Exhibit 99.1
FOR IMMEDIATE RELEASE
Rentech Nitrogen Partners, L.P. Announces Results and Cash Distribution for Third Quarter 2014
LOS ANGELES, CA (November 6, 2014) – Rentech Nitrogen Partners, L.P. (NYSE: RNF) today announced financial and operating results for the three and nine months ended September 30, 2014.
D. Hunt Ramsbottom, CEO of Rentech Nitrogen, said, “Third-quarter results were generally in line with our expectations, based on seasonal demand for nitrogen products. We expect results and cash distribution for the fourth quarter to be significantly better than third quarter results, corresponding with fall deliveries. In addition, the outlook for the first half of 2015 looks encouraging for all nitrogen products.”
Mr. Ramsbottom continued, “The restructuring plan at Pasadena has been completed. We completed the twenty percent reduction in workforce and our daily ammonium sulfate production rate is tracking to annualized production in line with our target of 500,000 tons next year.”
“Looking forward, we’re replacing the ammonia synthesis converter in the ammonia plant at the East Dubuque facility that was damaged during the fire last fall. This project is designed to improve plant reliability, increase ammonia production capacity by 17,500 tons annually, and improve natural gas efficiency.”
Revenues for the three months ended September 30, 2014 were $84.2 million, compared to $93.3 million for the same period in the prior year. Revenues for the nine months ended September 30, 2014 were $254.1 million, compared to $256.8 million for the same period in the prior year.
Gross profit for the three months ended September 30, 2014 was $6.7 million, compared to $16.8 million for the same period last year. Gross profit for the nine months ended September 30, 2014 was $48.7 million, compared to $79.4 million for the same period last year.
Adjusted EBITDA for the three months ended September 30, 2014 was $9.1 million. This compares to $16.1 million in the corresponding 2013 period. Adjusted EBITDA for the nine months ended September 30, 2014 was $51.3 million. This compares to $75.1 million in the corresponding 2013 period. A further explanation of Adjusted EBITDA, a non-GAAP financial measure, as used here and throughout this press release appears below.
Net loss for the three months ended September 30, 2014 was $3.1 million, or ($0.08) per basic unit. This compares to a net loss of $22.3 million, or ($0.57) per basic unit, for the same period last year. Net loss was $2.5 million, or ($0.06) per basic unit, for the three months ended September 30, 2014 excluding loss on debt extinguishment. This compares to net income of $7.5 million or $0.19 per basic unit excluding loss on debt extinguishment and Pasadena goodwill impairment for the same period last year.
Net loss for the nine months ended September 30, 2014 was $8.9 million, or ($0.23) per basic unit. This compares to net income of $21.5 million, or $0.54 per basic unit, for the same period last year. Net income was $18.9 million, or $0.49 per basic unit, for the nine months ended September 30, 2014, excluding the Pasadena goodwill impairment, loss on debt extinguishment, and gain on fair value adjustment to earn-out consideration. This compares to $52.6 million, or $1.33 per basic unit, for the same period last year excluding those items.
Three Months Ended September 30, 2014
East Dubuque Facility
Revenues for the three months ended September 30, 2014 were $46.0 million, compared to $50.6 million for the same period last year. The decrease was due to lower deliveries and sales prices of urea ammonium nitrate solution (UAN), partially offset by higher deliveries and sales prices for ammonia. Deliveries of UAN in 2013 occurred earlier than is typical, which pulled revenue from the fourth quarter of 2013 into the third quarter of 2013. Production of ammonia increased after the completion of the ammonia expansion project in December 2013. This additional ammonia available for sale resulted in higher ammonia deliveries during the three and nine months ended September 30, 2014.
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Average sales prices per ton for the three months ended September 30, 2014 were 1% higher for ammonia and relatively flat for UAN, as compared with the same period last year. These two products comprised 80% of the East Dubuque facility’s revenues for the three months ended September 30, 2014 and 87% for the same period last year. The increase in ammonia sales prices was consistent with the increase in global ammonia prices between the two periods. The improvement in global ammonia prices during the three months ended September 30, 2014 was caused by lower supplies of urea from China, geopolitical events resulting in the shutdown of significant nitrogen fertilizer plants in Libya and Ukraine, and the reduction in natural gas supplies in other parts of the world. UAN prices did not benefit from the improvement in the ammonia market.
Gross profit was $15.5 million for the three months ended September 30, 2014; this compares to $25.1 million for the same period last year. Gross profit margin for the three months ended September 30, 2014 was 34%, compared to 50% for the same period last year. The decreases in gross profit and gross margin were primarily due to lower product pricing, and increased costs of natural gas, depreciation and electricity.
Adjusted EBITDA for the three months ended September 30, 2014 for the East Dubuque facility was $18.5 million. This compares to Adjusted EBITDA of $25.8 million in the corresponding period in 2013.
Net income was $14.1 million for the three months ended September 30, 2014, compared to $24.1 million for the same period last year.
Pasadena Facility
Revenues for the three months ended September 30, 2014 were $38.1 million, compared to $42.7 million for the same period last year. Lower sales prices for ammonium sulfate and ammonium thiosulfate, and lower sales volume for sulfuric acid were partially offset by higher sales volumes for ammonium sulfate and ammonium thiosulfate. Production of ammonium sulfate increased after the completion of the debottlenecking project in December 2013. Demand increased due to favorable weather during the planting season and an increase in international orders; increased production enabled additional sales to meet that demand.
Average sales prices per ton decreased by 17% for ammonium sulfate and increased by 10% for sulfuric acid for the three months ended September 30, 2014, as compared with the same period last year. These two products comprised 94% of the Pasadena facility’s revenues for the three months ended September 30, 2014 and 98% for the same period last year. A higher proportion of export sales, priced lower than domestic sales, contributed to the decline in average product price.
Gross loss was $8.8 million for the three months ended September 30, 2014, compared to a gross loss of $8.3 million for the same period last year. Gross loss margin for the three months ended September 30, 2014 was 23% compared to a gross loss margin of 19% for the same period last year. The decreases in gross profit and gross profit margin were primarily due to declines in average sales prices for ammonium sulfate, increases in the unit prices of raw materials, turnaround expenses, and other non-recurring maintenance expenses.
Adjusted EBITDA for the three months ended September 30, 2014 for the Pasadena facility was a loss of $7.7 million. This compares to Adjusted EBITDA loss of $7.8 million in the corresponding period in 2013.
Net loss was $10.2 million for the three months ended September 30, 2014, compared to $40.8 million for the same period last year. Net loss for the three months ended September 30, 2013 includes a loss on goodwill impairment of $30.0 million.
Net loss was $10.7 million for the three months ended September 30, 2013, excluding the Pasadena goodwill impairment.
Nine Months Ended September 30, 2014
East Dubuque Facility
Revenues for the nine months ended September 30, 2014 were $148.5 million, compared to $146.8 million for the same period last year. The increase was due to higher natural gas sales and ammonia sales volumes, partially offset by lower UAN sales volumes and sales prices for ammonia and UAN. Additional ammonia available for sale resulted in higher ammonia deliveries.
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Average sales prices per ton for the nine months ended September 30, 2014 were 19% lower for ammonia and 5% lower for UAN, as compared with the same period last year. These two products comprised 80% of the East Dubuque facility’s revenues for the nine months ended September 30, 2014 and 83% for the same period last year. The decreases in our sales prices for ammonia and UAN were consistent with the decline in global nitrogen fertilizer prices in the earlier portions of the respective periods, partially offset by increases in the three months ended in September of the respective years. These decreases were caused by significantly higher levels of low-priced urea in the global market, particularly from China. Prices were also affected by additional nitrogen fertilizer production brought on line in North America over the last 12 months.
Gross profit was $60.8 million for the nine months ended September 30, 2014, compared to $81.4 million for the same period last year. Gross profit margin for the nine months ended September 30, 2014 was 41%, compared to 55% for the same period last year. The decreases in gross profit and gross margin were primarily due to lower product pricing, and increased costs of natural gas, depreciation and electricity.
Adjusted EBITDA for the nine months ended September 30, 2014 for the East Dubuque facility was $68.8 million. This compares to Adjusted EBITDA of $84.2 million in the corresponding period in 2013.
Net income was $56.9 million for the nine months ended September 30, 2014, compared to $77.4 million for the same period last year.
Pasadena Facility
Revenues for the nine months ended September 30, 2014 were $105.6 million, compared to $110.0 million for the same period last year. Lower sales prices for all products were partially offset by higher ammonium sulfate sales volumes.
Average sales prices per ton decreased by 27% for ammonium sulfate and by 3% for sulfuric acid for the nine months ended September 30, 2014, as compared with the same period last year. These two products comprised 91% of the Pasadena facility’s revenues for each of the nine months ended September 30, 2014 and 2013. A higher proportion of export sales, priced lower than domestic sales, contributed to the decline in average product price.
Gross loss was $12.1 million for the nine months ended September 30, 2014, compared to a gross loss of $2.0 million for the same period last year. Gross loss margin for the nine months ended September 30, 2014 was 12%, compared to a gross loss margin of 2% for the same period last year.
Adjusted EBITDA for the nine months ended September 30, 2014 for the Pasadena facility was a loss of $11.2 million. This compares to Adjusted EBITDA loss of $2.6 million in the corresponding period in 2013.
Net loss was $44.5 million for the nine months ended September 30, 2014, compared to a net loss of $38.9 million for the same period last year. Net loss for the nine months ended September 30, 2014 and 2013 includes a loss on goodwill impairment of $27.2 million and $30.0 million, respectively.
Net loss was $17.3 million and $8.9 million for the nine months ended September 30, 2014 and 2013, respectively, excluding the Pasadena goodwill impairment.
Ammonia Converter Project at East Dubuque
The partnership plans to replace the converter in the ammonia plant at the East Dubuque facility, which is expected to increase production and improve both the efficiency and reliability of the plant.
The converter was damaged during the fire last fall, then repaired and returned to service. The plant is currently operating near capacity, but it is possible that additional repairs will be needed before the converter is replaced at the end of 2016. The plant was down for 7 days in October to repair a leaking flange on the converter.
The new ammonia converter will be designed to increase annual ammonia production capacity by approximately 17,500 tons, bringing total annual ammonia capacity to approximately 390,000 tons. The project’s current estimated return is over 20%.
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Outlook
Fourth Quarter 2014 Guidance
The partnership provided the following forecast for product deliveries, consumption of inputs and maintenance capital expenditures for the fourth quarter of 2014.
| | | | |
Forecasted Deliveries (in thousand tons) | | | | |
East Dubuque | | | | |
Ammonia | | | 64 | |
UAN | | | 65 | |
Urea - liquid and granular | | | 12 | |
Nitric acid | | | 2 | |
Pasadena | | | | |
Ammonium sulfate | | | 112 | |
Sulfuric acid | | | 27 | |
Ammonium thiosulfate | | | 7 | |
| |
Forecasted Consumption in Deliveries | | | | |
East Dubuque | | | | |
Natural gas (in million MMBtus) | | | 3.6 | |
Pasadena (in thousand tons) | | | | |
Ammonia | | | 29 | |
Sulfur | | | 38 | |
Sulfuric acid | | | 111 | |
| |
Maintenance Capital Expenditures (in millions)1 | | $ | 3.9 | |
| 1 | Reflects only maintenance capital expenditures to be funded by cash generated by operations. |
Full Year 2014 Guidance
Adjusted EBITDA for the East Dubuque and Pasadena facilities is expected to be approximately $85 million in 2014, and approximately $75 million for the partnership, which reflects partnership-level expenses. The guidance reflects an outage for 7 days during the fourth quarter to repair a leaking flange on the ammonia converter at the East Dubuque facility.
Rentech Nitrogen provided the following updated forecast for product deliveries, consumption of inputs and maintenance capital expenditures for the full year of 2014.
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| | | | |
Forecasted Deliveries (in thousand tons) | | | | |
East Dubuque | | | | |
Ammonia | | | 170 | |
UAN | | | 279 | |
Urea - liquid and granular | | | 52 | |
Nitric acid | | | 12 | |
Pasadena | | | | |
Ammonium sulfate | | | 570 | |
Sulfuric acid | | | 88 | |
Ammonium thiosulfate | | | 62 | |
| |
Forecasted Consumption in Deliveries | | | | |
East Dubuque | | | | |
Natural gas (in million MMBtus) | | | 12 | |
Pasadena (in thousand tons) | | | | |
Ammonia | | | 152 | |
Sulfur | | | 186 | |
Sulfuric acid | | | 516 | |
| |
Maintenance Capital Expenditures (in millions)1 | | $ | 17.5 | |
| 1 | Reflects only maintenance capital expenditures to be funded by cash generated by operations. |
2014 Progress
The partnership provided the following key operating metrics, progress against its forecasted product deliveries, and consumption of inputs for 2014 for the East Dubuque and Pasadena facilities:
| | | | |
| | | Locked-in or Delivered | |
East Dubuque Facility | | | | |
| |
Deliveries1 | | | | |
Ammonia | | | | |
Tons | | | 155,000 or 92 | % |
Average price | | | $550 | |
UAN | | | | |
Tons | | | 279,000 or 100 | % |
Average price | | | $279 | |
Natural Gas in Cost of Sales1
(million MMBtus) | | | 12.0 or 100 | % |
Average cost per million MMBtus
(including transportation costs) | | | $5.02 | |
| |
Pasadena Facility | | | | |
| |
Deliveries and Commitments1 | | | | |
Ammonium sulfate | | | | |
Tons | |
| 491,000 or
86 |
% |
Average price | | | $198 | |
| 1 | Through September 30, 2014. |
Third Quarter Cash Available for Distribution
Cash available for distribution for the quarter was $1.9 million, or $0.05 per unit. The distribution will be paid on November 28, 2014 to unit holders of record as of November 21, 2014. The calculation of the cash available for distribution appears below in this press release.
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Conference Call with Management
Rentech Nitrogen will hold a conference call today, November 6, 2014 at 1:30 p.m. PST, during which senior management will review the partnership’s financial results for this period and provide an update on the business. Callers may listen to the live presentation, which will be followed by a question and answer segment, by dialing 800-774-6070 or 630-691-2753 and entering the pass code 9432139#. An audio webcast of the call will be available atwww.rentechnitrogen.com within the Investor Relations portion of the site under the Presentations section. A replay will be available by audio webcast and teleconference from 4:00 p.m. PST on November 6 through 11:59 p.m. PST on November 6. The replay teleconference will be available by dialing 888-843-7419 or 630-652-3042 and entering the audience passcode 9432139#.
Key Operating Statistics:
| | | | | | | | | | | | | | | | |
| | | For the Three Months
Ended September 30, | | | For the Nine Months
Ended September 30, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Production Tons (in thousands) | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | 75 | | | | 77 | | | | 238 | | | | 227 | |
Ammonia Available for Sale (included in line above) | | | 40 | | | | 32 | | | | 125 | | | | 102 | |
UAN | | | 63 | | | | 86 | | | | 213 | | | | 236 | |
Other Products (excludes CO2) | | | 66 | | | | 85 | | | | 217 | | | | 238 | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | | 121 | | | | 122 | | | | 411 | | | | 374 | |
Sulfuric Acid | | | 71 | | | | 113 | | | | 300 | | | | 367 | |
Ammonium Thiosulfate | | | 10 | | | | 12 | | | | 45 | | | | 43 | |
Delivered Tons (in thousands) | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | 27 | | | | 24 | | | | 106 | | | | 76 | |
UAN | | | 83 | | | | 117 | | | | 214 | | | | 237 | |
Other Products (excludes CO2) | | | 16 | | | | 14 | | | | 49 | | | | 49 | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | | 172 | | | | 162 | | | | 458 | | | | 330 | |
Sulfuric Acid | | | 20 | | | | 39 | | | | 61 | | | | 119 | |
Ammonium Thiosulfate | | | 13 | | | | 1 | | | | 56 | | | | 41 | |
| | | | |
Average Sales Price per Ton | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | $ | 537 | | | $ | 530 | | | $ | 545 | | | $ | 675 | |
UAN | | $ | 268 | | | $ | 269 | | | $ | 283 | | | $ | 299 | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | $ | 197 | | | $ | 238 | | | $ | 197 | | | $ | 269 | |
| | | | |
Input Costs | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Natural Gas | | | | | | | | | | | | | | | | |
Natural Gas Used in Production (Thousand MMBtus) | | | 2,623 | | | | 2,754 | | | | 8,511 | | | | 8,238 | |
Average Natural Gas Cost per MMBtu, including transportation cost | | $ | 4.91 | | | $ | 4.16 | | | $ | 5.02 | | | $ | 4.17 | |
Natural Gas Cost in Cost of Sales (Thousand MMBtus) | | | 2,800 | | | | 2,873 | | | | 8,421 | | | | 7,290 | |
Average Natural Gas Cost per MMBtu, including transportation cost | | $ | 4.87 | | | $ | 4.29 | | | $ | 5.05 | | | $ | 4.15 | |
| | | | |
Input Costs | | | | | | | | | | | | | | | | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | | | | | | | | | | | | | | |
Ammonia Used in Production (Thousand Tons) | | | 32 | | | | 32 | | | | 111 | | | | 100 | |
Ammonia in Cost of Sales (Thousand Tons) | | | 46 | | | | 41 | | | | 125 | | | | 89 | |
Sulfur | | | | | | | | | | | | | | | | |
Sulfur Used in Production (Thousand Tons) | | | 38 | | | | 40 | | | | 122 | | | | 132 | |
Sulfur in Cost of Sales (Thousand Tons) | | | 51 | | | | 53 | | | | 145 | | | | 131 | |
On-Stream Rates1: | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | 89.1 | % | | | 100.0 | % | | | 96.3 | % | | | 100.0 | % |
UAN | | | 90.2 | % | | | 100.0 | % | | | 96.0 | % | | | 99.3 | % |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | | 85.7 | % | | | 79.8 | % | | | 82.9 | % | | | 81.8 | % |
Sulfuric Acid | | | 59.6 | % | | | 77.9 | % | | | 85.6 | % | | | 90.8 | % |
| 1 | The on-stream factors for the ammonia, UAN, ammonium sulfate and sulfuric acid plants equal the total days the applicable plant operated in any given period, divided by the total days in that period. |
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Rentech Nitrogen Partners, L.P.
Consolidated Statements of Operations
(Amounts in Thousands, Except per Unit Data)
| | | | | | | | | | | | | | | | |
| | | For the Three Months
Ended September 30, | | | For the Nine Months
Ended September 30, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | (unaudited) | | | (unaudited) | |
Revenues | | $ | 84,163 | | | $ | 93,279 | | | $ | 254,052 | | | $ | 256,799 | |
Cost of Sales | | | 77,475 | | | | 76,459 | | | | 205,381 | | | | 177,412 | |
| | | | | | | | | | | | | | | | |
Gross Profit | | | 6,688 | | | | 16,820 | | | | 48,671 | | | | 79,387 | |
Operating Expenses | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | | 3,819 | | | | 4,080 | | | | 13,601 | | | | 13,722 | |
Depreciation and amortization | | | 384 | | | | 1,018 | | | | 1,092 | | | | 2,874 | |
Pasadena goodwill impairment | | | — | | | | 30,029 | | | | 27,202 | | | | 30,029 | |
Other expense | | | 304 | | | | 28 | | | | 526 | | | | 36 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 4,507 | | | | 35,155 | | | | 42,421 | | | | 46,661 | |
| | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | 2,181 | | | | (18,335 | ) | | | 6,250 | | | | 32,726 | |
Other Income (Expense), Net | | | | | | | | | | | | | | | | |
Interest expense, net | | | (4,624 | ) | | | (3,996 | ) | | | (14,437 | ) | | | (9,725 | ) |
Loss on debt extinguishment | | | (635 | ) | | | — | | | | (635 | ) | | | (6,001 | ) |
Gain on fair value adjustment to earn-out consideration | | | — | | | | 309 | | | | — | | | | 4,920 | |
Other expense, net | | | — | | | | — | | | | — | | | | (7 | ) |
| | | | | | | | | | | | | | | | |
Total Other Expense, Net | | | (5,259 | ) | | | (3,687 | ) | | | (15,072 | ) | | | (10,813 | ) |
| | | | | | | | | | | | | | | | |
Income (Loss) Before Income Taxes | | | (3,078 | ) | | | (22,022 | ) | | | (8,822 | ) | | | 21,913 | |
Income tax expense | | | 27 | | | | 233 | | | | 82 | | | | 438 | |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | | (3,105 | ) | | $ | (22,255 | ) | | $ | (8,904 | ) | | $ | 21,475 | |
| | | | | | | | | | | | | | | | |
Basic and Diluted Net Income (Loss) per Common Unit Allocated to Common Unit Holders | | $ | (0.08 | ) | | $ | (0.57 | ) | | $ | (0.23 | ) | | $ | 0.54 | |
| | | | | | | | | | | | | | | | |
Weighted-Average Shares Used to Compute Net Income (Loss) per Common Share: | | | | | | | | | | | | | | | | |
Basic | | | 38,905 | | | | 38,849 | | | | 38,895 | | | | 38,843 | |
| | | | | | | | | | | | | | | | |
Diluted | | | 38,905 | | | | 38,849 | | | | 38,895 | | | | 38,934 | |
| | | | | | | | | | | | | | | | |
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Rentech Nitrogen Partners, L.P.
Statements of Operations by Business Segment
(Stated in Thousands)
| | | | | | | | | | | | | | | | |
| | | For the Three Months
Ended September 30, | | | For the Nine Months
Ended September 30, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | (unaudited) | | | (unaudited) | |
Revenues | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 46,021 | | | $ | 50,572 | | | $ | 148,455 | | | $ | 146,838 | |
Pasadena | | | 38,142 | | | | 42,707 | | | | 105,597 | | | | 109,961 | |
| | | | | | | | | | | | | | | | |
Total Revenues | | $ | 84,163 | | | $ | 93,279 | | | $ | 254,052 | | | $ | 256,799 | |
| | | | | | | | | | | | | | | | |
Gross Profit (Loss) | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 15,466 | | | $ | 25,114 | | | $ | 60,816 | | | $ | 81,353 | |
Pasadena | | | (8,778 | ) | | | (8,294 | ) | | | (12,145 | ) | | | (1,966 | ) |
| | | | | | | | | | | | | | | | |
Total Gross Profit | | $ | 6,688 | | | $ | 16,820 | | | $ | 48,671 | | | $ | 79,387 | |
| | | | | | | | | | | | | | | | |
Selling, General and Administrative Expenses | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 956 | | | $ | 981 | | | $ | 3,177 | | | $ | 3,423 | |
Pasadena | | | 1,071 | | | | 1,227 | | | | 4,147 | | | | 3,811 | |
| | | | | | | | | | | | | | | | |
Total Segment Selling, General and Administrative Expenses | | $ | 2,027 | | | $ | 2,208 | | | $ | 7,324 | | | $ | 7,234 | |
| | | | | | | | | | | | | | | | |
Depreciation and Amortization | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 47 | | | $ | 46 | | | $ | 122 | | | $ | 152 | |
Pasadena | | | 337 | | | | 972 | | | | 970 | | | | 2,722 | |
| | | | | | | | | | | | | | | | |
Total Depreciation and Amortization Recorded in Operating Expenses | | $ | 384 | | | $ | 1,018 | | | $ | 1,092 | | | $ | 2,874 | |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 14,139 | | | $ | 24,069 | | | $ | 56,926 | | | $ | 77,383 | |
Pasadena | | | (10,213 | ) | | | (40,765 | ) | | | (44,545 | ) | | | (38,915 | ) |
| | | | | | | | | | | | | | | | |
Total Segment Net Income (Loss) | | $ | 3,926 | | | $ | (16,696 | ) | | $ | 12,381 | | | $ | 38,468 | |
| | | | | | | | | | | | | | | | |
Reconciliation of Segment Net Income (Loss) to Consolidated Net Income (Loss) | | | | | | | | | | | | | | | | |
Segment net income (loss) | | $ | 3,926 | | | $ | (16,696 | ) | | $ | 12,381 | | | $ | 38,468 | |
Partnership and unallocated expenses recorded as selling, general and administrative expenses | | | (1,792 | ) | | | (1,872 | ) | | | (6,277 | ) | | | (6,488 | ) |
Partnership and unallocated income (expense) recorded as other income (expense) | | | (635 | ) | | | 309 | | | | (635 | ) | | | (1,081 | ) |
Unallocated interest expense and loss on interest rate swaps | | | (4,604 | ) | | | (3,996 | ) | | | (14,373 | ) | | | (9,726 | ) |
Income tax benefit | | | — | | | | — | | | | — | | | | 302 | |
| | | | | | | | | | | | | | | | |
Consolidated Net Income (Loss) | | $ | (3,105 | ) | | $ | (22,255 | ) | | $ | (8,904 | ) | | $ | 21,475 | |
| | | | | | | | | | | | | | | | |
Rentech Nitrogen Partners, L.P.
Selected Balance Sheet Data
(Stated in Thousands)
| | | | | | | | |
| | | As of
September 30, 2014 | | | As of
December 31, 2013 | |
| | | (unaudited) | |
Cash | | $ | 44,061 | | | $ | 34,060 | |
Working capital | | | 1,190 | | | | 21,188 | |
Construction in progress | | | 65,633 | | | | 33,531 | |
Total assets | | | 424,486 | | | | 406,344 | |
Total debt | | | 320,000 | | | | 320,000 | |
Total Partners’ capital | | | 5,150 | | | | 23,125 | |
Page 8 of 13
Disclosure Regarding Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income (loss) plus interest expense and other financing costs, loss on debt extinguishment, income tax expense, depreciation and amortization, Pasadena goodwill impairment and fair value adjustment to earn-out consideration, net of loss on interest rate swaps. As used in this table, we calculate cash available for distribution as Adjusted EBITDA plus non-cash compensation expense minus the sum of maintenance capital expenditures not funded by financing proceeds, net interest expense and cash reserved for working capital purposes. Adjusted EBITDA and cash available for distribution are used as supplemental financial measures by management and by external users of our financial statements, such as investors and commercial banks, to assess:
| | • | | the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; and |
| | • | | our operating performance and return on invested capital compared to those of other publicly traded limited partnerships and other public companies, without regard to financing methods and capital structure. |
Adjusted EBITDA and cash available for distribution should not be considered alternatives to any measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and cash available for distribution may have material limitations as performance measures because they exclude items that are necessary elements of our costs and operations. In addition, Adjusted EBITDA and cash available for distribution presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
Net income (loss) excluding loss on goodwill impairment, loss on debt extinguishment and loss on fair value adjustment to earn-out contingent consideration is included to provide management and investors with net income results for Rentech Nitrogen that are more easily compared to the prior year period.
The table below reconciles Adjusted EBITDA, which is a non-GAAP financial measure, to net income (loss) for the nine months ended September 30, 2014. It also reconciles cash available for distribution to Adjusted EBITDA, both of which are non-GAAP financial measures, for the nine months ended September 30, 2014.
| | | | | | | | | | | | | | | | |
| | | For the Nine Months Ended September 30, 2014 | |
(Stated in thousands, except per unit data) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | 56,926 | | | $ | (44,545 | ) | | $ | (21,285 | ) | | $ | (8,904 | ) |
Plus: Net interest expense | | | 64 | | | | — | | | | 14,373 | | | | 14,437 | |
Plus: Income tax expense | | | 1 | | | | 81 | | | | — | | | | 82 | |
Plus: Loss on debt extinguishment | | | — | | | | — | | | | 635 | | | | 635 | |
Plus: Pasadena goodwill impairment | | | — | | | | 27,202 | | | | — | | | | 27,202 | |
Plus: Depreciation and amortization | | | 11,777 | | | | 6,026 | | | | — | | | | 17,803 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 68,768 | | | $ | (11,236 | ) | | $ | (6,277 | ) | | $ | 51,255 | |
Plus: Non-cash compensation expense | | | — | | | | — | | | | 1,159 | | | | 1,159 | |
Less: Maintenance capital expenditures | | | (6,199 | ) | | | (21,424 | ) | | | — | | | | (27,623 | ) |
Plus: Portion of capital expenditures financed | | | — | | | | 14,019 | | | | — | | | | 14,019 | |
Less: Net interest expense | | | (64 | ) | | | — | | | | (14,373 | ) | | | (14,437 | ) |
Less: Cash reserved for working capital purposes | | | — | | | | — | | | | (14,261 | ) | | | (14,261 | ) |
| | | | | | | | | | | | | | | | |
Cash available for distribution | | $ | 62,505 | | | $ | (18,641 | ) | | $ | (33,752 | ) | | $ | 10,112 | |
| | | | | | | | | | | | | | | | |
Cash available for distribution, per unit | | $ | 1.61 | | | $ | (0.48 | ) | | $ | (0.87 | ) | | $ | 0.26 | |
| | | | | | | | | | | | | | | | |
Common units outstanding | | | 38,905 | | | | 38,905 | | | | 38,905 | | | | 38,905 | |
Page 9 of 13
The table below reconciles Adjusted EBITDA to net income (loss) for the nine months ended September 30, 2013.
| | | | | | | | | | | | | | | | |
| | | For the Nine Months Ended September 30, 2013 | |
(Stated in thousands, except per unit data) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | 77,383 | | | $ | (38,915 | ) | | $ | (16,993 | ) | | $ | 21,475 | |
Plus: Net interest expense | | | — | | | | 6 | | | | 9,719 | | | | 9,725 | |
Plus: Pasadena goodwill impairment | | | — | | | | 30,029 | | | | — | | | | 30,029 | |
Plus: Loss on debt extinguishment | | | — | | | | — | | | | 6,001 | | | | 6,001 | |
Plus: Loss on interest rate swaps | | | — | | | | — | | | | 7 | | | | 7 | |
Plus: Income tax (benefit) expense | | | 360 | | | | 380 | | | | (302 | ) | | | 438 | |
Plus: Depreciation and amortization | | | 6,500 | | | | 5,881 | | | | — | | | | 12,381 | |
Less: Gain on fair value adjustment to earn-out consideration | | | — | | | | — | | | | (4,920 | ) | | | (4,920 | ) |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 84,243 | | | $ | (2,619 | ) | | $ | (6,488 | ) | | $ | 75,136 | |
| | | | | | | | | | | | | | | | |
The table below reconciles Adjusted EBITDA to net income (loss) for the three months ended September 30, 2014.
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended September 30, 2014 | |
(Stated in thousands, except per unit data) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | 14,139 | | | $ | (10,213 | ) | | $ | (7,031 | ) | | $ | (3,105 | ) |
Plus: Net interest expense | | | 20 | | | | — | | | | 4,604 | | | | 4,624 | |
Plus: Income tax expense | | | — | | | | 27 | | | | — | | | | 27 | |
Plus: Loss on debt extinguishment | | | — | | | | — | | | | 635 | | | | 635 | |
Plus: Depreciation and amortization | | | 4,380 | | | | 2,490 | | | | — | | | | 6,870 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 18,539 | | | $ | (7,696 | ) | | $ | (1,792 | ) | | $ | 9,051 | |
Plus: Non-cash compensation expense | | | — | | | | — | | | | 284 | | | | 284 | |
Less: Maintenance capital expenditures | | | (2,124 | ) | | | (9,461 | ) | | | — | | | | (11,585 | ) |
Plus: Portion of capital expenditures financed | | | — | | | | 3,653 | | | | — | | | | 3,653 | |
Less: Net interest expense | | | (20 | ) | | | — | | | | (4,604 | ) | | | (4,624 | ) |
Less: Cash reserved for working capital purposes | | | — | | | | — | | | | 5,166 | | | | 5,166 | |
| | | | | | | | | | | | | | | | |
Cash available for distribution | | $ | 16,395 | | | $ | (13,504 | ) | | $ | (946 | ) | | $ | 1,945 | |
| | | | | | | | | | | | | | | | |
Cash available for distribution, per unit | | $ | 0.42 | | | $ | (0.35 | ) | | $ | (0.02 | ) | | $ | 0.05 | |
| | | | | | | | | | | | | | | | |
Common units outstanding | | | 38,905 | | | | 38,905 | | | | 38,905 | | | | 38,905 | |
The table below reconciles Adjusted EBITDA to net income (loss) for the three months ended September 30, 2013.
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended September 30, 2013 | |
(Stated in thousands, except per unit data) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | 24,069 | | | $ | (40,765 | ) | | $ | (5,559 | ) | | $ | (22,255 | ) |
Plus: Net interest expense | | | — | | | | — | | | | 3,996 | | | | 3,996 | |
Plus: Pasadena goodwill impairment | | | — | | | | 30,029 | | | | — | | | | 30,029 | |
Plus: Income tax (benefit) expense | | | (9 | ) | | | 242 | | | | — | | | | 233 | |
Plus: Depreciation and amortization | | | 1,712 | | | | 2,674 | | | | — | | | | 4,386 | |
Less: Gain on fair value adjustment to earn-out consideration | | | — | | | | — | | | | (309 | ) | | | (309 | ) |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 25,772 | | | $ | (7,820 | ) | | $ | (1,872 | ) | | $ | 16,080 | |
| | | | | | | | | | | | | | | | |
Page 10 of 13
The table below reconciles loss attributable to Rentech Nitrogen excluding loss on debt extinguishment for the three months ended September 30, 2014. The table also reconciles net loss attributable to Rentech Nitrogen excluding Pasadena goodwill impairment and gain on fair value adjustment to earn-out consideration for the three months ended September 30, 2013.
| | | | | | | | |
(Stated in thousands, except per unit data) | | For the Three Months
Ended September 30, 2014 | | | For the Three Months
Ended September 30, 2013 | |
Net loss attributable to common unit holders | | $ | (3,105 | ) | | $ | (22,255 | ) |
| | |
Pasadena goodwill impairment | | | — | | | | 30,029 | |
Loss on debt extinguishment | | | 635 | | | | — | |
Gain on fair value adjustment to earn-out consideration | | | — | | | | (309 | ) |
| | | | | | | | |
Net income (loss) attributable to common unit holders excluding Pasadena goodwill impairment, loss on debt extinguishment and gain on fair value adjustment to earn-out consideration | | $ | (2,470 | ) | | $ | 7,465 | |
| | | | | | | | |
Net loss per unit attributable to common unit holders | | $ | (0.08 | ) | | $ | (0.57 | ) |
| | |
Per unit Pasadena goodwill impairment | | | — | | | | 0.77 | |
Per unit loss on debt extinguishment | | | 0.02 | | | | — | |
| | | — | | | | (0.01 | ) |
| | | | | | | | |
Net income (loss) per unit attributable to common unit holders excluding Pasadena goodwill impairment, loss on debt extinguishment and gain on fair value adjustment to earn-out consideration | | $ | (0.06 | ) | | $ | 0.19 | |
| | | | | | | | |
Weighted-Average Common Units Outstanding | | | 38,905 | | | | 38,849 | |
The table below reconciles net income (loss) attributable to Rentech Nitrogen excluding Pasadena goodwill impairment, loss on debt extinguishment and gain on fair value adjustment to earn-out consideration for the nine months ended September 30, 2014 and September 30, 2013.
| | | | | | | | |
(Stated in thousands, except per unit data) | | For the Nine Months
Ended September 30, 2014 | | | For the Nine Months
Ended September 30, 2013 | |
Net income (loss) attributable to common unit holders | | $ | (8,904 | ) | | $ | 21,475 | |
| | |
Pasadena goodwill impairment | | | 27,202 | | | | 30,029 | |
Loss on debt extinguishment | | | 635 | | | | 6,001 | |
Gain on fair value adjustment to earn-out consideration | | | — | | | | (4,920 | ) |
| | | | | | | | |
Net income attributable to common unit holders excluding Pasadena goodwill impairment, loss on debt extinguishment and gain on fair value adjustment to earn-out consideration | | $ | 18,933 | | | $ | 52,585 | |
| | | | | | | | |
Net income (loss) per unit attributable to common unit holders | | $ | (0.23 | ) | | $ | 0.54 | |
| | |
Per unit Pasadena goodwill impairment | | | 0.70 | | | | 0.77 | |
Per unit loss on debt extinguishment | | | 0.02 | | | | 0.15 | |
Per unit gain on fair value adjustment to earn-out consideration | | | — | | | | (0.13 | ) |
| | | | | | | | |
Net income per unit attributable to common unit holders excluding Pasadena goodwill impairment, loss on debt extinguishment and gain on fair value adjustment to earn-out consideration | | $ | 0.49 | | | $ | 1.33 | |
| | | | | | | | |
Weighted-Average Common Units Outstanding | | | 38,895 | | | | 38,843 | |
Page 11 of 13
The table below reconciles net loss attributable to the Pasadena facility excluding Pasadena goodwill impairment for the three months ended September 30, 2013.
| | | | |
(Stated in thousands, except per unit data) | | For the Three Months
Ended September 30, 2013 | |
Net loss for Pasadena | | $ | (40,765 | ) |
| |
Pasadena goodwill impairment | | | 30,029 | |
| | | | |
Net loss attributable to common unit holders excluding Pasadena goodwill impairment | | $ | (10,736 | ) |
| | | | |
The table below reconciles net loss attributable to the Pasadena facility excluding Pasadena goodwill impairment for the nine months ended September 30, 2014 and September 30, 2013.
| | | | | | | | |
(Stated in thousands, except per unit data) | | For the Nine Months
Ended September 30, 2014 | | | For the Nine Months
Ended September 30, 2013 | |
Net loss for Pasadena | | $ | (44,545 | ) | | $ | (38,915 | ) |
| | |
Pasadena goodwill impairment | | | 27,202 | | | | 30,029 | |
| | | | | | | | |
Net loss attributable to common unit holders excluding Pasadena goodwill impairment | | $ | (17,343 | ) | | $ | (8,886 | ) |
| | | | | | | | |
Net loss per unit for Pasadena | | $ | (1.15 | ) | | $ | (1.00 | ) |
The table below reconciles forecasted Adjusted EBITDA to operating income (loss) for the twelve months ending December 31, 2014 for the East Dubuque and Pasadena facilities combined, and for the partnership.
| | | | | | | | | | | | |
| | | For the Twelve Months Ending December 31, 2014 | |
(Stated in millions) | | East Dubuque &
Pasadena
Facilities | | | Partnership
Level | | | Consolidated | |
| | | (Unaudited) | |
Operating income (loss)1 | | $ | 60 | | | $ | (10 | ) | | $ | 50 | |
Plus: Depreciation and amortization | | | 25 | | | | — | | | | 25 | |
| | | | | | | | | | | | |
Adjusted EBITDA | | $ | 85 | | | $ | (10 | ) | | $ | 75 | |
| | | | | | | | | | | | |
| 1 | Excludes the impact of the impairment related to goodwill at Pasadena facility. |
About Rentech Nitrogen, L.P.
Rentech Nitrogen (www.rentechnitrogen.com) was formed by Rentech, Inc. to own, operate and expand its nitrogen fertilizer business. Rentech Nitrogen’s assets consist of two fertilizer production facilities owned by its operating subsidiaries. The East Dubuque facility is located in the northwestern corner of Illinois, and uses natural gas as a feedstock to produce primarily anhydrous ammonia and UAN solution for sale to customers in the Mid Corn Belt. The Pasadena facility is located in Pasadena, Texas, along the Houston Ship Channel; it uses ammonia and sulfur as feedstocks to produce ammonium sulfate and ammonium thiosulfate fertilizers, and sulfuric acid. Rentech Nitrogen is the largest producer of synthetic granulated ammonium sulfate fertilizer in North America, with sales in the United States and internationally.
Page 12 of 13
Forward-Looking Statements
This press release contains forward-looking statements about matters such as: our forecasts for 2014; the expected benefits of the planned ammonia converter project at our East Dubuque facility; the outlook for our nitrogen fertilizer businesses; and trends in the pricing and demand for our nitrogen fertilizer products. These statements are based on management’s current expectations. Actual results may differ materially as a result of various risks and uncertainties. Other factors that could cause actual results to differ from those reflected in the forward-looking statements are set forth in Rentech Nitrogen’s prior press releases and periodic public filings with the Securities and Exchange Commission, which are available on Rentech Nitrogen’s website atwww.rentechnitrogen.com. The forward-looking statements in this press release are made as of the date of this press release. Rentech Nitrogen does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.
Qualified Notice to Nominees and Brokers
This release is intended to serve as a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b). Please note that 100 percent of Rentech Nitrogen’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, Rentech Nitrogen’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.
Source: Rentech Nitrogen Partners, L.P.
Rentech Nitrogen Partners, L.P.
Julie Dawoodjee Cafarella
Vice president of Investor Relations and Communications
310-571-9800
ir@rnp.net
Page 13 of 13
