Arabian American Releases Third Quarter 2013 Results
- Reports Strong Revenues up 12% Year over Year
- Near Record Volume of 17 million Gallons
Earnings Call to be Held Today at 4:30 pm EDT
SUGAR LAND, Texas, Oct. 31, 2013 /PRNewswire/ -- Arabian American Development Co. (NYSE: ARSD), a leading provider of high purity specialty chemicals and minority owner of Al Masane Al Kobra Mining Company ("AMAK"), released their financial results for the third quarter ended September 30, 2013.
"We are pleased with the overall improvements we saw in our business in the third quarter. Sequential and year-over-year volumes were up as reflected by this being our second best quarter ever in terms of volumes. We also saw slight increases in product pricing, as well as increased processing fees due to renegotiation of processing contracts," said Nick Carter, President and Chief Executive Officer of ARSD. "We continued to see margins improve in the quarter through a combination of better feedstock composition, increased toll processing revenue, and operational efficiencies at our petrochemical facility. I am very pleased with the performance of our team at South Hampton Resources. Additionally, the AMAK mine continues routine operations with sales bookings through year end that will put them on track for the projected ore tonnage to ship in 2013. Barring unforeseen events, we anticipate AMAK will have shipped 36,000 tons of zinc concentrate and 36, 000 tons of copper concentrate by year end."
Financial Results
Revenue for the third quarter was $60.9 million, a 12.1% increase from the third quarter of 2012 revenue of $54.3 million and an 8.7% sequential increase as compared to the second quarter of 2013. The third quarter 2013 increase in revenue year-over-year was due to higher volume and slightly stronger pricing of petrochemical products, along with 38.2% increase in processing fees.
Volume for the quarter was 16.9 million gallons compared to 16.1 million gallons, an increase of 5.4% from the third quarter of 2012, and up 7.8% from sequentially. Volume increased from 2012 primarily due to increased sales internationally. We set a record in the third quarter of 2013 for the most isocontainers shipments during a quarter. Isocontainers are the method most frequently utilized for overseas shipments. Deferred sales increased by 42.5% from Q3 2012 to Q3 2013.
Total gross profit for Q3 2013 was $10.1 million as compared to $8.8 million in the same period last year. The gross profit margin for the quarter was 16.6% compared to 16.2% in the year-ago period. The slight improvement in margins was primarily due to improved ratio of prime products to total sales resulting in increased pentane sales and decreased by-product sales along with better returns on engineering and product change overs with tolling customers.
Equity in earnings for AMAK in Q3 2013 was $1.3 million as compared to a loss of $0.5 million in the same period last year. The 2012 results have been restated to reflect the effect of the equity method of accounting to the three months ended September 30, 2012.
EBITDA for the third quarter of 2013 was $8.8 million compared to $5.9 million last year. Adjusted EBITDA which removes the effects of AMAK for comparative purposes for the third quarter of 2013 was $7.5 million compared to $6.4 million in 2012.
Net income attributable to Arabian American in the third quarter was $5.2 million, or $0.22 per basic and $0.21 per diluted share compared to a restated $3.0 million, or $0.13 per basic and $0.12 per diluted share in Q32012.
Cash at the end of the quarter was $7.1 million compared to $9.5 million as of December 31, 2012. Cash used in investing activities during the first nine months was approximately $11.0 million primarily due to the additional equity purchased in AMAK of $7.5 million and additions to plant, pipeline and equipment of $5.2 million offset by $2.0 million net return of advances to AMAK.
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 web site 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 1-877-941-2069 or 1-480-629-9713 if calling internationally. Playback will be available until midnight Eastern Time, November 7, 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 4647638 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
[email protected]
Investor Relations Contact:
Kim Rogers, Principal
Genesis Select
(303) 415-0200
[email protected]
Or
Matthew Selinger, Principal
Genesis Select
(303) 415-0200
[email protected]
-Tables follow-
| ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS |
||
| SEPTEMBER 30, 2013 (unaudited) |
DECEMBER 31, 2012 |
|
| ASSETS |
(thousands of dollars) |
|
| Current Assets |
||
| Cash and cash equivalents |
$ 7,076 |
$ 9,508 |
| Trade receivables, net |
20,320 |
15,802 |
| Advance to AMAK |
507 |
2,162 |
| Inventories |
13,110 |
9,840 |
| Prepaid expenses and other assets |
2,497 |
1,561 |
| Contractual based intangible assets, net |
167 |
250 |
| Taxes receivable |
- |
1,182 |
| Deferred income taxes |
1,426 |
1,054 |
| Total current assets |
45,103 |
41,359 |
| Plant, pipeline and equipment, net |
41,871 |
40,420 |
| Investment in AMAK |
54,393 |
37,894 |
| Mineral properties in the United States |
588 |
588 |
| Contractual based intangible asset, net of current portion |
- |
104 |
| Other assets |
353 |
11 |
| TOTAL ASSETS |
$ 142,308 |
$ 120,376 |
|
LIABILITIES |
||
| Current Liabilities |
||
| Accounts payable |
$ 5,699 |
$ 6,306 |
| Accrued interest |
109 |
96 |
| Current portion of derivative instruments |
296 |
301 |
| Accrued liabilities |
3,939 |
2,699 |
| Accrued liabilities in Saudi Arabia |
140 |
140 |
| Current portion of post-retirement benefit |
276 |
269 |
| Current portion of long-term debt |
1,500 |
1,500 |
| Current portion of other liabilities |
1,504 |
880 |
| Total current liabilities |
13,463 |
12,191 |
| Long-term debt, net of current portion |
15,189 |
14,239 |
| Post-retirement benefit, net of current portion |
649 |
649 |
| Derivative instruments, net of current portion |
367 |
592 |
| Other liabilities, net of current portion |
1,191 |
379 |
| Deferred income taxes |
11,801 |
10,094 |
| Total liabilities |
42,660 |
38,144 |
| EQUITY |
||
| Common stock‑authorized 40 million shares of $.10 par value; issued and outstanding 23.8 million shares in 2013 and 2012 |
2,383 |
2,381 |
| Additional paid-in capital |
45,716 |
44,791 |
| Accumulated other comprehensive loss |
(406) |
(580) |
| Retained earnings |
51,666 |
35,351 |
| Total Arabian American Development Company Stockholders' Equity |
99,359 |
81,943 |
| Noncontrolling Interest |
289 |
289 |
| Total equity |
99,648 |
82,232 |
| TOTAL LIABILITIES AND EQUITY |
$ 142,308 |
$ 120,376 |
| ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
||||
| THREE MONTHS ENDED |
NINE MONTHS ENDED |
|||
| SEPTEMBER 30, |
SEPTEMBER 30, |
|||
| 2013 |
2012 |
2013 |
2012 |
|
| (restated) |
(restated) |
|||
| (thousands of dollars) |
||||
| REVENUES |
||||
| Petrochemical Product Sales |
$ 59,354 |
$ 53,181 |
$ 165,737 |
$ 169,681 |
| Processing Fees |
1,516 |
1,097 |
3,853 |
3,240 |
| 60,870 |
54,278 |
169,590 |
172,921 |
|
| OPERATING COSTS AND EXPENSES |
||||
| Cost of Sales and Processing |
||||
| (including depreciation of $834, $762, $2,497, and $2,236, respectively) |
50,772 |
45,511 |
144,246 |
149,069 |
| GROSS PROFIT |
10,098 |
8,767 |
25,344 |
23,852 |
| GENERAL AND ADMINISTRATIVE EXPENSES |
||||
| General and Administrative |
3,411 |
3,122 |
10,368 |
8,755 |
| Depreciation |
129 |
126 |
389 |
375 |
| 3,540 |
3,248 |
10,757 |
9,130 |
|
| OPERATING INCOME |
6,558 |
5,519 |
14,587 |
14,722 |
| OTHER INCOME (EXPENSE) |
||||
| Interest Income |
4 |
2 |
5 |
2 |
| Interest Expense |
(141) |
(120) |
(379) |
(435) |
| Losses on Cash Flow Hedge Reclassified from OCI |
(73) |
(90) |
(231) |
(275) |
| Equity in earnings (loss) of AMAK |
1,302 |
(528) |
8,998 |
(1,043) |
| Miscellaneous Expense |
(57) |
(15) |
(146) |
(92) |
| 1,035 |
(751) |
8,247 |
(1,843) |
|
| INCOME BEFORE INCOME TAXES |
7,593 |
4,768 |
22,834 |
12,879 |
| INCOME TAXES |
2,372 |
1,764 |
6,519 |
4,408 |
| NET INCOME |
5,221 |
3,004 |
16,315 |
8,471 |
| NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST |
-- |
-- |
-- |
-- |
| NET INCOME ATTRIBUTABLE TO ARABIAN AMERICAN DEVELOPMENT COMPANY |
$ 5,221 |
$ 3,004 |
$ 16,315 |
$ 8,471 |
| Basic Earnings per Common Share |
||||
| Net Income Attributable to Arabian American Development Company (dollars) |
$ 0.22 |
$ 0.13 |
$ 0.68 |
$ 0.35 |
| Basic Weighted Average Number of Common Shares Outstanding |
24,116 |
24,091 |
24,110 |
24,073 |
| Diluted Earnings per Common Share |
||||
| Net Income Attributable to Arabian American Development Company (dollars) |
$ 0.21 |
$ 0.12 |
$ 0.66 |
$ 0.34 |
| Diluted Weighted Average Number of Common Shares Outstanding |
24,782 |
24,753 |
24,697 |
24,759 |
| ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES(1) |
||
| THREE MONTHS ENDED |
||
| 30-Sep |
||
| 2013 |
2012 |
|
| (restated) |
||
| (thousands of dollars) |
||
| NET INCOME |
$ 5,221 |
$ 3,004 |
| Add back: |
||
| Interest |
214 |
210 |
| Taxes |
2,372 |
1,764 |
| Depreciation |
129 |
126 |
| Depreciation in Cost of sales |
834 |
762 |
| EBITDA |
$ 8,770 |
$ 5,866 |
| Less: |
||
| Equity in (earnings) loss of AMAK |
(1,302) |
528 |
| Adjusted EBITDA |
$ 7,468 |
$ 6,394 |
| (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 Company
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