Trecora Resources (TREC) Reports Q4 Loss of $0.01, Revenues Beat; Launches $20M Share Buyback

March 8, 2021 4:13 PM EST

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Trecora Resources (NYSE: TREC) reported Q4 EPS of ($0.01), versus ($0.76) reported last year. Revenue for the quarter came in at $58.1 million versus the consensus estimate of $52.3 million.

  • Full year net income of $31.2 million (which includes the net gain from the sale of AMAK of $26.2 million) compared to net loss of $15.0 million in 2019
  • Full year 2020 Adjusted EBITDA from continuing operations of $21.6 million
  • Paydown of $37.4 million of debt in 2020; Bank debt of $46.1 million vs. $83.3 million at end of December 2019; Total cash balance of $55.7 million at year-end
  • Portfolio of growth projects delivered $4.5 million in EBITDA in 2020
  • Launching $20 million share repurchase program

Executive Commentary

"We fulfilled the commitments we pledged at the onset of 2020 despite the extraordinary challenges that unfolded during the year. Completing the sale of our non-core AMAK investment strengthened our balance sheet by allowing us to significantly reduce bank debt to target levels while also maintaining significant liquidity for growth opportunities. The successful launch and execution of our growth portfolio program across the company delivered $4.5 million of Adjusted EBITDA contribution in the year," said Pat Quarles, Trecora's President and Chief Executive Officer.

"We are currently managing the industry-wide impact of the recent freeze event in Texas and the related utility failures. While the full impact on first quarter remains uncertain, we believe we are well-positioned at the start of 2021 to benefit from the strength of our end markets that continue to recover, and from our growth portfolio that continues to progress and evolve. This has given us the confidence to initiate our $20 million share repurchase program and further our commitment to deliver value to our stockholders. This year, we intend to maintain our disciplined and proactive approach to cost control and capital allocation while we focus on investing in accretive growth projects and opportunities," concluded Mr. Quarles.

Sami Ahmad, Trecora's Chief Financial Officer stated, "While prime product sales for the year were severely impacted by the pandemic, declining nearly 10% from 2019, fourth quarter prime product demand increased from weakened levels in the second and third quarters as well as versus fourth quarter 2019. The sales growth was driven by solid demand in the polyethylene and expandable polystyrene markets.

"We ended the year with substantial liquidity and a strong balance sheet. Cash at year end was approximately $55.7 million and our revolver remained undrawn. We believe we are well positioned to navigate business uncertainties as well as to drive growth to further enhance stockholder value," concluded Mr. Ahmad.

Utility Outages and Outlook

"Widespread utilities failures in Texas created after a cold front brought record low temperatures, snow and rolling blackouts across the state, caused disruptions for our suppliers, our customers and at our own facilities. Our South Hampton facility resumed operations on February 23rd while our TC facility began resuming operations on March 4th. Within the first quarter, the company is expecting the loss of sales volumes as well as repair costs to ancillary equipment. However, we expect continued growth as the economy recovers from the impacts of the pandemic along with pent-up demand from the first quarter weather outages to result in improved demand as we head into the second quarter," stated Mr. Quarles.

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



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