DELAWARE
|
75-1256622
|
(State or other jurisdiction of
|
(I.R.S. employer incorporation or
|
organization)
|
identification no.)
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1650 Hwy 6 South, Suite 190
|
77478
|
Sugar Land, Texas
|
(Zip code)
|
(Address of principal executive offices)
|
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1
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2
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3
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4
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5
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17
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24
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24
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24
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24
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25
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MARCH 31,
2016
(unaudited)
|
DECEMBER 31,
2015
|
|||||||
ASSETS
|
(thousands of dollars)
|
|||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 14,152 | $ | 18,623 | ||||
Trade receivables, net
|
18,779 | 19,474 | ||||||
Inventories
|
17,325 | 15,804 | ||||||
Prepaid expenses and other assets
|
2,229 | 2,392 | ||||||
Taxes receivable
|
5,495 | 7,672 | ||||||
Deferred income taxes
|
2,671 | 2,116 | ||||||
Total current assets
|
60,651 | 66,081 | ||||||
Plant, pipeline and equipment, net
|
102,387 | 96,907 | ||||||
Goodwill
|
21,798 | 21,798 | ||||||
Other intangible assets, net
|
24,079 | 24,549 | ||||||
Investment in AMAK
|
53,075 | 47,697 | ||||||
Mineral properties in the United States
|
588 | 588 | ||||||
Other assets
|
151 | 171 | ||||||
TOTAL ASSETS
|
$ | 262,729 | $ | 257,791 | ||||
LIABILITIES
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 7,053 | $ | 8,090 | ||||
Current portion of derivative instruments
|
107 | 118 | ||||||
Accrued liabilities
|
3,678 | 4,062 | ||||||
Current portion of post-retirement benefit
|
296 | 294 | ||||||
Current portion of long-term debt
|
8,061 | 8,061 | ||||||
Current portion of other liabilities
|
760 | 2,050 | ||||||
Total current liabilities
|
19,955 | 22,675 | ||||||
Long-term debt, net of current portion
|
71,153 | 73,169 | ||||||
Post-retirement benefit, net of current portion
|
649 | 649 | ||||||
Derivative instruments, net of current portion
|
40 | 59 | ||||||
Other liabilities, net of current portion
|
2,201 | 2,351 | ||||||
Deferred income taxes
|
18,464 | 16,503 | ||||||
Total liabilities
|
112,462 | 115,406 | ||||||
EQUITY
|
||||||||
Common stock-authorized 40 million shares of $.10 par value; issued and outstanding 24.2 million shares in 2016 and 2015
|
2,420 | 2,416 | ||||||
Additional paid-in capital
|
51,316 | 50,662 | ||||||
Retained earnings
|
96,242 | 89,018 | ||||||
Total Trecora Resources Stockholders’ Equity
|
149,978 | 142,096 | ||||||
Noncontrolling Interest
|
289 | 289 | ||||||
Total equity
|
150,267 | 142,385 | ||||||
|
||||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 262,729 | $ | 257,791 |
THREE MONTHS ENDED
|
||||||||
MARCH 31,
|
||||||||
2016
|
2015
|
|||||||
REVENUES
|
(thousands of dollars)
|
|||||||
Petrochemical and Product Sales
|
$ | 47,181 | $ | 50,541 | ||||
Processing Fees
|
5,019 | 4,602 | ||||||
52,200 | 55,143 | |||||||
OPERATING COSTS AND EXPENSES
|
||||||||
Cost of Sales and Processing
|
||||||||
(including depreciation and amortization of $2,219 and $2,026, respectively)
|
40,429 | 40,020 | ||||||
|
||||||||
GROSS PROFIT
|
11,771 | 15,123 | ||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||
General and Administrative
|
5,449 | 5,175 | ||||||
Depreciation
|
177 | 215 | ||||||
5,626 | 5,390 | |||||||
OPERATING INCOME
|
6,145 | 9,733 | ||||||
OTHER INCOME (EXPENSE)
|
||||||||
Interest Income
|
4 | 6 | ||||||
Interest Expense
|
(628 | ) | (613 | ) | ||||
Equity in Earnings of AMAK
|
5,367 | 59 | ||||||
Miscellaneous Income (Expense)
|
(17 | ) | 26 | |||||
4,726 | (522 | ) | ||||||
INCOME BEFORE INCOME TAXES
|
10,871 | 9,211 | ||||||
INCOME TAXES
|
3,647 | 3,427 | ||||||
|
||||||||
NET INCOME
|
7,224 | 5,784 | ||||||
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
-- | -- | ||||||
NET INCOME ATTRIBUTABLE TO TRECORA RESOURCES
|
$ | 7,224 | $ | 5,784 | ||||
Basic Earnings per Common Share
|
||||||||
Net Income Attributable to Trecora Resources (dollars)
|
$ | 0.30 | $ | 0.24 | ||||
Basic Weighted Average Number of Common Shares Outstanding
|
24,484 | 24,309 | ||||||
Diluted Earnings per Common Share
|
||||||||
Net Income Attributable to Trecora Resources (dollars)
|
$ | 0.29 | $ | 0.23 | ||||
Diluted Weighted Average Number of Common Shares Outstanding
|
25,085 | 25,144 |
TRECORA RESOURCES STOCKHOLDERS
|
||||||||||||||||||||||||||||
COMMON STOCK
|
ADDITIONAL
PAID-IN
|
RETAINED
|
NON-
CONTROLLING
|
TOTAL
|
||||||||||||||||||||||||
SHARES
|
AMOUNT
|
CAPITAL
|
EARNINGS
|
TOTAL
|
INTEREST
|
EQUITY
|
||||||||||||||||||||||
(thousands)
|
||||||||||||||||||||||||||||
JANUARY 1, 2016
|
24,158 | $ | 2,416 | $ | 50,662 | $ | 89,018 | $ | 142,096 | $ | 289 | $ | 142,385 | |||||||||||||||
Stock options
|
||||||||||||||||||||||||||||
Issued to Directors
|
- | - | 66 | - | 66 | - | 66 | |||||||||||||||||||||
Issued to Employees
|
- | - | 308 | - | 308 | - | 308 | |||||||||||||||||||||
Issued to Former Director
|
- | - | 24 | - | 24 | - | 24 | |||||||||||||||||||||
Restricted Common Stock
|
||||||||||||||||||||||||||||
Issued to Directors
|
- | - | 31 | - | 31 | - | 31 | |||||||||||||||||||||
Issued to Employees
|
- | - | 143 | - | 143 | - | 143 | |||||||||||||||||||||
Common stock
|
||||||||||||||||||||||||||||
Issued to Directors
|
9 | 1 | 74 | - | 75 | - | 75 | |||||||||||||||||||||
Issued to Employees
|
35 | 3 | 8 | - | 11 | - | 11 | |||||||||||||||||||||
Net Income
|
- | - | - | 7,224 | 7,224 | - | 7,224 | |||||||||||||||||||||
MARCH 31, 2016
|
24,202 | $ | 2,420 | $ | 51,316 | $ | 96,242 | $ | 149,978 | $ | 289 | $ | 150,267 |
THREE MONTHS ENDED
|
||||||||
MARCH 31,
|
||||||||
2016
|
2015
|
|||||||
(thousands of dollars)
|
||||||||
OPERATING ACTIVITIES
|
||||||||
Net Income
|
$ | 7,224 | $ | 5,784 | ||||
Adjustments to Reconcile Net Income of Trecora Resources
|
||||||||
To Net Cash Provided by Operating Activities:
|
||||||||
Depreciation
|
1,926 | 1,770 | ||||||
Amortization of Intangible Assets
|
469 | 471 | ||||||
Unrealized Gain on Derivative Instruments
|
(30 | ) | (242 | ) | ||||
Share-based Compensation
|
647 | 701 | ||||||
Deferred Income Taxes
|
1,407 | (95 | ) | |||||
Postretirement Obligation
|
2 | 2 | ||||||
Equity in earnings of AMAK
|
(5,378 | ) | (59 | ) | ||||
Changes in Operating Assets and Liabilities:
|
||||||||
Decrease in Trade Receivables
|
695 | 2,763 | ||||||
Decrease in Income Tax Receivable
|
2,177 | 434 | ||||||
Increase in Inventories
|
(1,521 | ) | (1,624 | ) | ||||
Decrease in Prepaid Expenses and Other Assets
|
248 | 738 | ||||||
Decrease in Accounts Payable and Accrued Liabilities
|
(1,419 | ) | (89 | ) | ||||
Decrease in Other Liabilities
|
(1,244 | ) | (699 | ) | ||||
Net Cash Provided by Operating Activities
|
5,203 | 9,855 | ||||||
INVESTING ACTIVITIES
|
||||||||
Additions to Plant, Pipeline and Equipment
|
(7,602 | ) | (7,743 | ) | ||||
FINANCING ACTIVITIES
|
||||||||
Issuance of Common Stock
|
11 | 123 | ||||||
Repayment of Long-Term Debt
|
(2,083 | ) | (1,750 | ) | ||||
Net Cash Used in Financing Activities
|
(2,072 | ) | (1,627 | ) | ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(4,471 | ) | 485 | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
18,623 | 8,506 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 14,152 | $ | 8,991 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash payments for interest
|
$ | 583 | $ | 643 | ||||
Cash payments for taxes, net of refunds
|
$ | - | $ | 1,850 | ||||
Supplemental disclosure of non-cash items:
|
||||||||
Capital expansion amortized to depreciation expense
|
$ | 197 | $ | 414 |
March 31, 2016
|
December 31, 2015
|
|||||||
(thousands of dollars)
|
||||||||
Trade receivables
|
$ | 19,079 | $ | 19,684 | ||||
Less allowance for doubtful accounts
|
(300 | ) | (210 | ) | ||||
Trade receivables, net
|
$ | 18,779 | $ | 19,474 |
March 31, 2016
|
December 31, 2015
|
|||||||
(thousands of dollars)
|
||||||||
Raw material
|
$ | 2,213 | $ | 2,905 | ||||
Work in process
|
63 | 56 | ||||||
Finished products
|
15,049 | 12,843 | ||||||
Total inventory
|
$ | 17,325 | $ | 15,804 |
|
Plant, pipeline and equipment consisted of the following:
|
March 31, 2016
|
December 31, 2015
|
|||||||
(thousands of dollars)
|
||||||||
Platinum catalyst
|
$ | 1,612 | $ | 1,612 | ||||
Land
|
4,577 | 4,577 | ||||||
Plant, pipeline and equipment
|
130,081 | 128,302 | ||||||
Construction in progress
|
14,804 | 8,980 | ||||||
Total plant, pipeline and equipment
|
151,074 | 143,471 | ||||||
Less accumulated depreciation
|
(48,687 | ) | (46,564 | ) | ||||
Net plant, pipeline and equipment
|
$ | 102,387 | $ | 96,907 |
March 31, 2016
|
||||||||||||
Intangible assets subject to amortization
(Definite-lived)
|
Gross
|
Accumulated
Amortization
|
Net
|
|||||||||
Customer relationships
|
$ | 16,852 | $ | (1,685 | ) | $ | 15,167 | |||||
Non-compete agreements
|
94 | (29 | ) | 65 | ||||||||
Licenses and permits
|
1,471 | (191 | ) | 1,280 | ||||||||
Developed technology
|
6,131 | (919 | ) | 5,212 | ||||||||
24,548 | (2,824 | ) | 21,724 | |||||||||
Intangible assets not subject to amortization
(Indefinite-lived)
|
||||||||||||
Emissions Allowance
|
197 | - | 197 | |||||||||
Trade name
|
2,158 | - | 2,158 | |||||||||
Total
|
$ | 26,903 | $ | (2,824 | ) | $ | 24,079 |
December 31, 2015
|
||||||||||||
Intangible assets subject to amortization
(Definite-lived)
|
Gross
|
Accumulated
Amortization
|
Net
|
|||||||||
Customer relationships
|
$ | 16,852 | $ | (1,404 | ) | $ | 15,448 | |||||
Non-compete agreements
|
94 | (24 | ) | 70 | ||||||||
Licenses and permits
|
1,471 | (160 | ) | 1,311 | ||||||||
Developed technology
|
6,131 | (766 | ) | 5,365 | ||||||||
24,548 | (2,354 | ) | 22,194 | |||||||||
Intangible assets not subject to amortization
(Indefinite-lived)
|
||||||||||||
Emissions Allowance
|
197 | - | 197 | |||||||||
Trade name
|
2,158 | - | 2,158 | |||||||||
Total
|
$ | 26,903 | $ | (2,354 | ) | $ | 24,549 |
Remainder of
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
|||||||||||||||||||
Customer relationships
|
$ | 842 | $ | 1,123 | $ | 1,123 | $ | 1,123 | $ | 1,123 | $ | 9,833 | ||||||||||||
Non-compete agreements
|
14 | 19 | 19 | 13 | - | - | ||||||||||||||||||
Licenses and permits
|
97 | 106 | 105 | 106 | 106 | 760 | ||||||||||||||||||
Developed technology
|
460 | 613 | 613 | 613 | 613 | 2,300 | ||||||||||||||||||
Total future amortization expense
|
$ | 1,413 | $ | 1,861 | $ | 1,860 | 1,855 | $ | 1,842 | $ | 12,893 |
Three Months Ended
March 31, 2016
|
Three Months Ended
March 31, 2015
|
|||||||||||||||||||||||
Per Share
|
Per Share
|
|||||||||||||||||||||||
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
|||||||||||||||||||
Basic Net Income per Share:
|
||||||||||||||||||||||||
Net Income Attributable to Trecora Resources
|
$ | 7,224 | 24,484 | $ | 0.30 | $ | 5,784 | 24,309 | $ | 0.24 | ||||||||||||||
Unvested restricted stock grant
|
282 | 118 | ||||||||||||||||||||||
Dilutive stock options outstanding
|
319 | 717 | ||||||||||||||||||||||
Diluted Net Income per Share:
|
||||||||||||||||||||||||
Net Income Attributable to Trecora Resources
|
$ | 7,224 | 25,085 | $ | 0.29 | $ | 5,784 | 25,144 | $ | 0.23 |
Fair Value Measurements Using
|
||||||||||||||||
March 31, 2016
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Interest rate swap
|
$ | 147 | - | $ | 147 | - |
Fair Value Measurements Using
|
||||||||||||||||
December 31, 2015
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Interest rate swap
|
$ | 177 | - | $ | 177 | - |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2016
|
2015
|
|||||||
Unrealized gain
|
$ | - | $ | 180 | ||||
Realized loss
|
- | (180 | ) | |||||
Net gain (loss)
|
$ | - | $ | - |
March 31, 2016
|
December 31, 2015
|
|||||||
Fair value of interest rate swap - liability
|
$ | 147 | $ | 177 |
Shares of Restricted
Stock
|
Weighted Average Grant Date Price per Share
|
|||||||
Outstanding at January 1, 2016
|
148,040 | $ | 14.14 | |||||
Granted
|
170,264 | 9.62 | ||||||
Vested
|
(36,575 | ) | 13.80 | |||||
Outstanding at March 31, 2016
|
281,729 | $ | 11.46 |
Number of Stock Options & Warrants
|
Weighted Average Exercise Price per Share
|
Weighted
Average
Remaining
Contractual
Life
|
||||||||||
Outstanding at January 1, 2016
|
1,376,437 | $ | 7.68 | |||||||||
Granted
|
-- | -- | ||||||||||
Exercised
|
(8,000 | ) | 2.84 | |||||||||
Expired
|
-- | -- | ||||||||||
Cancelled
|
-- | -- | ||||||||||
Forfeited
|
-- | -- | ||||||||||
Outstanding at March 31, 2016
|
1,368,437 | $ | 7.71 | 5.9 | ||||||||
Exercisable at March 31, 2016
|
793,437 | $ | 7.58 | 5.8 |
Three Months Ended March 31, 2016
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Product sales
|
$ | 42,624 | $ | 4,557 | $ | - | $ | 47,181 | ||||||||
Processing fees
|
1,441 | 3,578 | - | 5,019 | ||||||||||||
Net revenues
|
44,065 | 8,135 | - | 52,200 | ||||||||||||
Operating profit before depreciation and amortization
|
8,412 | 2,062 | (1,933 | ) | 8,541 | |||||||||||
Operating profit (loss)
|
7,075 | 1,011 | (1,941 | ) | 6,145 | |||||||||||
Depreciation and amortization
|
1,337 | 1,051 | 8 | 2,396 | ||||||||||||
Capital expenditures
|
5,662 | 1,940 | - | 7,602 |
Three Months Ended March 31, 2015
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Product sales
|
$ | 47,183 | $ | 3,358 | $ | - | $ | 50,541 | ||||||||
Processing fees
|
1,524 | 3,078 | - | 4,602 | ||||||||||||
Net revenues
|
48,707 | 6,436 | - | 55,143 | ||||||||||||
Operating profit before depreciation and amortization
|
11,712 | 2,074 | (1,812 | ) | 11,974 | |||||||||||
Operating profit (loss)
|
10,617 | 928 | (1,812 | ) | 9,733 | |||||||||||
Depreciation and amortization
|
1,095 | 1,146 | - | 2,241 | ||||||||||||
Capital expenditures
|
6,815 | 928 | - | 7,743 |
March 31, 2016
|
||||||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Eliminations
|
Consolidated
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Goodwill and intangible assets, net
|
$ | - | $ | 45,877 | $ | - | $ | - | $ | 45,877 | ||||||||||
Total assets
|
199,696 | 87,705 | 101,401 | (126,073 | ) | 262,729 |
Year Ended December 31, 2015
|
||||||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Eliminations
|
Consolidated
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Goodwill and intangible assets, net
|
$ | - | $ | 46,347 | $ | - | $ | - | $ | 46,347 | ||||||||||
Total assets
|
195,358 | 86,076 | 98,728 | (122,371 | ) | 257,791 |
|
Results of Operations
|
Three Months Ended
March 31,
|
||||||||
2016
|
2015
|
|||||||
(Thousands of Dollars)
|
||||||||
Sales
|
$ | 8,992 | $ | 5,301 | ||||
Gross profit
|
191 | 1,712 | ||||||
General, administrative and other
|
2,147 | 2,501 | ||||||
Loss from operations
|
(1,956 | ) | (789 | ) | ||||
Gain on settlement with former operator
|
16,225 | - | ||||||
Net income (loss)
|
$ | 14,269 | $ | (789 | ) |
Three Months Ended March 31,
|
||||||||
2016
|
2015
|
|||||||
(Thousands of Dollars)
|
||||||||
Net income before depreciation and amortization
|
$ | 16,978 | $ | 4,972 |
|
Financial Position
|
March 31,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
(Thousands of Dollars)
|
||||||||
Current assets
|
$ | 22,459 | $ | 26,078 | ||||
Noncurrent assets
|
257,049 | 259,527 | ||||||
Total assets
|
$ | 279,508 | $ | 285,605 | ||||
Current liabilities
|
$ | 2,467 | $ | 22,740 | ||||
Long term liabilities
|
89,271 | 89,364 | ||||||
Shareholders' equity
|
187,770 | 173,501 | ||||||
$ | 279,508 | $ | 285,605 |
Three months ended
March 31,
|
||||||||
2016
|
2015
|
|||||||
(Thousands of Dollars)
|
||||||||
Company’s share of income (loss) reported by AMAK
|
$ | 5,030 | $ | (278 | ) | |||
Amortization of difference between Company’s investment in
AMAK and Company’s share of net assets of AMAK
|
337 | 337 | ||||||
Equity in income of AMAK
|
$ | 5,367 | $ | 59 |
Three months ended
March 31,
|
||||||||
2016
|
2015
|
|||||||
Net Income
|
$ | 7,224 | $ | 5,784 | ||||
Interest expense
|
628 | 613 | ||||||
Depreciation and amortization
|
2,396 | 2,241 | ||||||
Income tax expense
|
3,647 | 3,427 | ||||||
EBITDA
|
$ | 13,895 | $ | 12,065 | ||||
Share-based compensation
|
647 | 525 | ||||||
Equity in earnings of AMAK
|
(5,367 | ) | (59 | ) | ||||
Adjusted EBITDA
|
$ | 9,175 | $ | 12,531 | ||||
Net Income
|
$ | 7,224 | $ | 5,784 | ||||
Equity in earnings of AMAK
|
$ | 5,367 | $ | 59 | ||||
Taxes on equity in earnings at statutory rate of 35%
|
1,878 | 21 | ||||||
Tax effected equity in earnings of AMAK
|
3,489 | 38 | ||||||
Adjusted Net Income
|
$ | 3,735 | $ | 5,746 |
March 31, 2016
|
December 31, 2015
|
March 31, 2015
|
||||||||||
Days sales outstanding in accounts receivable
|
32.7 | 29.4 | 41.6 | |||||||||
Days sales outstanding in inventory
|
30.2 | 23.8 | 23.6 | |||||||||
Days sales outstanding in accounts payable
|
12.3 | 12.2 | 14.9 | |||||||||
Days of working capital
|
50.6 | 41.0 | 50.3 |
2016
|
2015
|
|||||||
Net cash provided by (used in)
|
(thousands of dollars)
|
|||||||
Operating activities
|
$ | 5,203 | $ | 9,855 | ||||
Investing activities
|
(7,602 | ) | (7,743 | ) | ||||
Financing activities
|
(2,072 | ) | (1,627 | ) | ||||
Increase (decrease) in cash and equivalents
|
$ | (4,471 | ) | $ | 485 | |||
Cash and cash equivalents
|
$ | 14,152 | $ | 8,991 |
·
|
Trade receivables decreased approximately $0.7 million (due to a decrease in average selling price) as compared to a decrease of approximately $2.8 million in 2015 (due to a decrease in sales volume);
|
·
|
Other liabilities decreased approximately $1.2 million (due to the recognition of revenue associated with a custom processing customer) as compared to a decrease of approximately $0.7 million in 2015 (also due to revenue recognition from custom processing customers);
|
·
|
Prepaid expenses and other assets increased approximately $0.2 million (due to an increase in prepaid catalyst) as compared to an increase of approximately $0.7 million in 2015 (primarily due to the addition of TC’s prepaid expenses); and
|
·
|
Accounts payable and accrued liabilities decreased $1.4 million (due to a reduction in the accrual for feedstock) as compared to a decrease of approximately $0.1 million in 2015 (due to the variability in payment dates).
|
·
|
Income tax receivable decreased approximately $2.2 million (due to the overpayment being applied to 2016 estimated taxes) as compared to a decrease of approximately $0.4 million in 2015 (due to a smaller overpayment being applied to 2015 estimated taxes).
|
|
Comparison of Three Months Ended March 31, 2016 and 2015
|
|
Specialty Petrochemical Segment
|
2016
|
2015
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Petrochemical Product Sales
|
$ | 42,624 | $ | 47,183 | $ | (4,559 | ) | (9.7 | %) | |||||||
Processing
|
1,441 | 1,524 | (83 | ) | (5.4 | %) | ||||||||||
Gross Revenue
|
$ | 44,065 | $ | 48,707 | $ | (4,642 | ) | (9.5 | %) | |||||||
Volume of Sales (gallons)
|
||||||||||||||||
Petrochemical Products
|
20,353 | 18,104 | 2,249 | 12.4 | % | |||||||||||
Cost of Sales
|
$ | 34,495 | $ | 35,589 | $ | (1,094 | ) | (3.1 | %) | |||||||
Total Operating Expense**
|
13,202 | 13,087 | 115 | 0.9 | % | |||||||||||
Natural Gas Expense**
|
772 | 1,308 | (536 | ) | (41.0 | %) | ||||||||||
Operating Labor Costs**
|
3,821 | 4,062 | (241 | ) | (5.9 | %) | ||||||||||
Transportation Costs**
|
5,473 | 4,908 | 565 | 11.5 | % | |||||||||||
General & Administrative Expense
|
2,346 | 2,306 | 40 | 1.7 | % | |||||||||||
Depreciation and Amortization*
|
1,337 | 1,095 | 242 | 22.1 | % | |||||||||||
Capital Expenditures
|
$ | 5,662 | $ | 6,815 | $ | (1,153 | ) | 16.9 | % |
|
*Includes $1,188 and $900 for 2016 and 2015, respectively, which is included in operating expense
|
|
** Included in cost of sales
|
|
Specialty Wax Segment
|
2016
|
2015
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Product Sales
|
$ | 4,557 | $ | 3,358 | $ | 1,199 | 35.7 | % | ||||||||
Processing
|
3,578 | 3,078 | 500 | 16.2 | % | |||||||||||
Gross Revenue
|
$ | 8,135 | $ | 6,436 | $ | 1,699 | 26.4 | % | ||||||||
Cost of Sales
|
$ | 5,934 | $ | 4,431 | $ | 1,503 | 33.9 | % | ||||||||
General & Administrative Expense
|
1,169 | 1,056 | 113 | 10.7 | % | |||||||||||
Depreciation and Amortization*
|
1,051 | 1,146 | (95 | ) | (8.3 | %) | ||||||||||
Capital Expenditures
|
$ | 1,940 | $ | 928 | $ | 1,012 | 109.1 | % |
|
*Includes $1,031 and $1,126 for 2016 and 2015, respectively, which is included in cost of sales
|
2016
|
2015
|
Change
|
%Change
|
|
(in thousands)
|
||||
General & Administrative Expense
|
$ 1,934
|
$ 1,813
|
$ 121
|
6.7%
|
Equity in earnings of AMAK
|
5,367
|
59
|
5,308
|
8996.6%
|
Three Months Ended
March 31,
|
||||||||
2016
|
2015
|
|||||||
(Thousands of Dollars)
|
||||||||
Sales
|
$ | 8,992 | $ | 5,301 | ||||
Gross profit
|
191 | 1,712 | ||||||
General, administrative and other
|
2,147 | 2,501 | ||||||
Loss from operations
|
(1,956 | ) | (789 | ) | ||||
Gain on settlement with former operator
|
16,225 | - | ||||||
Net income (loss)
|
$ | 14,269 | $ | (789 | ) |
Payments due by period
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
||||||||||||||||
Operating Lease Obligations
|
$ | 21,808 | $ | 3,581 | $ | 6,112 | $ | 5,339 | $ | 6,776 | ||||||||||
Long-Term Debt Obligations
|
80,167 | 8,333 | 16,667 | 55,167 | - | |||||||||||||||
Total
|
$ | 101,975 | $ | 11,914 | $ | 22,779 | $ | 60,506 | $ | 6,776 |
(a)
|
Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934) and determined that our disclosure controls and procedures were effective as of the end of the period covered by this report.
|
(b)
|
Changes in internal control. There were no significant changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
|
Exhibit
Number
|
Description
|
3(a)
|
- Certificate of Incorporation of the Company as amended through the Certificate of Amendment filed with the Delaware Secretary of State on May 22, 2014 (incorporated by reference to Exhibit 3(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (file No. 001-33926))
|
3(b)
|
- Restated Bylaws of the Company dated August 1, 2014 (incorporated by reference to Exhibit 3(b) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (file No. 001-33926))
|
10(a)*
|
- Retirement Awards Program dated January 15, 2008 between Arabian American Development Company and Hatem El Khalidi (incorporated by reference to Exhibit 10(h) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (file No. 001-33926))
|
10(b)*
|
- Arabian American Development Company Stock and Incentive Plan adopted April 3, 2012 (incorporated by reference to Exhibit A to the Company’s Form DEF 14A filed April 25, 2012 (file No. 001-33926))
|
10(c)
|
- Articles of Association of Al Masane Al Kobra Mining Company, dated July 10, 2006 (incorporated by reference to Exhibit 10(m) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))
|
10(d)
|
- Bylaws of Al Masane Al Kobra Mining Company (incorporated by reference to Exhibit 10(n) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))
|
10(e)
|
- Letter Agreement dated August 5, 2009, between Arabian American Development Company and the other Al Masane Al Kobra Company shareholders named therein (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 27, 2009 (file No. 001-33926))
|
10(f)
|
- Limited Guarantee dated October 24, 2010, between Arabian American Development Company and the Saudi Industrial Development Fund (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 27, 2010 (file No. 001-33926))
|
10(g)
|
- Amended and Restated Credit Agreement dated October 1, 2014, between Texas Oil & Chemical Co. II, Inc. and certain subsidiaries and Bank of America, N.A. as administrative agent (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on October 3, 2014 (file No. 001-33926))
|
10(h)
|
- Stock Purchase Agreement dated September 19, 2014, between Trecora Resources, Texas Oil & Chemical Co. II, Inc., SSI Chusei, Inc. and Schumann/Steier Holdings, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on September 25, 2014 (file No. 001-33926))
|
31.1
|
- Certification of Chief Executive Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934
|
Exhibit
Number
|
Description
|
31.2
|
- Certification of Chief Financial Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934
|
32.1
|
- Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
- Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
- XBRL Instance Document
|
101.SCH
|
- XBRL Taxonomy Schema Document
|
101.CAL
|
- XBRL Taxonomy Calculation Linkbase Document
|
101.LAB
|
- XBRL Taxonomy Label Linkbase Document
|
101.PRE
|
- XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
- XBRL Taxonomy Extension Definition Linkbase Document
|
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1.
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I have reviewed this quarterly report on Form 10-Q of Trecora Resources;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
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|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's independent registered public accounting firm and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Trecora Resources;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's independent registered public accounting firm and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2016 |
May. 04, 2016 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | TRECORA RESOURCES | |
Entity Central Index Key | 0000007039 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,502,346 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 |
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares shares in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
EQUITY | ||
Common stock, authorized (in shares) | 40.0 | 40.0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, issued (in shares) | 24.2 | 24.2 |
Common stock, outstanding (in shares) | 24.2 | 24.2 |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
|
OPERATING COSTS AND EXPENSES | ||
Depreciation and amortization included in the cost of sales and processing | $ 2,219 | $ 2,026 |
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2016 - USD ($) shares in Thousands, $ in Thousands |
COMMON STOCK [Member] |
ADDITIONAL PAID-IN CAPITAL [Member] |
RETAINED EARNINGS [Member] |
TOTAL [Member] |
NON-CONTROLLING INTEREST [Member] |
Total |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2015 | $ 2,416 | $ 50,662 | $ 89,018 | $ 142,096 | $ 289 | $ 142,385 |
Balance (in shares) at Dec. 31, 2015 | 24,158 | 24,200 | ||||
Stock options | ||||||
Issued to Directors | $ 0 | 66 | 0 | 66 | 0 | $ 66 |
Issued to Employees | 0 | 308 | 0 | 308 | 0 | 308 |
Issued to Former Director | 0 | 24 | 0 | 24 | 0 | 24 |
Restricted Common Stock | ||||||
Issued to Directors | 0 | 31 | 0 | 31 | 0 | 31 |
Issued to Employees | 0 | 143 | 0 | 143 | 0 | 143 |
Common Stock | ||||||
Issued to Directors | $ 1 | 74 | 0 | 75 | 0 | 75 |
Issued to Directors (in shares) | 9 | |||||
Issued to Employees | $ 3 | 8 | 0 | 11 | 0 | 11 |
Issued to Employees (in shares) | 35 | |||||
Net Income | $ 0 | 0 | 7,224 | 7,224 | 0 | 7,224 |
Balance at Mar. 31, 2016 | $ 2,420 | $ 51,316 | $ 96,242 | $ 149,978 | $ 289 | $ 150,267 |
Balance (in shares) at Mar. 31, 2016 | 24,202 | 24,200 |
GENERAL |
3 Months Ended |
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Mar. 31, 2016 | |
GENERAL [Abstract] | |
GENERAL | 1. GENERAL Organization Trecora Resources (the “Company”), was incorporated in the State of Delaware in 1967. Our principal business activities are the manufacturing of various specialty hydrocarbons and synthetic waxes and the provision of custom processing services. Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company” are intended to mean Trecora Resources and its subsidiaries. This document includes the following abbreviations: (1) TREC – Trecora Resources (2) TOCCO – Texas Oil & Chemical Co. II, Inc. – Wholly owned subsidiary of TREC and parent of SHR and TC (3) SHR – South Hampton Resources, Inc. – Petrochemical segment and parent of GSPL (4) GSPL – Gulf State Pipe Line Co, Inc. – Pipeline support for the petrochemical segment (5) TC – Trecora Chemical – Specialty wax segment (6) AMAK – Al Masane Al Kobra Mining Company – Mining investment – 35% ownership (7) PEVM – Pioche Ely Valley Mines, Inc. – Inactive mine - 55% ownership Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with the financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The unaudited condensed financial statements included in this document have been prepared on the same basis as the annual condensed financial statements and in management’s opinion reflect all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. We have made estimates and judgments affecting the amounts reported in this document. The actual results that we experience may differ materially from our estimates. In the opinion of management, the disclosures included in these financial statements are adequate to make the information presented not misleading. Operating results for the three months ended March 31, 2016, are not necessarily indicative of results for the year ending December 31, 2016. We currently operate in two segments, specialty petrochemical products and specialty synthetic waxes. All revenue originates from United States’ sources, and all long-lived assets owned are located in the United States. The Company owns a 35% interest in AMAK, a Saudi Arabian closed joint stock company which owns and is developing mining assets in Saudi Arabia. We account for our investment under the equity method of accounting. See Note 15. Certain reclassifications have been made to the Statements of Income for the three months ended March 31, 2015, in order to conform to the three months ended March 31, 2016, presentation. These reclassifications had no effect on net income for the three months ended March 31, 2015, as previously reported. Certain reclassifications have been made to the Consolidated Balance Sheets for the year ended December 31, 2015, related to our adoption of ASU 2015-03 and ASU 2015-15 as noted below in Note 2. |
RECENT ACCOUNTING PRONOUNCEMENTS |
3 Months Ended |
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Mar. 31, 2016 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the revenue recognition requirements of FASB Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and most industry-specific guidance throughout the Accounting Standards Codification, resulting in the creation of FASB ASC Topic 606, Revenue from Contracts with Customers. ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU provides alternative methods of retrospective adoption and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption would be permitted but not before annual periods beginning after December 15, 2016.The Company is currently assessing the potential impact of adopting this ASU on its consolidated financial statements and related disclosures. In April 2015 the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU 2015-03. In August 2015 the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. ASU 2015-15 was issued to address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements that were not found ASU 2015-03. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, and should be applied retrospectively. The Company adopted ASU 2015-03 and ASU 2015-15 at and for the three months ended March 31, 2016. At March 31, 2016, and December 31, 2015, related net loan fees of approximately $1.0 million and $1.2 million, respectively, have been netted against long term debt. In November 2015 the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The new standard eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company is currently assessing the potential impact of adopting this ASU on its consolidated financial statements and related disclosures. In February 2016 the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently assessing the potential impact of adopting this ASU on its consolidated financial statements and related disclosures. In March 2016 the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which will reduce complexity in accounting standards related to share-based payment transactions, including, among others, (1) accounting for income taxes, (2) classification of excess tax benefits on the statement of cash flow, (3) forfeitures, and (4) statutory tax withholding requirements. The ASU is effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. The Company is currently assessing the potential impact of adopting this ASU on its consolidated financial statements and related disclosures. |
TRADE RECEIVABLES |
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TRADE RECEIVABLES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
TRADE RECEIVABLES | 3. TRADE RECEIVABLES Trade receivables, net, consisted of the following:
Trade receivables serve as collateral for our amended and restated loan agreement (see Note 8). |
INVENTORIES |
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INVENTORIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | 4. INVENTORIES Inventories include the following:
The difference between the calculated value of inventory under the FIFO and LIFO bases generates either a recorded LIFO reserve (i.e., where FIFO value exceeds the LIFO value) or an unrecorded negative LIFO reserve (i.e., where LIFO value exceeds the FIFO value). In the latter case, in order to ensure that inventory is reported at the lower of cost or market and in accordance with ASC 330-10, we do not increase the stated value of our inventory to the LIFO value. At March 31, 2016, and December 31, 2015, LIFO value of petrochemical inventory exceeded FIFO; therefore, in accordance with the above policy, no LIFO reserve was recorded. Inventory serves as collateral for our amended and restated loan agreement (see Note 8). Inventory included petrochemical products in transit valued at approximately $1.6 million and $2.7 million at March 31, 2016, and December 31, 2015, respectively. |
PLANT, PIPELINE AND EQUIPMENT |
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PLANT, PIPELINE AND EQUIPMENT [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PLANT, PIPELINE AND EQUIPMENT | 5. PLANT, PIPELINE AND EQUIPMENT
Plant, pipeline, and equipment serve as collateral for our amended and restated loan agreement (see Note 8). Interest capitalized for construction for the three months ended March 31, 2016, and 2015, was approximately $31,000 and $27,000, respectively. Construction in progress during the first three months of 2016 included equipment purchased for the hydrogenation expansion, the new reformer unit, a new custom processing unit, and a new cooling tower which was associated with our D train expansion. Amortization relating to the platinum catalyst which is included in cost of sales was $21,067 for the three months ended March 31, 2016, and 2015. |
GOODWILL AND INTANGIBLE ASSETS, NET |
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GOODWILL AND INTANGIBLE ASSETS, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | 6. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill and intangible assets were recorded in relation to the acquisition of TC on October 1, 2014. Intangible Assets The following tables summarize the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands):
Amortization expense for intangible assets included in cost of sales for the three months ended March 31, 2016, and 2015 was approximately $470,000 and $471,000, respectively. Based on identified intangible assets that are subject to amortization as of March 31, 2016, we expect future amortization expenses for each period to be as follows (in thousands):
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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES |
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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES | 7. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES The following table (in thousands, except per share amounts) sets forth the computation of basic and diluted net income per share attributable to Trecora Resources for the three months ended March 31, 2016, and 2015, respectively.
At March 31, 2016, and 2015, 1,368,437 and 1,527,091 potential common stock shares, respectively were issuable upon the exercise of options and warrants. The earnings per share calculations for the periods ended March 31, 2016, and 2015, included 300,000 shares of the Company that are held in the treasury of TOCCO. |
LIABILITIES AND LONG-TERM DEBT |
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Mar. 31, 2016 | |
LIABILITIES AND LONG-TERM DEBT [Abstract] | |
LIABILITIES AND LONG-TERM DEBT | 8. LIABILITIES AND LONG-TERM DEBT On October 1, 2014, we entered into an Amended and Restated Credit Agreement (“ARC”) with the lenders which from time to time are parties to the ARC and Bank of America, N.A., as Administrative Agent for the Lenders, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Lead Arranger. Under the ARC, we may borrow, repay and re-borrow revolving loans from time to time during the period ending September 30, 2019, up to but not exceeding $40.0 million. All outstanding loans under the revolving loans must be repaid on October 1, 2019. As of March 31, 2016, and December 31, 2015, there was a long-term amount of $1.0 million outstanding. The interest rate on the loan varies according to several options. Interest on the loan is paid monthly and a commitment fee of 0.37% is due quarterly on the unused portion of the loan. At March 31, 2016, approximately $39.0 million was available to be drawn. Under the ARC, we also borrowed $70.0 million in a single advance term loan (the “Acquisition Loan”) to partially finance the acquisition of TC. Interest on the Acquisition Loan is payable quarterly using a ten year commercial style amortization. Principal is also payable on the last business day of each March, June, September and December in an amount equal to $1,750,000, provided that the final installment on the September 30, 2019, maturity date shall be in an amount equal to the then outstanding unpaid principal balance of the Acquisition Loan. At March 31, 2016, there was a short-term amount of $7.0 million and a long-term amount of $52.5 million outstanding. At December 31, 2015, there was a short-term amount of $7.0 million and a long-term amount of $54.3 million outstanding. Under the ARC, we also had the right to borrow $25.0 million in a multiple advance loan (“Term Loans”). Borrowing availability under the Term Loans ended on December 31, 2015. The Term Loans converted from a multiple advance loan to a “mini-perm” loan once certain obligations were fulfilled such as certification that construction of D-Train was completed in a good and workmanlike manner, receipt of applicable permits and releases from governmental authorities, and receipt of releases of liens from the contractor and each subcontractor and supplier. Interest on the Term Loans is paid monthly. At March 31, 2016, there was a short-term amount of $1.3 million and a long-term amount of $18.3 million outstanding. At December 31, 2015, there was a short-term amount of $1.3 million and a long-term amount of $18.7 million outstanding. The interest rate on all of the above loans varies according to several options as defined in the ARC. At March 31, 2016, and December 31, 2015, the rate was 2.68% and 2.42%, respectively. We were in compliance with all covenants at March 31, 2016. |
FAIR VALUE MEASUREMENTS |
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FAIR VALUE MEASUREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The following items are measured at fair value on a recurring basis at March 31, 2016, and December 31, 2015: Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carrying value of cash and cash equivalents, trade receivables, accounts payable, accrued liabilities, accrued liabilities in Saudi Arabia and other liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of variable rate long term debt reflects recent market transactions and approximate carrying value. We used other observable inputs that would qualify as Level 2 inputs to make our assessment of the approximate fair value of our cash and cash equivalents, trade receivables, accounts payable, accrued liabilities, accrued liabilities in Saudi Arabia, other liabilities and variable rate long term debt. The fair value of the derivative instruments are described below. Commodity Financial Instruments We periodically enter into financial instruments to hedge the cost of natural gasoline (the primary feedstock) and natural gas (used as fuel to operate the plant). We assess the fair value of the financial swaps on feedstock using quoted prices in active markets for identical assets or liabilities (Level 1 of fair value hierarchy). At March 31, 2016, and December 31, 2015, no commodity financial instruments were outstanding. For additional information see Note 10. Interest Rate Swap In March 2008 we entered into an interest rate swap agreement with Bank of America related to a $10.0 million term loan secured by plant, pipeline and equipment. The interest rate swap was designed to minimize the effect of changes in the London InterBank Offered Rate (“LIBOR”) rate. We had designated the interest rate swap as a cash flow hedge under ASC Topic 815, Derivatives and Hedging; however, due to the ARC, we felt that the hedge was no longer entirely effective. Due to the time required to make the determination and the immateriality of the hedge, we began treating it as ineffective as of October 1, 2014. We assess the fair value of the interest rate swap using a present value model that includes quoted LIBOR rates and the nonperformance risk of the Company and Bank of America based on the Credit Default Swap Market (Level 2 of fair value hierarchy). We have consistently applied valuation techniques in all periods presented and believe we have obtained the most accurate information available for the types of derivative contracts we hold. See discussion of our derivative instruments in Note 10. |
DERIVATIVE INSTRUMENTS |
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DERIVATIVE INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS | 10. DERIVATIVE INSTRUMENTS Commodity Financial Contracts Hydrocarbon based manufacturers, such as the Company, are significantly impacted by changes in feedstock and natural gas prices. Not considering derivative transactions, feedstock and natural gas used for the three months ended March 31, 2016, and 2015, represented approximately 64.0% and 68.0% of our petrochemical operating expenses, respectively. The significant percentage decrease of petrochemical operating expenses illustrates the impact that feedstock price changes have on our operations. During the first quarter of 2016, feedstock prices continued to decline industry-wide. We endeavor to acquire feedstock and natural gas at the lowest possible cost. Our primary feedstock (natural gasoline) is traded over the counter and not on organized futures exchanges. Financially settled instruments (fixed price swaps) are the principal vehicle used to give some predictability to feed prices. We do not purchase or hold any derivative financial instruments for trading or speculative purposes and hedging is limited by our risk management policy to a maximum of 40% of monthly feedstock requirements. Typically, financial contracts are not designated as hedges. As of March 31, 2016, we had no outstanding committed financial contracts. The following tables detail (in thousands) the impact the agreements had on the financial statements:
The realized and unrealized gains/(losses) are recorded in Cost of Sales and Processing for the periods ended March 31, 2016, and 2015. As a percentage of Cost of Sales and Processing, realized and unrealized gains/(losses) accounted for 0% for the three months ended March 31, 2016, and 2015. Interest Rate Swap In March 2008, we entered into a pay-fixed, receive-variable interest rate swap agreement with Bank of America related to a $10.0 million (later increased to $14 million) term loan secured by plant, pipeline and equipment. The effective date of the interest rate swap agreement was August 15, 2008, and terminates on December 15, 2017. The notional amount of the interest rate swap was $2.5 million and $2.75 million at March 31, 2016, and December 31, 2015, respectively. We receive credit for payments of variable rate interest made on the term loan at the loan’s variable rates, which are based upon the London InterBank Offered Rate (LIBOR), and pay Bank of America an interest rate of 5.83% less the credit on the interest rate swap. We originally designated the transaction as a cash flow hedge according to ASC Topic 815, Derivatives and Hedging. Beginning on August 15, 2008, the derivative instrument was reported at fair value with any changes in fair value reported within other comprehensive income (loss) in the Company’s Statement of Stockholders’ Equity. We entered into the interest rate swap to minimize the effect of changes in the LIBOR rate. The following table shows (in thousands) the impact the agreement had on the financial statements:
Due to the ARC, we believe that the hedge is no longer entirely effective; therefore, we began treating the interest rate swap as ineffective at that point. The changes in fair value are now recorded in the Statement of Income. For the three months ended March 31, 2016, an unrealized loss of approximately $6,000 and a realized loss of approximately $37,000 were recorded. For the three months ended March 31, 2015, an unrealized gain of approximately $10,000 and a realized loss of approximately $53,000 were recorded, respectively. |
STOCK-BASED COMPENSATION |
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STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION Stock-based compensation recognized in the first three months of 2016 and 2015 was approximately $647,000 and $701,000, respectively. Restricted Stock Awards On March 1, 2016, we awarded approximately 135,000 shares of restricted stock to officers at a grant date price of $9.39. One-half of the restricted stock vests ratably over 3 years. The other half vests at the end of the three years based upon the performance metrics of return on invested capital and earnings per share growth. The number of shares actually granted will be adjusted based upon relative performance to our peers. Compensation expense recognized during the three months ended March 31, 2016, was approximately $35,000. On January 29, 2016, we awarded 35,333 shares of restricted stock to a director at a grant date price of $10.52. The restricted stock award vests over 5 years in 20% increments with the first tranche issued on January 29, 2016. Director’s compensation recognized during the three months ended March 31, 2016, was approximately $87,000. Directors’ compensation of approximately $19,000 during the three months ended March 31, 2016, was recognized related to restricted stock grants vesting through 2020. Employee compensation of approximately $108,000 and $72,000 during the three months ended March 31, 2016, and 2015, respectively, was recognized related to restricted stock with a 4 year vesting period which was awarded to officers. This restricted stock vests through 2019. Employee compensation of approximately $181,000 during the three months ended March 31, 2015, for fully vested restricted stock which was awarded to various employees. Restricted stock activity in the first three months of 2016 was as follows:
Stock Option and Warrant Awards A summary of the status of our stock option awards and warrants is presented below:
The fair value of the options granted below was calculated using the Black Scholes option valuation model with the assumptions as disclosed in prior quarterly and annual filings. Directors’ compensation of approximately $66,000 and $76,000 during the three months ended March 31, 2016, and 2015, respectively, was recognized related to options to purchase shares vesting through 2017. Employee compensation of approximately $308,000 and $348,000 during the three months ended March 31, 2016, and 2015, respectively, was recognized related to options with a 4 year vesting period which were awarded to officers and key employees. These options vest through 2018. Post-retirement compensation of approximately $24,000 was recognized during the three months ended March 31, 2016, and 2015, related to options awarded to Mr. Hatem El Khalidi in July 2009. On May 9, 2010, the Board of Directors determined that Mr. El Khalidi forfeited these options and other retirement benefits when he made various demands against the Company and other AMAK Saudi shareholders which would benefit him personally and were not in the best interests of the Company and its shareholders. The Company is litigating its right to withdraw the options and benefits and as such, these options and benefits continue to be shown as outstanding. See further discussion in Note 17. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, for additional information. |
SEGMENT INFORMATION |
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SEGMENT INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | 12. SEGMENT INFORMATION We operate through business segments according to the nature and economic characteristics of our products as well as the manner in which the information is used internally by our key decision maker, who is our Chief Executive Officer. Our petrochemical segment includes SHR and GSPL. Our specialty wax segment includes TC. We also separately identify our corporate overhead and investing which includes financing and administrative activities such as legal, accounting, consulting, investor relations, officer and director compensation, corporate insurance, and other administrative costs.
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INCOME TAXES |
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Mar. 31, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 13. INCOME TAXES We file an income tax return in the U.S. federal jurisdiction and a margin tax return in Texas. Tax returns for the years 2011 through 2014 remain open for examination in various tax jurisdictions in which we operate. As of March 31, 2016, and December 31, 2015, we recognized no material adjustments in connection with uncertain tax positions. The effective tax rate varies from the federal statutory rate of 35% primarily as a result of state tax expense and stock option based compensation offset by the manufacturing deduction. |
POST-RETIREMENT OBLIGATIONS |
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POST-RETIREMENT OBLIGATIONS [Abstract] | |
POST-RETIREMENT OBLIGATIONS | 14. POST-RETIREMENT OBLIGATIONS In January 2008 an amended retirement agreement was entered into with Mr. Hatem El Khalidi; however, on May 9, 2010, the Board of Directors terminated the agreement due to actions of Mr. El Khalidi. See Note 17. All amounts which have not met termination dates remain recorded until a resolution is achieved. As of March 31, 2016, and 2015, approximately $1.0 million remained outstanding and was included in post-retirement benefits. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, for additional information. |
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") |
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INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") | 15. INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (“AMAK”) As of March 31, 2016, and December 31, 2015, the Company had a non-controlling equity interest (35%) of approximately $53.1 million and $47.7 million, respectively. This investment is accounted for under the equity method. There were no events or changes in circumstances that may have an adverse effect on the fair value of our investment in AMAK at March 31, 2016. AMAK’s financial statements were prepared in the functional currency of AMAK which is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the U. S. Dollar (USD) at a fixed exchange rate of 1 USD to 3.75 SR. The summarized results of operation and financial position for AMAK are as follows: Results of Operations
Gain on settlement with former operator of approximately $16.2 million relates to a settlement with the former operator of the mine resulting in a reduction of previously accrued operating expenses. Depreciation and amortization for the periods ended March 31, 2016, and 2015, was approximately $2.7 million and $5.0 million, respectively. Therefore, net income before depreciation and amortization was as follows:
Financial Position
The equity in the income of AMAK reflected on the consolidated statement of income for the three months ended March 31, 2016, and 2015, is comprised of the following:
See our Annual Report on Form 10-K for the year ended December 31, 2015, for additional information. |
RELATED PARTY TRANSACTIONS |
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RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 16. RELATED PARTY TRANSACTIONS Consulting fees of approximately $33,000 and $25,000 were incurred during the three months ended March 31, 2016, and 2015, respectively from IHS Global FZ LLC of which Company Director Gary K Adams holds the position of Chief Advisor – Chemicals. Consulting fees of approximately $22,000 were incurred during the three months ended March 31, 2016, from Chairman of the Board, Nicholas Carter. Due to his history and experience with the Company and to provide continuity after his retirement, a three year consulting agreement was entered into with Mr. Carter. |
COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Guarantees – On October 24, 2010, we executed a limited Guarantee in favor of the Saudi Industrial Development Fund (“SIDF”) whereby we agreed to guaranty up to 41% of the SIDF loan to AMAK in the principal amount of 330.0 million Saudi Riyals (US$88.0 million) (the “Loan”). The term of the loan is through June 2019. As a condition of the Loan, SIDF required all shareholders of AMAK to execute personal or corporate Guarantees; as a result, our guarantee is for approximately 135.33 million Saudi Riyals (US$36.1 million). The loan was necessary to continue construction of the AMAK facilities and provide working capital needs. We received no consideration in connection with extending the guarantee and did so to maintain and enhance the value of its investment. The total amount outstanding to the SIDF at March 31, 2016, was 310.0 million Saudi Riyals (US$82.7 million). Litigation - On March 21, 2011, Mr. El Khalidi filed suit against the Company in Texas alleging breach of contract and other claims. The 88th Judicial District Court of Hardin County, Texas dismissed all claims and counterclaims for want of prosecution in this matter on July 24, 2013. The Ninth Court of Appeals subsequently affirmed the dismissal for want of prosecution and the Supreme Court of Texas denied Mr. El Khalidi’s petition for review. On May 1, 2014, Mr. El Khalidi refiled his lawsuit against the Company for breach of contract and defamation in the 356th Judicial District Court of Hardin County, Texas. The case was transferred to the 88th Judicial District Court of Hardin County, Texas where it is currently pending. On April 6, 2015, Mr. El-Khalidi nonsuited his defamation claim. We believe that the remaining claims are unsubstantiated and plan to vigorously defend the case. Liabilities of approximately $1.0 million remain recorded, and the options will continue to accrue in accordance with their own terms until all matters are resolved. On April 30, 2015, TC and TREC received notice of a lawsuit filed in the 152nd Judicial District Court of Harris County, Texas. The suit alleged that the plaintiff, an independent contractor employee, was injured while working on a product line at TC. On March 31, 2016, plaintiff agreed to settle all claims against TC and TREC for an insignificant amount. On or about August 3, 2015, SHR received notice of a lawsuit filed in the 14th Judicial District Court of Calcasieu Parish, Louisiana. The suit alleges that the plaintiff became ill from exposure to benzene. SHR placed its insurers on notice. Its insurers retained a law firm based in Louisiana to defend SHR. On or about March 18, 2016, SHR received notice of a lawsuit filed in the 172nd Judicial District Court of Jefferson County, Texas. The suit alleges that the plaintiff became ill from exposure to benzene. SHR placed its insurers on notice and plans to vigorously defend the case. Environmental Remediation - Amounts charged to expense for various activities related to environmental monitoring, compliance, and improvements were approximately $144,000 and $135,000 for the three months ended March 31, 2016, and 2015, respectively. |
SUBSEQUENT EVENTS |
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SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS On May 2, 2016, TC purchased a manufacturing plant from BASF adjacent to TC’s facility which will be integrated into TC’s current operations. This acquisition was made to expand TC’s capabilities. The purchase price was not significant to the consolidated financial statements. We will provide additional information once we complete our accounting for the acquisition in our Form 10-Q for the six months ended June 30, 2016. |
TRADE RECEIVABLES (Tables) |
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Trade Receivables | Trade receivables, net, consisted of the following:
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INVENTORIES (Tables) |
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Inventories | Inventories include the following:
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PLANT, PIPELINE AND EQUIPMENT (Tables) |
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Plant, Pipeline and Equipment |
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
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Summary of Intangible Assets by Major Class | The following tables summarize the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands):
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Estimated Amortization Expenses for Succeeding Five Fiscal Years | Based on identified intangible assets that are subject to amortization as of March 31, 2016, we expect future amortization expenses for each period to be as follows (in thousands):
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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share | The following table (in thousands, except per share amounts) sets forth the computation of basic and diluted net income per share attributable to Trecora Resources for the three months ended March 31, 2016, and 2015, respectively.
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FAIR VALUE MEASUREMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following items are measured at fair value on a recurring basis at March 31, 2016, and December 31, 2015: Assets and Liabilities Measured at Fair Value on a Recurring Basis
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DERIVATIVE INSTRUMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized And Unrealized Gains On Derivatives | The following tables detail (in thousands) the impact the agreements had on the financial statements:
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Interest Rate Swaps [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Liabilities | The following table shows (in thousands) the impact the agreement had on the financial statements:
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STOCK-BASED COMPENSATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Activity | Restricted stock activity in the first three months of 2016 was as follows:
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Summary Of Status Of Stock Option Awards | A summary of the status of our stock option awards and warrants is presented below:
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SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Our petrochemical segment includes SHR and GSPL. Our specialty wax segment includes TC. We also separately identify our corporate overhead and investing which includes financing and administrative activities such as legal, accounting, consulting, investor relations, officer and director compensation, corporate insurance, and other administrative costs.
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INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Results of Operation and Financial Position for AMAK | The summarized results of operation and financial position for AMAK are as follows: Results of Operations
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Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation | Therefore, net income before depreciation and amortization was as follows:
Financial Position
The equity in the income of AMAK reflected on the consolidated statement of income for the three months ended March 31, 2016, and 2015, is comprised of the following:
|
GENERAL (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
Segment
| |
Noncontrolling Interest [Line Items] | |
Number of operating segments | 2 |
AMAK [Member] | |
Noncontrolling Interest [Line Items] | |
Percentage of ownership | 35.00% |
Pioche Ely Valley Mines, Inc. ("PEVM") [Member] | |
Noncontrolling Interest [Line Items] | |
Percentage of ownership | 55.00% |
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | ||
Net loan fees | $ 1.0 | $ 1.2 |
TRADE RECEIVABLES (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
TRADE RECEIVABLES [Abstract] | ||
Trade receivables | $ 19,079 | $ 19,684 |
Less allowance for doubtful accounts | (300) | (210) |
Trade receivables, net | $ 18,779 | $ 19,474 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
INVENTORIES [Abstract] | ||
Raw material | $ 2,213 | $ 2,905 |
Work in process | 63 | 56 |
Finished products | 15,049 | 12,843 |
Total inventory | 17,325 | 15,804 |
Excess of current cost over LIFO value | 0 | 0 |
Products in transit | $ 1,600 | $ 2,700 |
PLANT, PIPELINE AND EQUIPMENT (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | $ 151,074,000 | $ 143,471,000 | |
Less accumulated depreciation | (48,687,000) | (46,564,000) | |
Net plant, pipeline and equipment | 102,387,000 | 96,907,000 | |
Interest capitalized for construction | 31,000 | $ 27,000 | |
Amortization relating to the platinum catalyst | 21,067 | $ 21,067 | |
Platinum Catalyst [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 1,612,000 | 1,612,000 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 4,577,000 | 4,577,000 | |
Plant, Pipeline and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 130,081,000 | 128,302,000 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | $ 14,804,000 | $ 8,980,000 |
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2008 |
---|---|---|---|
Liabilities [Abstract] | |||
Term loan secured by plant, pipeline and equipment | $ 10,000 | ||
Recurring [Member] | |||
Liabilities [Abstract] | |||
Interest rate swap | $ 147 | $ 177 | |
Recurring [Member] | Level 1 [Member] | |||
Liabilities [Abstract] | |||
Interest rate swap | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | |||
Liabilities [Abstract] | |||
Interest rate swap | 147 | 177 | |
Recurring [Member] | Level 3 [Member] | |||
Liabilities [Abstract] | |||
Interest rate swap | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
DERIVATIVE INSTRUMENTS [Abstract] | |||
Feedstock and natural gas usage to operating expenses | 64.00% | 68.00% | |
Monthly feedstock requirements hedged, Maximum | 40.00% | ||
Derivatives, Fair Value [Line Items] | |||
Unrealized gain | $ 30 | $ 242 | |
Realized and unrealized gains/(losses) as a percentage of cost of sales and processing | 0.00% | 0.00% | |
Unrealized loss | $ (6) | $ 10 | |
Realized loss | 36 | 53 | |
Interest Rate Swaps [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Term loan in pay fixed, receive variable interest rate swap | 10,000 | ||
Term loan secured by plant, pipeline and equipment | 14,000 | ||
Notional amount | $ 2,500 | $ 2,750 | |
Derivative, variable interest rate | 5.83% | ||
Fair value of interest rate swap - liability | $ 147 | $ 177 | |
Not Designated as Hedging Instrument [Member] | Commodity Financial Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized gain | 0 | 180 | |
Realized loss | 0 | (180) | |
Net gain (loss) | $ 0 | $ 0 |
INCOME TAXES (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
INCOME TAXES [Abstract] | |
Federal statutory rate | 35.00% |
POST-RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Mr. Hatem El Khalidi [Member] | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Post retirement liability | $ 1.0 | $ 1.0 |
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Director [Member] | ||
Related Party Transaction [Line Items] | ||
Consulting fees | $ 33,000 | $ 25,000 |
Chairman [Member] | ||
Related Party Transaction [Line Items] | ||
Consulting fees | $ 22,000 | |
Period of consulting agreement | 3 years |
COMMITMENTS AND CONTINGENCIES (Details) SAR in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
Mar. 31, 2016
SAR
|
Oct. 24, 2010
USD ($)
|
Oct. 24, 2010
SAR
|
|
Loss Contingencies [Line Items] | |||||
Expenses for environmental monitoring, compliance, and improvements | $ 144,000 | $ 135,000 | |||
Pending Litigation [Member] | |||||
Loss Contingencies [Line Items] | |||||
Accrual recorded value | 1,000,000 | ||||
Saudi Industrial Development Fund Limited Guarantee [Member] | |||||
Guarantor Obligations [Line Items] | |||||
Loan guarantee, maximum | 41.00% | 41.00% | |||
Principal amount of loan guaranteed | $ 88,000,000 | SAR 330,000 | |||
Amount of maximum exposure | $ 82,700,000 | SAR 310,000 | $ 36,100,000 | SAR 135,330 |
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