Arabian American Releases Second Quarter 2013 Results Earnings Call to be Held Today at 4:30 pm EDT

SUGAR LAND, Texas, Aug. 1, 2013 /PRNewswire/ -- Arabian American Development Co. (NYSE: ARSD), a leading provider of high purity specialty chemicals and minority owner of the Al Masane Al Kobra Mining Company ("AMAK"), released their financial results for the second quarter ended June 30, 2013.

Financial Results

Revenue for the second quarter was $56.0 million, a 9.5% decrease from the second quarter of 2012 revenue of $61.8 million and a 6.1% sequential increase as compared to the first quarter of 2013. The second quarter 2013 decrease in revenue was due to a decline in volume as noted below.

Volume for the quarter was 15.7 million gallons compared to 17.2 million gallons, a decrease of 8.6% from the second quarter of 2012, but up 6.7% from the previous quarter.  Volume declined from 2012 primarily due to significant reductions in sales to two customers, lower byproduct sales, and a significant increase in deferred sales which are not recognized until the customer accepts delivery of the product and title has transferred.   Deferred sales increased by 59.1% from Q2 2012 to Q2 2013.

Total gross profit for Q2 2013 was $8.6 million as compared to $8.4 million in the same period last year. The gross profit margin for the quarter was 15.3% compared to 13.5% in the year-ago period.  Margins improved primarily due to improved feedstock composition, higher byproduct pricing and increased operating efficiencies.

Due to the completion of AMAK's equity raise during the second quarter of 2013, a gain on the additional issuance of $4.0 million was recognized in addition to $0.7 million in equity in earnings from AMAK.  For the same period in 2012, $0.3 million was recognized for equity in losses from AMAK.

EBITDA for the second quarter of 2013 was $10.6 million compared to $6.2 million last year.  Adjusted EBITDA which removes the effects of AMAK for comparative purposes for the second quarter of 2013 was $5.9 million compared to $6.5 million in 2012.

Net income attributable to Arabian American in the second quarter was $6.3 million, or $0.26 per basic and diluted share compared to a restated $3.5 million, or $0.14 per basic and diluted share in Q2 2012. 

Cash at the end of the quarter was $4.7 million compared to $9.5 million as of December 31, 2012.  Cash used in investing activities during the first six months was approximately $8.9 million primarily due to the additional equity purchased in AMAK of $7.5 million and additions to plant, pipeline and equipment of $3.1 million which represents an increase of approximately $4.1 million over the corresponding period in 2012. 

"We are pleased with the overall progress in our business.  Sequentially our volumes were up as expected," said Nick Carter, President and Chief Executive Officer of Arabian American.  "The uptick reflects our normal business pattern due to seasonality. Perhaps more importantly, our margins improved in the quarter through a combination of better feedstock composition and operational efficiencies at our petrochemical facility.  Our team at South Hampton Resources has worked diligently to produce these improved results."

Mr. Carter continued, "We are happy to report that the AMAK mine is operating at full capacity and in line with the economic assessment.  The gold dore circuit is undergoing test runs and should be operational prior to the end of the year.  This will add additional revenue to the project and will be another step in getting the economics fine-tuned.  Overall, it is becoming a producing investment for shareholders that we believe will continue to contribute to our net income in 2013."

Earnings Call

The conference call and presentation slides will be simulcast live on the Internet, and can be accessed by going to the investor relations section of the Company's website at http://www.arabianamericandev.com. A replay of the call will also be available through the same link. The webcast replay will be available for one month after the call.

To participate via telephone, callers should dial in five to ten minutes prior to the 4:30 pm Eastern start time; domestic callers (U.S. and Canada) should call 1-877-941-4775 or 1-480-629-9761 if calling internationally. Playback will be available until midnight Eastern Time, Aug 1, 2013. To listen to the playback, please call 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Use pin number 4630664 for the replay.

About Arabian American Development Company (ARSD)

ARSD owns and operates a petrochemical facility located in southeast Texas, just north of Beaumont which specializes in high purity petrochemical solvents and other solvent type manufacturing. The Company is also the original developer and a 35% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

Use of Non-GAAP Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP").  This press release contains the non-GAAP measures: EBITDA and Adjusted EBITDA.  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 accordance with GAAP.

Forward-Looking Statements

Statements in this press release that are not historical facts are forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon our belief, as well as, assumptions made by and information currently available to us. Because such statements are based upon expectations as to future economic performance and are not statements of fact, actual results may differ from those projected. These risks, as well as others, are discussed in greater detail in Arabian American's filings with the Securities and Exchange Commission, including Arabian American's Annual Report on Form 10-K/A for the year ended December 31, 2012, and the Company's subsequent Quarterly Reports on Form 10-Q.  All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release. 

Company Contact:
Nick Carter, President and Chief Executive Officer
(409) 385-8300
ncarter@arabianamericandev.com

Investor Relations Contact:
Kim Rogers-Carrete, Principal
Genesis Select
(303) 415-0200
krogersc@genesisselect.com

Or

Matthew Selinger, Principal
Genesis Select
(303) 415-0200
mselinger@genesisselect.com

-Tables follow-

 

 

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS




JUNE 30,

2013

(unaudited)

DECEMBER 31,

2012

ASSETS

(thousands of dollars)

 Current Assets



  Cash and cash equivalents

$  4,726

$  9,508

  Trade receivables, net

21,081

15,802

  Advance to AMAK

443

2,162

  Inventories

12,316

9,840

  Prepaid expenses and other assets

2,089

1,561

  Contractual based intangible assets, net

230

250

  Taxes receivable

-

1,182

  Deferred income taxes

1,025

1,054

          Total current assets

41,910

41,359




  Plant, pipeline and equipment, net

41,099

40,420




  Investment in AMAK

53,091

37,894

  Mineral properties in the United States

588

588

  Contractual based intangible asset, net of current portion

-

104

  Other assets

11

11




     TOTAL ASSETS

$ 136,699

$ 120,376

LIABILITIES



  Current Liabilities



    Accounts payable

$  5,959

$  6,306

    Accrued interest

98

96

    Current portion of derivative instruments

272

301

    Accrued liabilities

3,296

2,699

    Accrued liabilities in Saudi Arabia

140

140

    Current portion of post-retirement benefit

273

269

    Current portion of long-term debt

1,500

1,500

    Current portion of other liabilities

828

880

          Total current liabilities

12,366

12,191




  Long-term debt, net of current portion

17,539

14,239

  Post-retirement benefit, net of current portion

649

649

  Derivative instruments, net of current portion

424

592

  Other liabilities, net of current portion

391

379

  Deferred income taxes

11,283

10,094

     Total liabilities

42,652

38,144




EQUITY



  Common stock‑authorized 40 million shares of $.10 par value; issued and outstanding

      23.8 million shares in 2013 and 2012

2,382

2,381

  Additional paid-in capital

45,383

44,791

  Accumulated other comprehensive loss

(453)

(580)

  Retained earnings

46,446

35,351

  Total Arabian American Development Company Stockholders' Equity

93,758

81,943

  Noncontrolling Interest

289

289

   Total equity

94,047

82,232




     TOTAL LIABILITIES AND EQUITY

$ 136,699

$ 120,376

 

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)




THREE MONTHS ENDED

SIX MONTHS

ENDED


JUNE 30,

JUNE 30,


2013

2012

2013

2012



(restated)


(restated)


(thousands of dollars)

REVENUES





  Petrochemical Product Sales

$ 54,762

$ 60,671

$ 106,382

$ 116,499

  Processing Fees

1,213

1,178

2,338

2,144


55,975

61,849

108,720

118,643






OPERATING COSTS AND EXPENSES





  Cost of  Sales and Processing





    (including depreciation of  $838, $749, $1,663, and $1,473, respectively)

47,408

53,482

93,474

103,558






   GROSS PROFIT

8,567

8,367

15,246

15,085






GENERAL AND ADMINISTRATIVE EXPENSES





  General and Administrative

3,452

2,646

6,957

5,633

  Depreciation

131

125

260

249


3,583

2,771

7,217

5,882






OPERATING INCOME

4,984

5,596

8,029

9,203






OTHER INCOME (EXPENSE)





  Interest Income

--

--

1

--

  Interest Expense

(123)

(150)

(238)

(315)

  Losses on Cash Flow Hedge Reclassified from OCI

(80)

(92)

(158)

(185)

  Equity in earnings (loss) of AMAK

4,732

(302)

7,696

(515)

  Miscellaneous Income (Expense)

(69)

(2)

(89)

(77)


4,460

(546)

7,212

(1,092)






  INCOME BEFORE INCOME TAXES

9,444

5,050

15,241

8,111






  INCOME TAXES

3,135

1,578

4,146

2,644






  NET INCOME

6,309

3,472

11,095

5,467






 NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST

--

--

--

--






 NET INCOME ATTRIBUTABLE TO ARABIAN AMERICAN

  DEVELOPMENT COMPANY

$ 6,309

$ 3,472

$ 11,095

$ 5,467






Basic Earnings per Common Share





  Net Income Attributable to Arabian American Development Company

  (dollars)

$ 0.26

$ 0.14

$ 0.46

$ 0.23






  Basic Weighted Average Number of Common Shares Outstanding

24,110

24,084

24,108

24,064






Diluted Earnings per Common Share





  Net Income Attributable to Arabian American Development Company

  (dollars)

$ 0.26

$ 0.14

$ 0.45

$ 0.22






  Diluted Weighted Average Number of Common Shares Outstanding

24,652

24,761

24,655

24,762

 

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES(1)




THREE MONTHS ENDED


30-Jun


2013

2012



(restated)


(thousands of dollars)




NET INCOME

$   6,309

$   3,472




Add back:



  Interest

203

242

  Taxes

3,135

1,578

  Depreciation

131

125

  Depreciation in Cost of sales

838

749




EBITDA

$ 10,616

$  6,166

Less:



Equity in (earnings) loss of AMAK

(4,732)

302

Adjusted EBITDA

$  5,884

$  6,468


(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 accordance with GAAP.

 

SOURCE Arabian American Development Co.



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http://www.arabianamericandev.com

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