Trecora Resources (TREC) Misses Q2 EPS by 13c

Trecora Resources (NYSE: TREC) reported Q2 EPS of $0.01, $0.13 worse than the analyst estimate of $0.14. Revenue for the quarter came in at $68.1 million versus the consensus estimate of $70.7 million.

"Second quarter results reflect improved execution and continued strong demand at Trecora Chemical while South Hampton Resources endured several customer-based production disruptions that impacted sales volume in the quarter," said Simon Upfill-Brown, president and CEO. "Reduced operating leverage resulting from lower volume, combined with higher operating expenses, including non-recurring expenses related to the commissioning of the Advanced Reformer, pressured reported margins in the quarter; however, we expect those headwinds to lessen over the balance of the year. In addition, we are continuing price leadership efforts to mitigate the pressures in many parts of our business, including higher feedstock costs.

"We have taken many positive steps in recent months to enhance our production capabilities and improve our organizational structure as we focus on operational execution and build a platform for growth," continued Upfill-Brown. "We have taken a methodical approach to change with an emphasis on safety, and I am pleased with our progress, but we have more work to do. Recent executive appointments will help reinforce our operational transformation, and a renewed focus on driving value and volume will solidify our competitive position in the marketplace.

"Having recently completed our multi-year capital building campaign with the safe and successful commissioning of our Advanced Reformer, we expect to leverage a strong competitive position, new, advanced production facilities and a supportive market to drive revenue and significantly grow adjusted EBITDA," concluded Upfill-Brown. "In addition, with no large capital projects on the horizon, we expect annual cash capital requirements to decline to a range of $6 - $8 million per year allowing incremental cash generated by the business to reduce leverage and strengthen our balance sheet. I am confident we are well positioned to deliver reliable production for customers and solid returns to shareholders."

For earnings history and earnings-related data on Trecora Resources (TREC) click here.

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