Trecora Resources Reports Second Quarter 2019 Results

SUGAR LAND, Texas, Aug. 5, 2019 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced financial results for the second quarter ended June 30, 2019.

"Our second quarter's performance demonstrates our ability to increase earnings and achieve strong cash flow, when we execute well. As we strive towards positive and sustainable operational and financial performance, I am pleased with the current results, specifically in our Specialty Petrochemicals business. Driven by solid operational reliability and cost control, the Company was able to exceed first quarter 2019 results, despite approximately $4 million of headwinds in our P&L attributable to higher feedstock costs. This resulted in consolidated Adjusted EBITDA of $9.2 million, which compares to $8.4 million in first quarter 2019 and $6.2 million in second quarter 2018, a 49% increase," said Pat Quarles, Trecora's President and Chief Executive Officer.

"Enhanced safety, running our assets reliably across our operations, delivering on productivity initiatives, and executing on key projects according to plan, all while meeting the high quality expectations of our customers, will continue to be the key drivers to improve our results. While we have further work to do, I am very encouraged by the advances made thus far," Mr. Quarles added.

Mr. Quarles concluded, "Our process to monetize our ownership in AMAK, which had second quarter EBITDA of $7.3 million, continues to advance and, simultaneously, AMAK continues to make progress in throughput rates, concentrate quality and recoveries. In addition, the Guyan gold project is proceeding on schedule and on budget for a second half 2020 startup. Once complete, the project should significantly add to AMAK's earnings and cash flow."

Sami Ahmad, Trecora's Chief Financial Officer stated, "In the second quarter, prime products sales volume of 17.7 million gallons was virtually unchanged from first quarter 2019. Healthy demand from polyethylene and polyurethane markets offset lower sales to the Canadian Oil Sands. In addition, margins for by-products improved from the first quarter due to continued reliable operation of the Advanced Reformer unit and higher by-product prices compared to the first quarter. Strong operating cash flow in the quarter allowed for meaningful debt reduction of $5.1 million. We further reduced debt by an additional $4 million in July, bringing our total outstanding debt to approximately $94 million. Looking ahead, our focus continues to be the safe and reliable operation of our plants, the quality of our products, strong cost management and continued debt reduction."

Second Quarter 2019 Financial Results
Net income in the second quarter of 2019 was $2.4 million, or $0.10 per diluted share(1), compared to net income of $2.2 million, or $0.09 per diluted share(2), in the second quarter of 2018. Net income for the second quarter includes the impact of equity in losses from AMAK of $0.1 million. Adjusted Net Income for the second quarter of 2019 was $2.5 million, or $0.10 per diluted share(1), compared to Adjusted Net Income of $2.0 million, or $0.08 per diluted share(2), in the second quarter 2018.

Total revenue in the second quarter was $69.4 million compared to $68.1 million in the second quarter of 2018. This year-over-year increase was primarily due to an 8.7% increase in Specialty Petrochemicals sales volume, partially offset by a 4.0% decline in average selling prices, which was mainly due to lower feedstock costs. Revenues from processing declined as compared to the second quarter of 2018 due to the termination of a contract in the fourth quarter of 2018.

Gross profit in the second quarter was $10.6 million, or 15.2% of total revenues, compared to $8.1 million, or 12.0% of total revenues, in the second quarter of 2018. Operating income in the second quarter was $4.3 million compared to $3.4 million for the second quarter of 2018. The improved margins were primarily driven by lower feedstock costs, operation of the Advanced Reformer unit and lower labor costs as a result of the cost reduction program implemented in December 2018.

Specialty Petrochemicals
Specialty Petrochemicals net income was $4.7 million in the second quarter of 2019, compared to net income of $2.9 million in the second quarter of 2018. Specialty Petrochemicals volume in the second quarter was 21.4 million gallons, compared to 22.5 million gallons in the first quarter of 2019 and 19.7 million gallons in the second quarter of 2018. Prime product volume in the second quarter was 17.7 million gallons, compared to 17.6 million gallons in the first quarter of 2019 and 16.1 million gallons in the second quarter of 2018. By-product sales volume was 3.7 million gallons in second quarter 2019. Adjusted EBITDA for Specialty Petrochemicals in the second quarter was $9.9 million compared to $11.4 million in the first quarter of 2019 and $6.1 million in the second quarter of 2018.

              Dollar amounts in
               thousands/rounding
               may apply          THREE MONTHS ENDED


                                       JUNE 30,


                                                2019    2018 % Change



     Product sales                           $58,583 $56,135       4%


     Processing fees                           1,527   1,685     (9%)



     Gross revenues                          $60,110 $57,820       4%


     Operating profit before
      depreciation and
      amortization                            10,028   6,095      65%


     Operating profit                          7,104   4,440      60%


     Net profit before taxes                   6,375   3,859      65%


     Depreciation and
      amortization                             2,925   1,655      77%


     Adjusted EBITDA                           9,853   6,125      61%


     Capital expenditures                      1,461   3,529    (59%)

Specialty Waxes
Specialty Waxes net loss was $1.0 million in the second quarter of 2019, compared to a net loss of $0.5 million in the second quarter of 2018. Specialty Waxes generated revenues of approximately $9.3 million in the second quarter, a $1.0 million increase from the first quarter of 2019, and a $1.0 million decrease from the second quarter of 2018. Revenue included $6.7 million of wax product sales and $2.5 million of processing revenues. Wax sales volumes decreased approximately 5.6% from second quarter 2018 due to disruptions of wax feed supply from our suppliers. Adjusted EBITDA for Specialty Waxes in the second quarter was $0.7 million compared to $(0.9) million in the first quarter of 2019 and $1.1 million in the second quarter of 2018.

                Dollar amounts in
                 thousands/rounding
                 may apply          THREE MONTHS ENDED


                                         JUNE 30,


                                                  2019    2018 % Change



     Product sales                              $6,745  $7,434     (9%)


     Processing fees                             2,516   2,852    (12%)



     Gross revenues                             $9,261 $10,286    (10%)


     Operating profit
      before depreciation
      and amortization                             766   1,164    (34%)


     Operating loss                              (633)  (201)    215%


     Net loss before taxes                     (1,013)  (506)    100%


     Depreciation and
      amortization                               1,399   1,365       2%


     Adjusted EBITDA                               734   1,140    (36%)


     Capital expenditures                          426     877    (51%)

Al Masane Al Kobra Mining Company ("AMAK")
AMAK had a net loss of $1.3 million in the second quarter of 2019, compared to a net loss of $0.3 million in the second quarter of 2018. AMAK's sales revenue was $20.6 million in the second quarter of 2019, an increase of 5.5% compared to the second quarter of 2018. AMAK's EBITDA was $7.3 million in the second quarter 2019 compared to $8.3 million in the second quarter of 2018. The year-over-year decline in EBITDA was primarily due to increased cost of sales resulting from a change in inventory valuation methodology and one-time non-recurring expenses. Trecora reported equity in losses of approximately $0.1 million dollars in the second quarter of 2019 compared to equity in earnings of approximately $0.2 million in second quarter of 2018.

Year-to-Date 2019 Financial Results
Net income in the first half of 2019 was $4.2 million, or $0.17 per diluted share(3), compared to net income of $4.6 million, or $0.18 per diluted share(4), for the same period in 2018. Adjusted Net Income in the first half of 2019 was $4.3 million, or $0.17 per diluted share(3) compared to Adjusted Net Income of $4.2 million or $0.17 per diluted share(4), for the same period in 2018. Net income in the first half of 2019 includes the impact of equity in losses from AMAK of $0.2 million.

Total revenue in the first half of 2019 was $134.5 million, compared to $139.8 million for the same period in 2018, a decrease of 3.8%. This decrease was primarily due to a decrease in the average selling price of Specialty Petrochemicals products of 4.0% and lower Specialty Petrochemicals processing revenue of $0.8 million. These two factors were partially offset by a 2.1% increase in Specialty Petrochemicals sales volume.

Gross profit in the first half of 2019 was $20.6 million, or 15.3% of total revenues, compared to $18.3 million, or 13.1% of total revenues, for the same period in 2018. Operating income in the first half of 2019 was $8.1 million, compared to operating income of $7.0 million for the same period in 2018. The improved margins were primarily driven by lower feedstock costs, operation of the Advanced Reformer unit and lower labor costs as a result of the cost reduction program implemented in December 2018.

Specialty Petrochemicals
Specialty Petrochemicals net income was $10.8 million in the first half of 2019, compared to net income of $7.9 million for the same period in 2018. Specialty Petrochemicals volume in the first half of 2019 was 43.9 million gallons, compared to 43.0 million gallons for the same period in 2018. Prime product volume in the first half of 2019 was 35.4 million gallons, compared to 33.7 million gallons in the same period 2018. Adjusted EBITDA for Specialty Petrochemicals in the first half of 2019 increased 46% to $21.3 million, compared to $14.5 million for the same period in 2018.

                Dollar amounts
                 in thousands/
                 rounding may
                 apply                        SIX MONTHS ENDED


                                              JUNE 30,


                                   2019     2018               % Change



     Product sales             $114,073 $116,420                   (2%)


     Processing fees              2,910    3,713                  (22%)



     Gross revenues            $116,983 $120,133                   (3%)


     Operating profit
      before
      depreciation
      and
      amortization               21,435   14,488                    48%


     Operating profit            15,437   11,119                    39%


     Net profit
      before taxes               13,510    9,913                    36%


     Depreciation and
      amortization                5,999    3,369                    78%


     Adjusted EBITDA             21,258   14,515                    46%


     Capital
      expenditures                2,839   13,812                  (79%)

Specialty Waxes
Specialty Waxes had a net loss of $3.6 million in the first half of 2019 compared to a net loss of $1.7 million for the same period in 2018. Specialty Waxes had revenues of $17.5 million in the first half of 2019, an 11.8% decrease from the same period of 2018. Revenues included $12.7 million of wax product sales and $4.8 million of processing revenues. Wax sales volumes in the first half of 2019 decreased approximately 11.2% from the same period 2018 due to the planned maintenance turnaround in the first quarter of 2019 along with disruptions of wax feed supply from our suppliers. Adjusted EBITDA for Specialty Waxes in the first half of 2019 was $(0.2) million, compared to $1.5 million for the same period in 2018.

                Dollar amounts in
                 thousands/rounding
                 may apply          SIX MONTHS ENDED


                                        JUNE 30,


                                                2019     2018 % Change



     Product sales                           $12,748  $13,817     (8%)


     Processing fees                           4,795    6,064    (21%)



     Gross revenues                          $17,543  $19,881    (12%)


     Operating profit
      (loss) before
      depreciation and
      amortization                              (83)   1,554   (105%)


     Operating loss                          (2,830) (1,115)    154%


     Net loss before taxes                   (3,552) (1,687)    111%


     Depreciation and
      amortization                             2,747    2,669       3%


     Adjusted EBITDA                           (154)   1,519   (110%)


     Capital expenditures                        935    1,622    (42%)

AMAK
AMAK had a net loss of $2.5 million in the first half of 2019, compared with a net loss of $0.6 million in the first half of 2018. Revenue was $41.2 million in the first half of 2019, an increase of 22.8% compared to the first half of 2018. EBITDA was $14.4 million in the first half of 2019, compared to $16.1 million in the first half of 2018. The year-over-year decline in EBITDA was primarily due to increased cost of sales resulting from a change in inventory valuation methodology and one-time non-recurring expenses. Trecora reported equity in losses of approximately $0.2 million dollars in the first half of 2019 compared to equity in earnings of approximately $0.5 million in the first half of 2018.

Earnings Call
Tomorrow's conference call and presentation slides will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com or at https://edge.media-server.com/mmc/p/opeg46ub. A replay of the call will also be available through the same link.

To participate via telephone, callers should dial in five to ten minutes prior to the 10:00 am Eastern start time; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 5585897. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 5585897 for the replay.

Use of Non-GAAP Measures
This press release includes the use of both U.S. generally accepted accounting principles ("GAAP") and non-GAAP financial measures. The Company believes certain financial measures, such as EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income (Loss), which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. The Company believes that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.

These non-GAAP measures have been reconciled to the nearest GAAP measure in the tables below entitled Reconciliation of Selected GAAP Measures to Non-GAAP Measures.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin: We define EBITDA as net income (loss) plus interest expense (benefit) including derivative gains and losses, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA plus share-based compensation, plus restructuring and severance expenses, plus losses on extinguishment of debt, plus or minus equity in AMAK's earnings and losses or gains from equity issuances, and plus or minus gains or losses on acquisitions. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.

Adjusted Net Income (Loss): We define Adjusted Net Income (Loss) as net income (loss) plus or minus tax effected equity in AMAK's earnings and losses, minus tax effected restructuring and severance expenses.

Forward-Looking Statements
Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions, including, but not limited to: expectations regarding future market trends; expectations regarding our intention to monetize our ownership in AMAK; and expectations regarding the timing and completion of AMAK's Guyan gold project and its impact on AMAK's financial performance.

Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such statements. Such risks, uncertainties and factors include, but are not limited to: general economic conditions domestically and internationally; insufficient cash flows from operating activities; difficulties in obtaining financing on favorable conditions, or at all; outstanding debt and other financial and legal obligations; lawsuits; competition; industry cycles; feedstock, product and mineral prices; feedstock availability; technological developments; regulatory changes; environmental matters; foreign government instability; foreign legal and political concepts; foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including but not limited to "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in our other filings with the Securities and Exchange Commission (the "SEC"). There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this press release and the information included in our prior releases, reports and other filings with the SEC, the information contained in this press release updates and supersedes such information. Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.

About Trecora Resources (TREC)
TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities. In addition, the Company is the original developer and a 33.3% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

Investor Relations Contact:
Jean Marie Young
The Piacente Group, Inc.
212-481-2050
trecora@tpg-ir.com




              
                (1) Based on 25.1 million shares outstanding.
    (2) Based on 25.0 million shares outstanding.
    (3) Based on 25.1 million shares outstanding.
    4 Based on 25.1 million shares outstanding.

                                                     
        
         TRECORA RESOURCES AND SUBSIDIARIES


                                                        
       
          CONSOLIDATED BALANCE SHEETS




                                                              
         
                June 30, 2019           
     
     December 31,
                                                                       (Unaudited)                                     2018



                                    ASSETS                             (thousands of dollars, except par
                                                                                      value)

    ---

                     Current Assets



       Cash                                                                                      $4,325              $6,735



       Trade receivables, net                                                                    30,518              27,112



       Inventories                                                                               15,295              16,539


        Prepaid expenses and other assets                                                          3,951               4,664



       Taxes receivable                                                                             182                 182




       Total current assets                                                                      54,271              55,232




                     Plant, pipeline and equipment
                          ,net                                                                   191,528             194,657





       
                Goodwill                                                                     21,798              21,798


                     Intangible assets, net                                                       18,016              18,947


                     Investment in AMAK                                                           37,265              38,746


                     Operating lease assets, net                                                  15,197                   0


                     Mineral properties in the United
                      States                                                                         558                 588






       
                TOTAL ASSETS                                                                338,633             329,968



                                    LIABILITIES

    ---

                     Current Liabilities



       Accounts payable                                                                          11,159              19,106



       Accrued liabilities                                                                        5,416               5,439


        Current portion of long-term debt                                                          4,194               4,194


        Current portion of operating lease                                                         3,412                   0


        Current portion of other liabilities                                                         850                 752




       Total current liabilities                                                                 25,031              29,491




                     Long-term debt, net of current
                      portion                                                                     94,191              98,288


                     Operating lease, net of current
                      portion                                                                     11,784                   0


                     Other liabilities, net of current
                      portion                                                                      1,047               1,352


                     Deferred income taxes                                                        16,623              15,676



                     Total liabilities                                                           148,676             144,807





                                    EQUITY

    ---

                     Common stock?authorized 40 million
                      shares of $0.10 par value; issued
                      24.7 million and 24.6 million in
                      2019 and 2018 and outstanding 24.7
                      million and 24.6 million shares in
                      2019 and 2018, respectively                                                  2,472               2,463


                     Additional paid-in capital                                                   58,920              58,294


                     Common stock in treasury, at cost                                               (2)                (8)


                     Retained earnings                                                           128,278             124,123



        Total Trecora Resources Stockholders'
         Equity                                                                                  189,668             184,872



       Noncontrolling Interest                                                                      289                 289




       
                Total equity                                                                189,957             185,161





                     TOTAL LIABILITIES AND EQUITY                                                338,633             329,968


                             
              
                TRECORA RESOURCES AND SUBSIDIARIES


                             
              
                CONSOLIDATED STATEMENTS OF INCOME




                                                                                      THREE MONTHS ENDED                                     SIX MONTHS ENDED
                                                                     JUNE 30,                              JUNE 30,



                                                                    2019                    2018                      2019                   2018



                                                                                      (thousands of dollars, except per share amounts)



     
                REVENUES


      Specialty Petrochemical and Product Sales                  $65,329                 $63,569                  $126,822               $130,268



     Processing Fees                                              4,042                   4,537                     7,704                  9,579



                                                                  69,371                  68,106                   134,526                139,847




                   OPERATING COSTS AND EXPENSES



     Cost of Sales and Processing


      (including depreciation and amortization of
       $4,128, $2,837, $8,357 and $5,667,
       respectively)                                              58,806                  59,964                   113,888                121,565






     
                    GROSS PROFIT                               10,565                   8,142                    20,638                 18,282




                   GENERAL AND ADMINISTRATIVE EXPENSES



     General and Administrative                                   6,081                   4,554                    12,131                 10,889



     Depreciation                                                   208                     191                       421                    387



                                                                   6,289                   4,745                    12,552                 11,276






     
                OPERATING INCOME                                4,276                   3,397                     8,086                  7,006




                   OTHER INCOME (EXPENSE)



     Interest Income                                                  0                      14                         5                     21



     Interest Expense                                           (1,401)                  (815)                  (2,900)               (1,693)


      Equity in Earnings (Losses) of AMAK                           (91)                    228                     (150)                   458



     Miscellaneous Expense                                          284                    (13)                      256                   (39)



                                                                 (1,208)                  (586)                  (2,789)               (1,253)





                   INCOME BEFORE INCOME TAXES                      3,068                   2,811                     5,297                  5,753





     
                INCOME TAX EXPENSE                                664                     596                     1,142                  1,186






     
                NET INCOME                                      2,404                   2,215                     4,155                  4,567




                   NET LOSS ATTRIBUTABLE TO NONCONTROLLING
                    INTEREST                                           0                       0                         0                      0





                   NET INCOME ATTRIBUTABLE TO TRECORA
                    RESOURCES                                      2,404                   2,215                     4,155                  4,567





                   Basic Earnings per Common Share


      Net Income Attributable to Trecora
       Resources (dollars)                                         $0.10                   $0.09                     $0.17                  $0.19




      Basic Weighted Average Number of Common
       Shares Outstanding                                         24,696                  24,370                    24,675                 24,354





                   Diluted Earnings per Common Share


      Net Income Attributable to Trecora
       Resources (dollars)                                         $0.10                   $0.09                     $0.17                  $0.18




      Diluted Weighted Average Number of Common
       Shares Outstanding                                         25,091                  25,014                    25,089                 25,119


                                                                            
          
                TRECORA RESOURCES AND SUBSIDIARIES


                                                                       
      
          RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES(1)




                                                                       
      
          EBITDA, Adjusted EBITDA and A
                djusted EBITDA Margin


                                                                          
        
                (thousands of dollars; rounding may apply)




                                         THREE MONTHS ENDED                                      THREE MONTHS ENDED

                                                                                                                ---

                           
       
       
                  6/30/2019              
        
                
                  6/30/2018

                                                                                                                ---

                             
       
       SPEC. PETRO            SPEC. WAX                            CORP                                         TREC    
     
     SPEC. PETRO      SPEC. WAX       CORP       TREC

                                                                                                                                                                                                       ---

      NET INCOME (LOSS)                              $4,666   $(1,013)                                      $(1,249)                         $2,404               $2,928         $(506)     $(207)     $2,215



     Interest                                        1,053        347                                              1                           1,401                  612            281        (78)        815



     Taxes                                           1,209          0                                          (545)                            664                  930              0       (334)        596


      Depreciation and
       amortization                                     172         24                                             12                             208                  161             22           8         191


      Depreciation and
       amortization in
       cost of sales                                  2,753      1,375                                              0                           4,128                1,494          1,343           0       2,837




     EBITDA                                          9,853        733                                        (1,781)                          8,805                6,125          1,140       (611)      6,654


      Share based
       compensation                                       0          0                                            345                             345                    0              0       (220)      (220)


      Equity in (earnings)
       losses of AMAK                                     0          0                                             91                              91                    0              0       (228)      (228)



      Adjusted EBITDA                                $9,853       $733                                       $(1,345)                         $9,241               $6,125         $1,140    $(1,059)     $6,206

                                                                                                                                                                                                       ===




     Revenue                                        60,110      9,261                                                                        69,371               57,820         10,286                 68,106


      Adjusted EBITDA
       Margin                                         16.4%      7.9%                                                                        13.3%               10.6%         11.1%                  9.1%




                                          SIX MONTHS ENDED                                        SIX MONTHS ENDED

                                                                                                                ---

                           
       
       
                  6/30/2019              
        
                
                  6/30/2018

                                                                                                                ---

                             
       
       SPEC. PETRO            SPEC. WAX                            CORP                                         TREC    
     
     SPEC. PETRO      SPEC. WAX       CORP       TREC

                                                                                                                                                                                                       ---

      NET INCOME (LOSS)                             $10,808   $(3,552)                                      $(3,101)                         $4,155               $7,898       $(1,687)   $(1,644)     $4,567



     Interest                                        2,248        651                                              1                           2,900                1,233            537        (77)      1,693



     Taxes                                           2,203          0                                        (1,061)                          1,142                2,015              0       (829)      1,186


      Depreciation and
       amortization                                     341         48                                             32                             421                  327             44          16         387


      Depreciation and
       amortization in
       cost of sales                                  5,658      2,699                                              0                           8,357                3,042          2,625           0       5,667




     EBITDA                                         21,258      (154)                                       (4,129)                         16,975               14,515          1,519     (2,534)     13,500


      Share based
       compensation                                       0          0                                            558                             558                    0              0         372         372


      Equity in (earnings)
       losses of AMAK                                     0          0                                            150                             150                    0              0       (458)      (458)



      Adjusted EBITDA                               $21,258     $(154)                                      $(3,421)                        $17,683              $14,515         $1,519    $(2,620)    $13,414

                                                                                                                                                                                                       ===




     Revenue                                       116,983     17,543                                                                       134,526              120,132         19,881       (166)    139,847


      Adjusted EBITDA
       Margin                                         18.2%    (0.9%)                                                                        13.1%               12.1%          7.6%                  9.6%

                                    THREE MONTHS ENDED                SIX MONTHS ENDED



                                    
              6/30/2019 
     6/30/2018                   
     6/30/2019   
     6/30/2018



                                
     (thousands of dollars)




                  AMAK Net Loss                 $(1,292)      $(326)                      $(2,475)        $(645)





     Finance and
      interest expense                               448          388                            893            785


     Depreciation and
      amortization                                 7,746        8,281                         15,070         15,982


     Zakat and income
      tax expense                                    366            0                            888              0


                  EBITDA                          $7,268       $8,343                        $14,376        $16,121


                              
              
                Adjusted Net Income and Estimated EPS Impact


                  
              
                (thousands of dollars, except per share amounts; rounding may apply)




                                                                                             THREE MONTHS ENDED                                        SIX MONTHS ENDED
                                                                            JUNE 30,                             JUNE 30,


                                                                           2019                     2018                   2019                                  2018

                                                                                                                                                               ---


              Net Income                                                $2,404                   $2,215                 $4,155                                $4,567




               Equity in losses (earnings) of
                AMAK                                                         91                    (228)                   150                                 (458)


    Tax (expense) benefit at
     statutory rate of 21%                                               (19)                      48                   (32)                                   96

                                                                                                                                                               ---

               Tax effected adjustments                                      72                    (180)                   118                                 (362)

                                                                                                                                                               ---


              Adjusted Net Income                                       $2,476                   $2,035                 $4,273                                $4,205



               Diluted weighted average number
                of shares                                                25,091                   25,014                 25,089                                25,119




               Estimated effect on diluted EPS                          $(0.00)                   $0.01                $(0.00)                                $0.01



               (tax effected adjustments/diluted weighted average
                number of shares)






               (1) This press release includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for
                comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accorance with GAAP.

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SOURCE Trecora Resources