Trecora Resources (TREC) Misses Q3 EPS by 3c, Revenues Miss

Trecora Resources (NYSE: TREC) reported Q3 EPS of $0.02, $0.03 worse than the analyst estimate of $0.05. Revenue for the quarter came in at $62.7 million versus the consensus estimate of $69.17 million.

"Operational reliability, disciplined cost control and solid execution drove the Company\'s third quarter 2019 results, yielding net income from continuing operations of $1.6 million compared to net loss from continuing operations of $(0.7) million in third quarter 2018 and consolidated Adjusted EBITDA from continuing operations of $6.9 million compared to $4.9 million in the same period last year," said Pat Quarles, Trecora\'s President and Chief Executive Officer.

"On top of the improved operating results, we recently announced a definitive agreement to sell our entire stake in Al Masane Al Kobra Mining Co., or "AMAK", for $70 million in gross proceeds, with an expected close later in the fourth quarter and subject to government approvals and other closing conditions. Upon close, we will have delivered on our commitment to monetize this asset which will enable us to significantly reduce our debt. Further, what will remain after the completion of this transaction, is a Company with a singular focus on improving our operating businesses, a solid balance sheet and financial flexibility to create shareholder value," Mr. Quarles added.

Sami Ahmad, Trecora's Chief Financial Officer stated, "Consolidated gross margin improved to 15.3% in the third quarter 2019 from 9.3% in the third quarter 2018. This margin improvement was a result of lower feedstock costs, lower operating expenses and improved plant operations, specifically in our Specialty Petrochemicals segment, which saw its gross margins improve from 10.3% in third quarter 2018 to 18.9% in third quarter 2019. Year-to-date consolidated gross margin was 15.3%, a sharp improvement from 11.8% in the same period last year. Strong operating cash flow in the quarter allowed for meaningful debt reduction of $9.0 million. We further reduced debt by an additional $5 million in October bringing our total outstanding debt to approximately $84 million."

Mr. Quarles concluded, "Looking ahead, our focus continues to be the safe and reliable operation of our plants, the quality of our products, and disciplined management of costs and capital expenditures. We expect fourth quarter results to be impacted by typical seasonal demand patterns and from a weather event on October 29th at our Silsbee facility which resulted in damage to one of our feedstock storage tanks and a shutdown of the plant. We expect some loss of sales volumes and recovery costs."

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

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