 44,478 | $ | 7,320 | $ | 18,956 | $ | 13,716 | $ | — | $ | 84,470 | ||||||||||||||||
Intersegment | 1,832 | 3,210 | — | — | (5,042 | ) | — | |||||||||||||||||||||
Total revenues | $ | 46,310 | $ | 10,530 | $ | 18,956 | $ | 13,716 | $ | (5,042 | ) | $ | 84,470 | |||||||||||||||
Depreciation, amortization and accretion | $ | (2,114 | ) | $ | (315 | ) | $ | (76 | ) | $ | (1,202 | ) | $ | (24 | ) | $ | — | $ | (3,731 | ) | ||||||||
Operating income (loss) | $ | 17,531 | $ | (13,537 | ) | $ | 145 | $ | 1,392 | $ | (19,843 | ) | $ | 13,767 | $ | (545 | ) | |||||||||||
Income (loss) before income taxes | $ | 17,599 | $ | (12,894 | ) | $ | (137 | ) | $ | 2,230 | $ | (25,999 | ) | $ | 13,767 | $ | (5,434 | ) | ||||||||||
Total assets at March 31, 2012 | $ | 1,675,653 | $ | 56,781 | $ | 24,313 | $ | 43,718 | $ | 630 | $ | (112,342 | ) | $ | 1,688,753 | |||||||||||||
Capital expenditures (c) | $ | 259,438 | $ | 2,501 | $ | 100 | $ | — | $ | — | $ | — | $ | 262,039 |
(a) | The net elimination in operating results includes costs of sales eliminations of $16,717 and $18,809 for the three months ended March 31, 2013 and 2012, respectively, which consist of intercompany gross profits as well as eliminations of lower of cost or market adjustments related to intercompany inventory. The total assets elimination is comprised primarily of intercompany investments and intercompany accounts receivable and profits in inventory. |
(b) | Corporate loss before income taxes and equity earnings includes business development costs, personnel and related costs, including stock-based compensation expense, accounting and legal fees, occupancy expense, information technology costs and interest expense. Total corporate assets is comprised primarily of cash and cash equivalents and deferred tax assets. |
(c) | On an accrual basis excluding capitalized interest. |
(d) | First quarter 2013 loss at the Corporate segment includes severance charges of $2,077. |
Three Months Ended March 31, | |||||||
(In thousands, except share and per share amounts) | 2013 | 2012 | |||||
Net loss attributable to Molycorp stockholders | $ | (47,223 | ) | $ | (3,478 | ) | |
Dividends on Convertible Preferred Stock | (2,846 | ) | (2,846 | ) | |||
Loss attributable to common stockholders | (50,069 | ) | (6,324 | ) | |||
Weighted average common shares outstanding—basic | 153,314,081 | 87,006,460 | |||||
Basic loss per share | $ | (0.33 | ) | $ | (0.07 | ) | |
Weighted average common shares outstanding—diluted | 153,314,081 | 87,006,460 | |||||
Diluted loss per share | $ | (0.33 | ) | $ | (0.07 | ) | |
Three Months Ended March 31, | |||||||
Revenues (in thousands) | 2013 | 2012 | |||||
Resources (1) | $ | 17,303 | $ | 46,310 | |||
Chemicals and Oxides (2) | 64,210 | 10,530 | |||||
Magnetic Materials and Alloys (3) | 54,678 | 18,956 | |||||
Rare Metals (4) | 27,431 | 13,716 | |||||
Intersegments eliminations | (17,255 | ) | (5,042 | ) | |||
Total Net Revenues | $ | 146,367 | $ | 84,470 | |||
Three Months Ended March 31, | |||||||
Volumes (in metric tons) | 2013 | 2012 | |||||
Resources | 763 | 673 | |||||
Chemicals and Oxides | 1,866 | 277 | |||||
Magnetic Materials and Alloys | 1,263 | 168 | |||||
Rare Metals | 81 | 75 | |||||
Intersegments eliminations | (699 | ) | (235 | ) | |||
3,274 | 958 | ||||||
Years Ended December 31, | |||||||
ASP per kilogram | 2013 | 2012 | |||||
Resources | $ | 22.68 | $ | 68.81 | |||
Chemicals and Oxides | $ | 34.41 | $ | 35.58 | |||
Magnetic Materials and Alloys | $ | 43.29 | $ | 113.10 | |||
Rare Metals | $ | 338.63 | $ | 182.88 | |||
1. The Resources segment includes the Company's operations at its Molycorp Mountain Pass facility where it conducts rare earth minerals extraction to produce: rare earth concentrates; REO, including lanthanum, cerium, neodymium, praseodymium and yttrium; heavy rare earth concentrate, which includes samarium, europium, gadolinium, terbium, dysprosium, and others; and SorbXTM , a line of proprietary rare earth-based water treatment products, formerly known as XSORBX. | |||||||
2. The Chemicals and Oxides division includes: production of REO at the Company's operations in Sillamäe, Estonia; heavy rare earth oxides other custom engineered materials from the Company's facilities in Jiangyin, Jiangsu Province, China; and production of REO, salts of rare earth elements ("REEs"), zirconium-based engineered materials and mixed rare earth/zirconium oxides from the Company's facilities in Zibo, Shandong Province, China. Rare earth and zirconium applications from products made in this segment include catalytic converters, computers, television display panels, optical lenses, mobile phones, electronic chips, and many others. | |||||||
3. The Magnetic Materials and Alloys segment includes: the production of Neo Powders™ through the Company's wholly-owned manufacturing facilities in Tianjin, China, and Korat, Thailand, under the Molycorp Magnequench brand. This operating segment also includes manufacturing of neodymium and samarium magnet alloys, other specialty alloy products and rare earth metals at the Molycorp Metals and Alloys ("MMA") facility, located in Tolleson, Arizona. Neo Powders™ are used in micro motors, precision motors, sensors, and other applications requiring high levels of magnetic strength, flexibility, small size, and reduced weight. | |||||||
4. The Rare Metals segment produces, reclaims, refines and markets high value niche metals and their compounds that include gallium, indium, rhenium, tantalum, and niobium. Operations in this segment include the following: Quapaw, Oklahoma; Blanding, Utah; Peterborough, Ontario; Napanee, Ontario; Sagard, Germany; Hyeongok Industrial Zone in South Korea; and Sillamäe, Estonia. Applications from products made in this segment include wireless technologies, light-emitting diode ("LED"), flat panel display, turbine, solar, catalyst, steel additive, electronics applications, and others. |
Adjusted Net Loss | |||||||
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Net loss attributable to Molycorp stockholders | (47,223 | ) | $ | (3,478 | ) | ||
Certain non-cash and other items: | |||||||
Stock-based compensation | (325 | ) | 825 | ||||
Inventory write-downs | 37,208 | 6,563 | |||||
Loss on foreign currency hedge | — | 6,643 | |||||
Bad debt expense | — | 2,500 | |||||
Impact of purchase accounting on cost of inventory sold | 2,497 | — | |||||
Out-of-ordinary items: | |||||||
Water removal | 3,734 | 3,520 | |||||
Molycorp Mountain Pass non-capitalizable costs | 649 | 5,336 | |||||
Business Expansion items: | |||||||
Due diligence and other transaction costs | — | 3,289 | |||||
Other business expansion expenses | 423 | 3,159 | |||||
Income tax effect of above adjustments | (17,233 | ) | (10,052 | ) | |||
Adjusted net (loss) income | (20,270 | ) | 18,305 | ||||
Dividends on Convertible Preferred Stock | (2,846 | ) | (2,846 | ) | |||
Adjusted net (loss) income attributed to common stockholders | $ | (23,116 | ) | $ | 15,459 | ||
Weighted average common shares outstanding | 153,314,081 | 87,006,460 | |||||
Adjusted net (loss) earnings per share | $ | (0.15 | ) | $ | 0.18 |
EBITDA and Adjusted EBITDA | Three Months Ended March 31, 2013 | ||
Operating loss | $ | (59,667 | ) |
Depreciation and amortization included in costs of sales | 14,309 | ||
Depreciation, amortization and accretion | 8,223 | ||
EBITDA | (37,135 | ) | |
Stock-based compensation | (325 | ) | |
Inventory write-downs | 37,208 | ||
Impact of purchase accounting on cost of inventory sold | 2,497 | ||
Water removal | 3,734 | ||
Molycorp Mountain Pass non-capitalizable costs | 649 | ||
Other business expansion expenses | 423 | ||
Adjusted EBITDA | $ | 7,051 |