Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 04, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TRECORA RESOURCES | ||
Entity Central Index Key | 0000007039 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 254 | ||
Entity Common Stock, Shares Outstanding | 24,686,830 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Document Period End Date | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 6,735 | $ 3,028 |
Trade receivables, net (Note 5) | 27,112 | 25,779 |
Inventories (Note 7) | 16,539 | 18,450 |
Prepaid expenses and other assets (Note 6) | 4,664 | 3,645 |
Taxes receivable | 182 | 5,584 |
Total current assets | 55,232 | 56,486 |
PLANT, PIPELINE, AND EQUIPMENT – AT COST | 268,419 | 245,761 |
LESS ACCUMULATED DEPRECIATION | (73,762) | (63,240) |
PLANT, PIPELINE, AND EQUIPMENT, NET | 194,657 | 182,521 |
GOODWILL (Note 9) | 21,798 | 21,798 |
OTHER INTANGIBLE ASSETS, net (Note 9) | 18,947 | 20,808 |
INVESTMENT IN AMAK (Note 10) | 38,746 | 45,125 |
MINERAL PROPERTIES IN THE UNITED STATES (Note 11) | 588 | 588 |
TOTAL ASSETS | 329,968 | 327,326 |
CURRENT LIABILITIES | ||
Accounts payable | 19,106 | 18,347 |
Accrued liabilities (Note 13) | 5,439 | 3,961 |
Current portion of post-retirement benefit (Note 22) | 19 | 305 |
Current portion of long-term debt (Note 12) | 4,194 | 8,061 |
Current portion of other liabilities | 733 | 870 |
Total current liabilities | 29,491 | 31,544 |
LONG-TERM DEBT, net of current portion (Note 12) | 98,288 | 91,021 |
POST- RETIREMENT BENEFIT, net of current portion (Note 22) | 358 | 897 |
OTHER LIABILITIES , net of current portion | 994 | 1,611 |
DEFERRED INCOME TAXES (Note 16) | 15,676 | 17,242 |
Total liabilities | 144,807 | 142,315 |
COMMITMENTS AND CONTINGENCIES (Note 14) | ||
EQUITY | ||
Common Stock ‑ authorized 40 million shares of $.10 par value; issued 24.6 and 24.5 million in 2018 and 2017, respectively, and outstanding 24.5 and 24.3 million in 2018 and 2017, respectively | 2,463 | 2,451 |
Additional Paid-in Capital | 58,294 | 56,012 |
Common Stock in Treasury, at cost 0.1 million and 0.2 million shares in 2018 and 2017, respectively | (8) | (196) |
Retained Earnings | 124,123 | 126,455 |
Total Trecora Resources Stockholders' Equity | 184,872 | 184,722 |
Noncontrolling interest | 289 | 289 |
Total equity | 185,161 | 185,011 |
TOTAL LIABILITIES AND EQUITY | $ 329,968 | $ 327,326 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares issued (in shares) | 24,600,000 | 24,500,000 |
Common stock, shares outstanding (in shares) | 24,500,000 | 24,300,000 |
Treasury stock (in shares) | 100,000 | 200,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Revenues | $ 287,932 | $ 245,143 | $ 212,399 |
Operating costs and expenses | |||
Cost of specialty petrochemical, product sales, and processing (including depreciation and amortization of $13,618, $10,089, and $9,016, respectively) | 260,114 | 203,582 | 172,497 |
Gross Profit | 27,818 | 41,561 | 39,902 |
General and Administrative Expenses | |||
General and administrative | 22,396 | 22,587 | 20,434 |
Restructuring and severance (Note 21) | 2,347 | 0 | 0 |
Depreciation | 740 | 872 | 761 |
Total General and Administrative Expenses | 25,483 | 23,459 | 21,195 |
Operating income (loss) | 2,335 | 18,102 | 18,707 |
Other income (expense) | |||
Interest expense | (4,100) | (2,931) | (1,985) |
Loss on extinguishment of debt | (315) | 0 | 0 |
Bargain purchase gain from acquisition (Note 3) | 0 | 0 | 11,549 |
Equity in losses of AMAK (Note 10) | (901) | (4,261) | (1,479) |
Gain from additional equity issuance by AMAK (Note 10) | 0 | 0 | 3,168 |
Miscellaneous expense | (158) | (60) | (28) |
Total other income (expense) | (5,474) | (7,252) | 11,225 |
Income (loss) before income tax expense | (3,139) | 10,850 | 29,932 |
Income tax benefit (expense) | 807 | 7,159 | (10,504) |
Net income (loss) attributable to Trecora Resources | $ (2,332) | $ 18,009 | $ 19,428 |
Net income (loss) per common share | |||
Basic earnings (loss) per share (in dollars per share) | $ (0.10) | $ 0.74 | $ 0.80 |
Diluted earnings (loss) per share (in dollars per share) | $ (0.10) | $ 0.72 | $ 0.78 |
Weighted average number of common shares outstanding | |||
Basic (in shares) | 24,438 | 24,294 | 24,284 |
Diluted (in shares) | 24,438 | 25,129 | 24,982 |
Specialty petrochemical and product sales | |||
Revenues | |||
Revenues | $ 269,780 | $ 227,334 | $ 193,581 |
Processing fees | |||
Revenues | |||
Revenues | $ 18,152 | $ 17,809 | $ 18,818 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Costs and Expenses [Abstract] | |||
Depreciation and amortization included in the cost of specialty petrochemical, product sales, and processing | $ 13,618 | $ 10,089 | $ 9,016 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Trecora Resources | Noncontrolling Interest |
Balance (in shares) at Dec. 31, 2015 | 24,158,000 | ||||||
Balance at Dec. 31, 2015 | $ 142,385 | $ 2,416 | $ 50,662 | $ 0 | $ 89,018 | $ 142,096 | $ 289 |
Stock options | |||||||
Issued to Directors | 173 | 173 | 173 | ||||
Issued to Employees | 1,234 | 1,234 | 1,234 | ||||
Issued to Former Director | 48 | 48 | 48 | ||||
Restricted common stock | |||||||
Issued to Directors | 254 | 254 | 254 | ||||
Issued to Employees | 783 | 783 | 783 | ||||
Common stock | |||||||
Issued to Directors (in shares) | 13,000 | ||||||
Issued to Directors | 60 | $ 2 | 58 | 60 | |||
Issued to Employees (in shares) | 51,000 | ||||||
Issued to Employees | 11 | $ 3 | (8) | 16 | 11 | ||
Stock Exchange (see Notes 10 & 18) | 0 | ||||||
Treasury stock transferred from TOCCO to TREC | 0 | $ 30 | 270 | (300) | |||
Net Income (Loss) | 19,428 | 19,428 | 19,428 | ||||
Balance (in shares) at Dec. 31, 2016 | 24,222,000 | ||||||
Balance at Dec. 31, 2016 | 164,376 | $ 2,451 | 53,474 | (284) | 108,446 | 164,087 | 289 |
Stock options | |||||||
Issued to Directors | 100 | 100 | 100 | ||||
Issued to Employees | 1,171 | 1,171 | 1,171 | ||||
Restricted common stock | |||||||
Issued to Directors | 310 | 310 | 310 | ||||
Issued to Employees | 1,136 | 1,136 | 1,136 | ||||
Common stock | |||||||
Issued to Directors (in shares) | 29,000 | ||||||
Issued to Directors | (55) | (84) | 29 | (55) | |||
Issued to Employees (in shares) | 57,000 | ||||||
Issued to Employees | (36) | (92) | 56 | (36) | |||
Stock Exchange (see Notes 10 & 18) | 0 | ||||||
Warrants exercised (in shares) | 3,000 | ||||||
Warrants exercised | 0 | (3) | 3 | ||||
Net Income (Loss) | $ 18,009 | 18,009 | 18,009 | ||||
Balance (in shares) at Dec. 31, 2017 | 24,300,000 | 24,311,000 | |||||
Balance at Dec. 31, 2017 | $ 185,011 | $ 2,451 | 56,012 | (196) | 126,455 | 184,722 | 289 |
Stock options | |||||||
Issued to Directors | (10) | (10) | (10) | ||||
Issued to Employees | 154 | 154 | 154 | ||||
Cancellations (see Note 15) | (680) | (680) | (680) | ||||
Restricted common stock | |||||||
Issued to Directors | 338 | 338 | 338 | ||||
Issued to Employees | 1,939 | 1,939 | 1,939 | ||||
Common stock | |||||||
Issued to Directors (in shares) | 188,000 | ||||||
Issued to Directors | 588 | $ 10 | 489 | 89 | 588 | ||
Issued to Employees (in shares) | 183,000 | ||||||
Issued to Employees | 284 | $ 2 | 127 | $ 155 | 284 | ||
Stock Exchange (see Notes 10 & 18) (in shares) | (65,000) | (65,000) | |||||
Stock Exchange (see Notes 10 & 18) | (131) | (66) | $ (65) | (131) | |||
Warrants exercised (in shares) | 9,000 | ||||||
Warrants exercised | 0 | (9) | 9 | ||||
Net Income (Loss) | $ (2,332) | (2,332) | (2,332) | ||||
Balance (in shares) at Dec. 31, 2018 | 24,500,000 | 24,626,000 | |||||
Balance at Dec. 31, 2018 | $ 185,161 | $ 2,463 | $ 58,294 | $ (8) | $ 124,123 | $ 184,872 | $ 289 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) attributable to Trecora Resources | $ (2,332) | $ 18,009 | $ 19,428 |
Adjustments to reconcile net income (loss) attributable to Trecora Resources to net cash provided by operating activities: | |||
Depreciation | 12,497 | 9,100 | 7,896 |
Amortization of intangible assets | 1,861 | 1,861 | 1,880 |
Unrealized gain on derivative instruments | 0 | (58) | (119) |
Share-based compensation | 1,753 | 2,707 | 2,552 |
Deferred income taxes | (1,566) | (5,841) | 8,697 |
Postretirement obligation | (825) | (11) | 271 |
Bargain purchase gain from acquisition | 0 | 0 | (11,549) |
Equity in loss of AMAK | 901 | 4,261 | 1,479 |
Gain from additional equity issuance by AMAK | 0 | 0 | (3,168) |
Bad debt expense | 152 | 0 | 90 |
Amortization of loan fees | 261 | 247 | 272 |
Loss on extinguishment of debt | 315 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Increase in trade receivables | (1,485) | (3,586) | (2,809) |
(Increase) decrease in taxes receivable | 5,401 | (1,601) | 3,689 |
(Increase) decrease in inventories | 1,911 | (579) | (2,067) |
Increase in prepaid expenses and other assets | (1,222) | (806) | (1,022) |
Increase (decrease) in other liabilities | 33 | 142 | (174) |
Increase in accounts payable and accrued liabilities | 2,240 | 6,983 | 3,168 |
Net cash provided by operating activities | 19,895 | 30,828 | 28,514 |
Investing activities | |||
Additions to plant, pipeline and equipment | (25,285) | (51,584) | (38,484) |
Acquisition of B Plant | 0 | 0 | (2,011) |
Proceeds from AMAK share repurchase (Note 10) | 5,347 | 0 | 0 |
Advances to AMAK, net | 67 | (107) | (14) |
Net cash used in investing activities | (19,871) | (51,691) | (40,509) |
Financing Activities | |||
Issuance of common stock | 0 | 25 | 11 |
Net cash received (paid) related to stock-based compensation | 860 | (106) | 0 |
Additions to long-term debt | 18,177 | 26,000 | 8,000 |
Repayment of long-term debt | (15,354) | (10,417) | (6,250) |
Net cash provided by in financing activities | 3,683 | 15,502 | 1,761 |
Net increase (decrease) in cash and cash equivalents | 3,707 | (5,361) | (10,234) |
Cash and cash equivalents at beginning of year | 3,028 | 8,389 | 18,623 |
Cash and cash equivalents at end of year | 6,735 | 3,028 | 8,389 |
Supplemental disclosure of cash flow information: | |||
Cash payments for interest | 4,560 | 3,540 | 2,545 |
Cash payments (net of refunds) for taxes | (4,182) | 92 | (1,630) |
Supplemental disclosure of non-cash items: | |||
Capital Expansion amortized to depreciation expense | 787 | 840 | 1,047 |
Estimated earnout liability (Note 3) | 0 | 0 | 733 |
Stock exchange (Notes 10 & 18) | $ 131 | $ 0 | $ 0 |
BUSINESS AND OPERATIONS OF THE
BUSINESS AND OPERATIONS OF THE COMPANY | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND OPERATIONS OF THE COMPANY | BUSINESS AND OPERATIONS OF THE COMPANY Trecora Resources, formerly Arabian American Development Company, (the "Company") was organized as a Delaware corporation in 1967. The Company's principal business activities are the manufacturing of various specialty petrochemical products, specialty waxes and providing custom processing services. The Company owns 33% of a Saudi Arabian joint stock company, Al Masane Al Kobra Mining Company ("AMAK") (see Note 10) and approximately 55% of the capital stock of a Nevada mining company, Pioche Ely Valley Mines, Inc. ("PEVM"), which does not conduct any substantial business activity but owns undeveloped properties in the United States. The Company's specialty petrochemical operations are primarily conducted through a wholly-owned subsidiary, Texas Oil and Chemical Co. II, Inc. ("TOCCO"). TOCCO owns all of the capital stock of South Hampton Resources, Inc. ("SHR") and Trecora Chemical, Inc. ("TC"). SHR owns all of the capital stock of Gulf State Pipe Line Company, Inc. ("GSPL"). SHR owns and operates a specialty petrochemical product facility near Silsbee, Texas which manufactures high purity hydrocarbons used primarily in polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, Canadian tar sands, and in the catalyst support industry. TC owns and operates a facility located in Pasadena, Texas which manufactures specialty waxes and provides custom processing services. These specialty waxes are used in the production of coatings, hot melt adhesives and lubricants. GSPL owns and operates pipelines that connect the SHR facility to a natural gas line, to SHR's truck and rail loading terminal and to a major petroleum pipeline owned by an unaffiliated third party. We attribute revenues to countries based upon the origination of the transaction. All of our revenues for the years ended December 31, 2018 , 2017 , and 2016 , originated in the United States. In addition, all of our long-lived assets are in the United States. For convenience in this report, the terms "Company", "our", "us" or "we" may be used to refer to Trecora Resources and its subsidiaries. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation – The consolidated financial statements include the balance sheets, statements of income, stockholders' equity, and cash flows of the Company, TOCCO, TC, SHR, GSPL and PEVM. Other entities which are not controlled but over which the Company has the ability to exercise significant influence such as AMAK, are accounted for using the equity method of accounting. All intercompany profits, transactions and balances have been eliminated. Cash, Cash Equivalents and Short-Term Investments – Our principal banking and short-term investing activities are with local and national financial institutions. Short-term investments with an original maturity of three months or less are classified as cash equivalents. Inventories – Finished products and feedstock are recorded at the lower of cost, determined on the first-in, first-out method (FIFO), or market for SHR. For TC, inventory is recorded at the lower of cost or market as follows: (1) raw material cost is calculated using the weighted-average cost method and (2) product inventory cost is calculated using the specific cost method. Trade Receivables and Allowance for Doubtful Accounts – We evaluate the collectability of our trade receivables and adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which we become aware. For the year ended December 31, 2018, we increased the balance by $152,000 due to concerns regarding collectability for a specific customer. For the year ended December 31, 2017, the allowance balance was not increased. In 2016, we increased the balance by $90,000 due to an increase in sales in countries where there is a greater risk of default and limited recourse should this occur. We track customer balances and past due amounts to determine if customers may be having financial difficulties. This, along with historical experience and a working knowledge of each customer, helps determine accounts that should be written off. No amounts were written off in 2018 or 2017. During 2016 we wrote off one account for approximately $93,000 . Notes Receivable – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a non-interest note receivable is recorded with an imputed interest rate. There were no notes receivable outstanding as of December 31, 2018. The interest rate used on outstanding notes during December 31, 2018 and 2017 was 4% . The unearned interest was reflected as a discount against the note balance. The Company evaluates the collectability of notes based upon a working knowledge of the customer. The notes are receivable from custom processing customers with whom we maintain a close relationship. Thus, all amounts due under the notes receivable are considered collectible, and no allowance was recorded at December 31, 2018 and 2017 , respectively. Plant, Pipeline and Equipment – Plant, pipeline and equipment are stated at cost. Depreciation is provided over the estimated service lives using the straight-line method. Gains and losses from disposition are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. Major renewals and improvements are capitalized. Interest costs incurred to finance expenditures during construction phase are capitalized as part of the historical cost of constructing the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized interest costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Labor costs incurred to self-construct assets are capitalized as part of the historical cost the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized labor costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Platinum catalyst is included in plant, pipeline and equipment at cost. Amortization of the catalyst is based upon cost less estimated salvage value of the catalyst using the straight line method over the estimated useful life (see Note 8). Goodwill and Other Intangible Assets – Goodwill represents the future economic benefits arising from other assets acquired in the acquisition of TC that are not individually identified and separately recognized. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. Estimates of fair value are based on appraisals, market prices for comparable assets, or internal estimates of future net cash flows. Definite-lived intangible assets consist of customer relationships, licenses, permits and developed technology that were acquired as part of the Acquisition of TC. The majority of these assets are being amortized using discounted estimated future cash flows over the term of the related agreements. Intangible assets associated with customer relationships are being amortized using the discounted estimated future cash flows method based upon assumed rates of annual customer attrition. We continually evaluate the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they will be removed from the consolidated balance sheets. Business Combinations and Related Business Acquisition Costs – Assets and liabilities associated with business acquisitions are recorded at fair value using the acquisition method of accounting. We allocate the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. We may use third-party valuation specialists to assist us in this allocation. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition. The fair value of property, plant and equipment and intangible assets are based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Business acquisition costs are expensed as incurred and are reported as general and administrative expenses in the consolidated statements of income. We define these costs to include finder's fees, advisory, legal, accounting, valuation, and other professional consulting fees, as well as, travel associated with the evaluation and effort to acquire specific businesses. Investment in AMAK – We account for our investment in AMAK using the equity method of accounting under which we record in income our share of AMAK's income or loss for each period. The amount recorded is also adjusted to reflect the amortization of certain differences between the basis in our investment in AMAK and our share of the net assets of AMAK as reflected in AMAK's financial statements (see Note 10). Any proceeds received from or payments made to AMAK are recorded as decreases or increases in the balance of our investment. We assess our investment in AMAK for impairment when events are identified, or there are changes in circumstances that may have an adverse effect on the fair value of the investment. We consider recoverable ore reserves, changes in commodity prices, and the amount and timing of the cash flows to be generated by the production of those reserves, as well as, recent equity transactions within AMAK. Other Assets – Other assets include a license used in specialty petrochemical operations, spare parts inventory and certain specialty petrochemical assets. Beginning January 1, 2017, due to the expansion of our plant assets at SHR and TC, we began inventorying spare parts for the repair and maintenance of our plant, pipeline and equipment. Spare parts are accounted for on the first-in, first-out method (FIFO). Long-Lived Assets Impairment – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on the undiscounted net cash flows to be generated from the asset's use. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis although other factors including the state of the economy are considered. Revenue Recognition – The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606 ("ASC 606"), Revenue from Contracts with Customers, and its amendments with a date of the initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. ASC 606 outlines a single comprehensive model for an entity to use in accounting for revenue arising from all contracts with customers, except where revenues are in scope of another accounting standard. ASC 606 superseded the revenue recognition requirements in ASC Topic 605, " Revenue Recognition", and most industry specific guidance. ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services. ASC 606 also requires certain additional revenue-related disclosures. The Company applied the modified retrospective approach under ASC 606 which allows for the cumulative effect of adopting the new guidance on the date of initial application. Use of the modified retrospective approach means the Company's comparative periods prior to initial application are not restated. The initial application was applied to all contracts at the date of the initial application. The Company has determined that the adjustments using the modified retrospective approach did not have a material impact on the date of the initial application along with the disclosure of the effect on prior periods. Accounting Policy Beginning on January 1, 2018, revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. In evaluating when a customer has control of the asset we primarily consider whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer has accepted delivery and a right to payment exists. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales and processing. The Company does not offer material rights of return or service-type warranties. For the year ended December 31, 2017 the Company recognized revenue according to FASB ASC Topic 605 ("ASC 605"), " Revenue Recognition" , when: (1) the customer accepted delivery of the product and title had been transferred or when the service was performed and the Company had no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction had occurred; (3) price was fixed and determinable; and (4) collection was assured. Product sales generally met these criteria, and revenue was recognized, when the product was delivered or title was transferred to the customer. Sales revenue was presented net of discounts, allowances, and sales taxes. Freight costs billed to customers were recorded as a component of revenue. Revenues received in advance of future sales of products or prior to the performance of services were presented as deferred revenues. Shipping and handling costs were classified as cost of product sales and processing and were expensed as incurred. Nature of goods and services The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, disaggregation of revenues, and contract balance disclosures, see Note 17. Specialty petrochemical segment The specialty petrochemical segment of the Company produces eight high purity hydrocarbons and other petroleum based products including isopentane, normal pentane, isohexane and hexane. These products are used in the production of polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, crude oil from the Canadian tar sands, and in the catalyst support industry. SHR's specialty petrochemical products are typically transported to customers by rail car, tank truck, iso-container and ship. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected 30 to 60 days subsequent to point of sale. Processing Fees – The Company's services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements the customer retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Specialty Wax segment The specialty wax segment of the Company manufactures and sells specialty polyethylene and poly alpha olefin waxes and also provides custom processing services for customers. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Processing Fees – The Company's promised services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements and Purchase Order Arrangements, the customer typically retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction and Purchase Order Arrangement is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Shipping and Handling Costs – Shipping and handling costs are classified as cost of product sales and processing and are expensed as incurred. Retirement Plan – We offer employees the benefit of participating in a 401(k) plan. We match 100% up to 6% of pay with vesting occurring over 2 years. For years ended December 31, 2018 , 2017 , and 2016 , matching contributions of approximately $1,502,000 , $1,412,000 , and $1,195,000 , respectively were made on behalf of employees. Environmental Liabilities – Remediation costs are accrued based on estimates of known environmental remediation exposure. Ongoing environmental compliance costs, including maintenance and monitoring costs, are expensed as incurred. Other Liabilities – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a note receivable and a deferred liability are recorded to recover the project costs which are then capitalized. At times instead of a note receivable being established, the customer pays an upfront cost. The amortization of other liabilities is recorded as a reduction to depreciation expense over the life of the contract with the customer. As of December 31 of each year, depreciation expense was offset and reduced by approximately $0.8 million , $0.8 million , and $1.0 million , for 2018 , 2017 , and 2016 , respectively. Net Income Per Share – We compute basic income per common share based on the weighted-average number of common shares outstanding. Diluted income per common share is computed based on the weighted-average number of common shares outstanding plus the number of additional common shares that would have been outstanding if potential dilutive common shares, consisting of stock options, unvested restricted stock units, and shares which could be issued upon conversion of debt, had been issued (see Note 18). Foreign Currency – The functional currency for the Company and each of the Company's subsidiaries is the US dollar (USD). Transaction gains or losses as a result of transactions denominated and settled in currencies other than the USD are reflected in the statements of income as foreign exchange transaction gains or losses. We do not employ any practices to minimize foreign currency risks. The functional and reporting currency of AMAK is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the USD at a fixed exchange rate of 1 USD to 3.75 SR; therefore, we translate SR into our reporting currency of the USD for income statement and balance sheet purposes using the fixed exchange rate. As of December 31, 2018 , 2017 and 2016 , foreign currency translation adjustments were not significant. Management Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include allowance for doubtful accounts receivable and inventory obsolescence; assessment of impairment of our long-lived assets, goodwill, intangible assets and investments, litigation liabilities, post-retirement benefit obligations, guarantee obligations, environmental liabilities, income taxes and deferred tax valuation allowances. Actual results could differ from these estimates. Share-Based Compensation – We recognize share-based compensation of stock options granted based upon the fair value of options on the grant date using the Black-Scholes pricing model (see Note 15). Share-based compensation expense recognized during the period is based on the fair value of the portion of share-based payments awards that is ultimately expected to vest. Share-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2018 , 2017 , and 2016 includes compensation expense based on the estimated grant date fair value for awards that are ultimately expected to vest, and accordingly has been reduced for estimated forfeitures. Estimated forfeitures at the time of grant are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Guarantees – We may enter into agreements which contain features that meet the definition of a guarantee under FASB ASC 460 "Guarantees" (see Note 14). These arrangements create two types of obligations: a) We have a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and b) We have an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probable that one or more future events will occur, triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated. Fair Value – The carrying value of cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of variable rate long term debt and notes payable reflect recent market transactions and approximate carrying value. We used other observable inputs that would qualify as Level 2 inputs to make our assessment of the approximate fair value of our cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, other liabilities, notes payable and variable rate long term debt. The fair value of the derivative instruments are described below. We measure fair value by ASC Topic 820 Fair Value. ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard amends numerous accounting pronouncements but does not require any new fair value measurements of reported balances. ASC Topic 820 emphasizes that fair value, among other things, is based on exit price versus entry price, should include assumptions about risk such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. When considering the assumptions that market participants would use in pricing the asset or liability, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy prioritizes inputs used to measure fair value into three broad levels. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Derivatives – We record derivative instruments as either an asset or liability measured at fair value. Changes in the derivative instrument's fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument's gains and losses to offset related results on the hedged item in the income statement, to the extent effective, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized. Our estimate of the potential outcome of any uncertain tax issues is subject to management's assessment of relevant risks, facts, and circumstances existing at that time. We use a more likely than not threshold for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. To the extent that our assessment of such tax position changes, the change in estimate is recorded in the period in which the determination is made. We report tax-related interest and penalties as a component of income tax expense. On December 22, 2017, Public Law No. 115-97 known as the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA included a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. federal corporate income tax rate from a maximum of 35 percent to a flat 21 percent for tax years effective January 1, 2018. The TCJA also implemented a territorial tax system, provided for a one-time deemed repatriation tax on unrepatriated foreign earnings, eliminated the alternative minimum tax (AMT), made AMT credit carryforwards refundable, and permitted the acceleration of depreciation for certain assets placed into service after September 27, 2017. In addition the TJCA created prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. The Company has elected to recognize the income tax effects of the TCJA in its financial statements in accordance with Staff Accounting Bulletin 118 (SAB 118), which provides guidance for the application of ASC Topic 740 Income Taxes , in the reporting period in which the TCJA was signed into law. Under SAB 118 when a Company does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA it will recognize provisional amounts if a reasonable estimate can be made. If a reasonable estimate cannot be made then no impact is recognized for the effect of the TCJA. SAB 118 permits an up to one year measurement period to finalize the measurement of the impact of the TCJA. Reclassifications – Certain reclassifications have been made to prior year balances to conform with the current year presentation. Subsequent Events – The Company has evaluated subsequent events through March 15, 2019 , the date that the consolidated financial statements were approved by management. New Accounting Pronouncements In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-9, Revenue from Contracts with Customers ("ASU 2014-9"). ASU 2014-9 supersedes the revenue recognition requirements of FASB Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and most industry-specific guidance throughout the Accounting Standards Codification, resulting in the creation of FASB ASC Topic 606, Revenue from Contracts with Customers . ASU 2014-9 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU provides alternative methods of retrospective adoption and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company completed its assessment of the impact of the adoption of ASU 2014-9 across all revenue streams. This included reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. We completed contract reviews and validated results of applying the new revenue guidance (Note 2). See Revenue Recognition policy note. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to ASC 842, Leases. ASU 2018-11 provided entities with an alternative modified transition method to elect not to recast the comparative periods presented when adopting ASC 842. The new standard provides a number of optional practical expedients in transition. The Company expects to elect: (1) the ‘package of practical expedients’, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs and (2) the use-of-hindsight. In addition, the new standard provides practical expedients for an entity’s ongoing accounting that the Company anticipates making, such as the (1) the election for certain classes of underlying asset to not separate non-lease components from lease components and (2) the election for short-term lease recognition exemption for all leases that qualify. The Company will adopt ASU 842 as of January 1, 2019, using the alternative modified transition method. In preparation of adopting ASC 842, the Company is implementing additional internal controls to enable future preparation of financial information in accordance with ASC 842. The Company has also substantially completed its evaluation of the impact on the Company’s lease portfolio. The Company believes the largest impact will be on the consolidated balance sheets for the accounting of rail cars, equipment and office leases, which represents a majority of its operating leases it has entered into as a lessee. These leases will be recognized under the new standard as right of use assets (“ROU”) operating lease liabilities. The Company will also be required to provide expanded disclosures for its leasing arrangements. As of December 31, 2018, the Company had approximately $ 18.1 million of undiscounted future minimum operating lease commitments that are not recognized on its consolidated balance sheets as determined under the current standard. For a lessee, the results of operations are not expected to significantly change after adoption of the new standard. While substantially complete, the Company is still in the process of finalizing its evaluation of the effect of ASU 842 on the Company’s financial statements and disclosures, including the determination of the Company’s incremental borrowing rate for each of the operating leases to estimate the interest rate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. The Company will finalize its accounting assessment and quantitative impact of the adoption during the first quarter of fiscal year 2019. In January 2017 the FASB issued ASU No. 2017-4, Intangibles – Goodwill and Other (Topic 350) . The amendments in ASU 2017-4 simplify the measurement of goodwill |
ACQUISITION OF B PLANT
ACQUISITION OF B PLANT | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITION OF B PLANT | ACQUISITION OF B PLANT On May 2, 2016, we purchased the idle BASF facility adjacent to our TC facility in exchange for $2.0 million in cash, transaction costs of approximately $11,000 plus an earnout provision calculated through calendar year 2020 based upon revenue generated by the facility but limited to $1.8 million . The cash payment was funded by working capital. The purchased facility includes production equipment similar to TC's plus equipment that broadens TC's capabilities and potential markets. The 6.5 -acre site also includes substantial storage capacity, several rail and truck loading sites and utility tie-ins to TC. We refer to the facility as "B Plant". We have accounted for the purchase in accordance with the acquisition method of accounting under Financial Accounting Standards Board Accounting Standards Codification Topic 805 "Business Combinations" ("ASC 805"). In accordance with ASC 805, we used our best estimates and assumptions to assign fair value to the tangible assets and liabilities acquired at the acquisition date. The assets and liabilities acquired have been included in our consolidated balance sheets and our consolidated statements of income since the date of acquisition. We recorded an $11.5 million bargain purchase gain on the transaction as calculated in the table below (in thousands). Cash paid $ 2,011 Estimated earnout liability 733 Purchase Price $ 2,744 Fixed assets at FMV Land 980 Site improvements 30 Buildings 1,350 Production equipment 11,933 14,293 Bargain purchase gain $ 11,549 The business acquired had been idle for the periods presented thus proforma financial presentation would be identical to our consolidated results. We began operating the new facility in June 2016. |
CONCENTRATIONS OF REVENUES AND
CONCENTRATIONS OF REVENUES AND CREDIT RISK | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF REVENUES AND CREDIT RISK | CONCENTRATIONS OF REVENUES AND CREDIT RISK We sell our products and services to companies in the chemical, plastics, and petroleum industries. We perform periodic credit evaluations of our customers and generally do not require collateral from our customers. For the year ended December 31, 2018 , one customer accounted for 17.0% of consolidated product revenue. For the year ended December 31, 2017 , one customer accounted for 19.6% of consolidated product revenue. For the year ended December 31, 2016 , one customer accounted for 20.1% of consolidated product revenue. The associated accounts receivable balances for those customers were approximately $11.0 million at December 31, 2018 , and $5.8 million at December 31, 2017 . The carrying amount of accounts receivable approximates fair value at December 31, 2018 , and 2017 . Accounts receivable serves as collateral for our amended and restated loan agreement (see Note 12). We market our products in many foreign jurisdictions. For the years ended December 31, 2018 , 2017 and 2016 , specialty petrochemical product sales revenue in foreign jurisdictions accounted for approximately 35.4% , 20.8% , and 23.5% of total product sales revenue, respectively. SHR utilizes one major supplier for its feedstock supply. The feedstock is a commodity product commonly available from other suppliers if needed. The percentage of feedstock purchased from the supplier during 2018 , 2017 , and 2016 was 100% , 100.0% and 99% , respectively. At December 31, 2018 , and 2017 , we owed the supplier approximately $4.7 million and $8.5 million , respectively for feedstock purchases. We hold our cash with various financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000 . At times during the year, cash balances may exceed this limit. We have not experienced any losses in such accounts and do not believe we are exposed to any significant risk of loss related to cash. |
TRADE RECEIVABLES
TRADE RECEIVABLES | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
TRADE RECEIVABLES | TRADE RECEIVABLES Trade receivables, net, at December 31, consisted of the following: 2018 2017 (thousands of dollars) Trade receivables $ 27,564 $ 26,079 Less allowance for doubtful accounts (452 ) (300 ) Trade receivables, net $ 27,112 $ 25,779 Trade receivables serves as collateral for our amended and restated loan agreement with a domestic bank (see Note 12). |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets at December 31 are summarized as follows: 2018 2017 (thousands of dollars) Prepaid license $ 2,419 $ 1,919 Spare parts 1,597 954 Other prepaid expenses and assets 648 772 Total $ 4,664 $ 3,645 Beginning January 1, 2017, due to the expansion of our plant assets at SHR and TC, we began inventorying spare parts for the repair and maintenance of our plant, pipeline and equipment. Prepaid catalyst has been reclassified into Plant, Pipeline & Equipment to conform to current year reporting. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories include the following at December 31: 2018 2017 (thousands of dollars) Raw material $ 4,742 $ 3,703 Work in process 173 27 Finished products 11,624 14,720 Total inventory $ 16,539 $ 18,450 Inventory serves as collateral for our amended and restated loan agreement with a domestic bank (see Note 12). Inventory included products in transit valued at approximately $4.1 million and $3.7 million at December 31, 2018 , and 2017 , respectively. |
PLANT, PIPELINE AND EQUIPMENT
PLANT, PIPELINE AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PLANT, PIPELINE AND EQUIPMENT | PLANT, PIPELINE AND EQUIPMENT Plant, pipeline and equipment include the following at December 31: 2018 2017 (thousands of dollars) Platinum catalyst $ 1,612 $ 1,612 Catalyst 3,131 779 Land 5,428 5,428 Plant, pipeline and equipment 253,905 186,946 Construction in progress 4,343 50,996 Total plant, pipeline and equipment 268,419 245,761 Less accumulated depreciation (73,762 ) (63,240 ) Net plant, pipeline and equipment $ 194,657 $ 182,521 Plant, pipeline and equipment serve as collateral for our amended and restated loan agreement with a domestic bank (see Note 12). Interest capitalized for construction for 2018 , 2017 and 2016 was approximately $731,000 , $937,000 and $450,000 , respectively. Labor capitalized for construction for 2018 , 2017 and 2016 was approximately $2,307,000 , $4,344,000 and $2,889,000 , respectively. Catalyst amortization relating to the platinum catalyst which is included in cost of sales was approximately $59,000 , $25,000 and $98,000 for 2018 , 2017 and 2016 , respectively. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill We performed an impairment analysis on the value of Goodwill at December 31, 2018 , and 2017 , and determined that no impairment existed. Intangible Assets The following table summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands): December 31, 2018 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (4,775 ) $ 12,077 Non-compete agreements 94 (80 ) 14 Licenses and permits 1,471 (495 ) 976 Developed technology 6,131 (2,606 ) 3,525 24,548 (7,956 ) 16,592 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (7,956 ) $ 18,947 December 31, 2017 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (3,651 ) $ 13,201 Non-compete agreements 94 (61 ) 33 Licenses and permits 1,471 (390 ) 1,081 Developed technology 6,131 (1,993 ) 4,138 24,548 (6,095 ) 18,453 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (6,095 ) $ 20,808 Amortization expense for intangible assets included in cost of sales for the years ended December 31, 2018 , 2017 , and 2016 , was approximately $1,861,000 , $1,861,000 , and $1,880,000 respectively. Based on identified intangible assets that are subject to amortization as of December 31, 2018 , we expect future amortization expenses for each period to be as follows (in thousands): Total 2019 2020 2021 2022 2023 Thereafter Customer relationships $ 12,077 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 6,462 Non-compete agreements 14 14 — — — — — Licenses and permits 976 106 106 101 86 86 491 Developed technology 3,525 613 613 613 613 613 460 Total future amortization expense $ 16,592 $ 1,856 $ 1,842 $ 1,837 $ 1,822 $ 1,822 $ 7,413 |
INVESTMENT IN AL MASANE AL KOBR
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (AMAK) | INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") We have concluded that we have significant influence over the operating and financial policies of AMAK and, accordingly, should account for our investment in AMAK using the equity method. As of December 31, 2018 , and 2017 , we had a non-controlling equity interest of approximately $38.7 million and $45.1 million , respectively. We have received and attached to this Form 10-K the financial statements of AMAK prepared in accordance with generally accepted accounting principles in the United States of America as of December 31, 2018 , and 2017 , and for each of the three years ended December 31, 2018 . These financial statements have been prepared in the functional currency of AMAK which is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the U.S. Dollar (USD) at a fixed exchange rate of 1 USD to 3.75 SR. The summarized results of operation and financial position for AMAK are as follows: Results of Operations Years Ended December 31, 2018 2017 2016 (Thousands of Dollars) Sales $ 70,234 $ 36,435 $ 9,921 Cost of sales (68,084 ) (43,304 ) (27,132 ) Gross loss 2,150 (6,869 ) (17,211 ) General, administrative and other expenses 8,879 9,903 9,690 Loss from operations $ (6,729 ) $ (16,772 ) $ (26,901 ) Gain on settlement with former operator — — 17,425 Net loss $ (6,729 ) $ (16,772 ) $ (9,476 ) Depreciation and amortization 33,469 22,419 11,672 Net income before depreciation and amortization $ 26,740 $ 5,648 $ 2,196 Financial Position December 31, 2018 2017 (Thousands of Dollars) Current assets $ 44,093 $ 23,333 Noncurrent assets 212,291 237,875 Total assets $ 256,384 $ 261,208 Current liabilities $ 17,160 $ 24,439 Long term liabilities 77,366 68,837 Shareholders' equity 161,858 167,932 Total liabilities and equity $ 256,384 $ 261,208 The equity in the income or loss of AMAK reflected on the consolidated statements of income for the years ended December 31, 2018 , 2017 , and 2016 , is comprised of the following: 2018 2017 2016 AMAK Net Loss $ (6,729 ) $ (16,772 ) $ (9,476 ) Zakat tax applicable to Saudi Arabian shareholders only — — 320 AMAK Net Loss before Saudi Arabian shareholders' portion of Zakat $ (6,729 ) $ (16,772 ) $ (9,156 ) Company's share of loss reported by AMAK (33.41% beginning July 10, 2016 and 35.25% prior to July 10, 2016) $ (2,248 ) $ (5,608 ) $ (2,826 ) Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK 1,347 1,347 1,347 Equity in loss of AMAK $ (901 ) $ (4,261 ) $ (1,479 ) In 2016 the difference between our effective share of income (loss) from our investment and our actual ownership percentage is attributable to the change in our ownership percentage during the third quarter of 2016. A gain of approximately $16.2 million for the difference between our initial investment in AMAK and our share of AMAK's initial assets recorded at fair value was not recognized in 2008. This basis difference is being amortized over the life of AMAK's mine which is estimated to be twelve years beginning with its commencement of production in July 2012 as an adjustment to our equity in AMAK's income or loss. In July 2016 AMAK issued four million shares to provide additional funds for ongoing exploration work and mine start-up activities. Arab Mining Co. ("Armico") purchased 3.75 million shares at SR 20 per share (USD 5.33 per share) and the remaining 250,000 shares are for future use as employee incentives. We did not participate in the offering, thereby reducing our ownership percentage in AMAK to 33.44% from 35.25% . As a result of the equity issuance, our share of the net assets of AMAK increased approximately $3.2 million which we recognized as a gain (with a corresponding increase in our investment) in accordance with ASC 323-10-40-1. In 2018, we completed an exchange of shares with certain shareholders whereby such shareholders traded 65,000 common shares of TREC in exchange for 24,489 shares of our AMAK stock. The 65,000 shares were accounted for as treasury stock. This transaction reduced our ownership percentage from 33.44% to 33.41% . The following table shows AMAK shareholders and percentages owned at December 31, 2018: Name Percentage Owned Various Saudi shareholders 46.73 % Trecora Resources 33.41 % Armico 19.86 % Total 100.00 % As previously announced, AMAK initiated a share repurchase program from its existing shareholders in December 2018. We participated in this share repurchase and received approximately $5.3 million in proceeds from AMAK. We had previously reported, based on information available at the time, that AMAK was repurchasing 10% of its outstanding shares from its existing shareholders on a pro-rata basis. We have since learned that, while a redemption of up to 10% of AMAK's 82 million outstanding shares had been approved by the shareholders, the repurchase program approved by AMAK's board of directors and initiated in December 2018 was with respect to 2.5 million shares. AMAK expects to complete the share repurchase program in 2019, at which point all shares repurchased from AMAK shareholders will be registered as treasury shares. Upon completion of the share repurchase program, the Company does not believe its ownership percentage in AMAK will change from 33.4% . At December 31, 2018 and 2017, we had a receivable from AMAK of approximately $54,000 and $121,000 , respectively, relating to unreimbursed travel and Board expenses which is included in prepaid and other assets. We assess our investment in AMAK for impairment when events are identified, or there are changes in circumstances that may have an adverse effect on the fair value or recoverability of the investment. We consider recoverable ore reserves and the amount and timing of the cash flows to be generated by the production of those reserves, as well as, recent equity transactions within AMAK. No impairment charges were recorded in 2018 , 2017 , or 2016 . |
MINERAL PROPERTIES IN THE UNITE
MINERAL PROPERTIES IN THE UNITED STATES | 12 Months Ended |
Dec. 31, 2018 | |
Mineral Industries Disclosures [Abstract] | |
MINERAL PROPERTIES IN THE UNITED STATES | MINERAL PROPERTIES IN THE UNITED STATES The principal assets of PEVM are an undivided interest in 48 patented and 5 unpatented mining claims totaling approximately 1,500 acres, and a 300 ton-per-day mill located on the aforementioned properties in the PEVM Mining District in southeast Nevada. In August 2001 seventy-five unpatented claims were abandoned since they were deemed to have no future value to PEVM. The properties held by PEVM have not been commercially operated for approximately 35 years. |
LONG-TERM DEBT AND LONG-TERM OB
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS | LONG-TERM DEBT AND LONG-TERM OBLIGATIONS ARC Agreement In October 2014, TOCCO, SHR, GSPL and TC (SHR, GSPL and TC collectively the “Guarantors”) entered into an amended and restated credit agreement (as amended to the date hereof, the “ARC Agreement”), which originally provided (i) a revolving credit facility (the “Revolving Facility”) with revolving commitments of $40.0 million and (ii) term loan borrowings consisting of (A) a $70.0 million single advance term loan incurred to partially finance the acquisition of TC (which we refer to as the “Acquisition loan”) and (B) a $25.0 multiple advance term loan facility for which borrowing availability ended on December 31, 2015 (collectively, the “Term Loan Facility” and, together with the Revolving Facility, the “Credit Facilities”). Only July 31, 2018, TOCCO and the Guarantors entered into a Fourth Amendment to the ARC Agreement (the “Fourth Amendment”) pursuant to which the revolving commitments under the Revolving Facility were increased to $75.0 million . Pursuant to the Fourth Amendment, total borrowings under the Term Loan Facility were increased to $87.5 million under a single combined term loan, which comprised new term loan borrowings together with approximately $60.4 million of previously outstanding term loans under the Term Loan Facility. The $60.4 million of previously outstanding term loans included the remaining outstanding balances on the Acquisition loan and the multiple advance term loan facility described above. Proceeds of the new borrowings under the Term Loan Facility were used to repay a portion of the outstanding borrowings under the Revolving Facility and pay fees and expenses of the transaction. As of December 31, 2018, we had $18 million in borrowings outstanding under the Revolving Facility and $84.5 million in borrowings outstanding under the Term Loan Facility. In addition, we had approximately $18 million of available borrowings under our Revolving Facility at December 31, 2018. TOCCO’s ability to make additional borrowings under the Revolving Credit Facility at December 31, 2018 was limited by, and in the future may be limited by our obligation to maintain compliance with the covenants contained in the ARC Agreement (including maintenance of a maximum Consolidated Leverage Ratio and minimum Consolidated Fixed Charge Coverage Ratio (each as defined in the ARC Agreement)). The maturity date for the ARC Agreement is July 31, 2023. Subject to the lenders acceptance of any increased commitment and other conditions, we have the option, at any time, to request an increase to the commitment under the Revolving Facility and/or the Term Loan Facility by an additional amount of up to $50.0 million in the aggregate. Borrowings under each of the Credit Facilities bear interest on the outstanding principal amount at a rate equal to LIBOR plus an applicable margin of 1.25% to 2.50% or, at our option, the Base Rate plus an applicable margin of 0.25% to 1.50% , in each case, with the applicable margin being determined based on the Consolidated Leverage Ratio of TOCCO. A commitment fee between 0.20% and 0.375% is also payable quarterly on the unused portion of the Revolving Facility. For 2018, the effective interest rate for the Credit Facilities was 4.19% . Borrowings under the Term Loan Facility are subject to quarterly amortization payments based on a commercial style amortization method over a twenty year period; provided, that the final principal installment will be paid on the maturity date and will be in an amount equal to the outstanding borrowings under the Term Loan Facility on such date. Pursuant to the terms of the ARC Agreement, TOCCO must maintain a maximum Consolidated Leverage Ratio of 4.75 to 1.00 for the four fiscal quarters ended December 31, 2018, 4.25 to 1.00 for the four fiscal quarters ended March 31, 2019, 4.00 to 1.00 for the four fiscal quarters ended June 30, 2019 and 3.75 to 1.00 for the four fiscal quarters ended September 30, 2019. For the four fiscal quarters ended December 31, 2019 and each fiscal quarter thereafter, TOCCO must maintain a Consolidated Leverage Ratio of 3.50 to 1.00 (subject to temporary increase following certain acquisitions). Additionally, TOCCO must maintain a minimum Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter of 1.15 to 1.00 . The ARC Agreement contains, among other things, other customary covenants, including restrictions on the incurrence of additional indebtedness, the granting of additional liens, the making of investments, the disposition of assets and other fundamental changes, transactions with affiliates and the declaration of dividends and other restricted payments. The ARC Agreement further includes customary representations and warranties and events of default, and upon occurrence of such events of default the outstanding obligations under the ARC Agreement may be accelerated and become immediately due and payable and the commitment of the lenders to make loans under the ARC Agreement may be terminated. We were in compliance with all covenants at December 31, 2018. Principal payments of long-term debt for the next five years and thereafter ending December 31 are as follows: Year Ending December 31, Long-Term Debt (thousands of dollars) 2019 4,375 2020 4,375 2021 4,375 2022 4,375 2023 85,812 Total 103,312 Debt Issuance Costs Debt issuance costs of approximately $0.9 million were incurred in connection with the Fourth Amendment and the remaining debt issuance costs of $0.3 million from the previous agreements were expensed and are shown as a loss on the extinguishment of debt on the consolidated statements of operations for the year ended December 31, 2018. Unamortized debt issuance costs of approximately $0.8 million and $0.5 million for the years ended December 31, 2018 and December 31, 2017, have been netted against outstanding loan balances. Long-term debt and long-term obligations at December 31 are summarized as follows: 2018 2017 (thousands of dollars) Revolving facility $ 18,000 $ 35,000 Term loan facility 85,312 47,250 Acquisition loan — 17,333 Loan fees (830 ) (501 ) Total long-term debt 102,482 99,082 Less current portion including loan fees 4,194 8,061 Total long-term debt, less current portion including loan fees $ 98,288 $ 91,021 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities at December 31 are summarized as follows: 2018 2017 (thousands of dollars) Accrued state taxes $ 210 $ 272 Accrued payroll 936 1,407 Accrued interest 31 30 Accrued officer compensation — 500 Accrued restructuring & severance expenses (Note 21) 1,221 — Accrued foreign taxes 802 — Other liabilities 2,239 1,752 Total $ 5,439 $ 3,961 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Guarantees On October 24, 2010, we executed a limited guarantee in favor of the Saudi Industrial Development Fund ("SIDF") whereby we agreed to guaranty up to 41% of the SIDF loan to AMAK in the principal amount of 330.0 million Saudi Riyals (US $88.0 million ) (the "Loan"). The term of the loan is currently through June 2022. As a condition of the Loan, SIDF required all shareholders of AMAK to execute personal or corporate guarantees; as a result, the Company's guarantee is for approximately 135.3 million Saudi Riyals (US $36.1 million ). The loan was necessary to continue construction of the AMAK facilities and provide working capital needs. Our current assessment is that the probability of contingent performance is remote based on our analysis of the contingent portion of the guarantee which included but was not limited to the following: (1) the SIDF has historically not called guarantees, (2) the value of the assets exceeds the amount of the loan (3) the other shareholders have indicated that they would prioritize their personal guarantees ahead of the corporate guarantee, and (4) according to Saudi Arabian legal counsel, assets outside of Saudi Arabia are protected from the Saudi Court System. We received no consideration in connection with extending the guarantee and did so to maintain and enhance the value of our investment. Our non-contingent and immediate obligation to stand ready to make payments if the events of default under the guarantee occur was not material to the financial statements. The total amount outstanding to the SIDF at December 31, 2018 , and 2017 was 305.0 million and 305.0 million Saudi Riyals (US $81.3 million and $81.3 million ), respectively. Operating Lease Commitments We have operating leases for the rental of approximately 346 railcars for shipping purposes with expiration dates through 2026 . Invoices are received and paid on a monthly basis. The total amount of the commitment is approximately $17.3 million over the next 9 years. We also have an operating lease for our office space in Sugar Land, Texas. The expiration date for this lease is September 2023 . The total amount of the commitment is approximately $587,000 . In addition, we are required to make periodic payments for property taxes, utilities and common area operating expenses. In addition, we have operating leases for other equipment such as forklifts and copiers with varying expiration dates through 2023 . These commitments are approximately $207,000 . Future minimum property and equipment lease payments under the non-cancelable operating leases at December 31, 2018 , are as follows: Year Ending December 31, (thousands of dollars) 2019 $ 3,670 2020 3,583 2021 3,418 2022 3,107 2023 2,288 Thereafter 2,065 Total $ 18,131 Rental expense for these operating leases for the years ended December 31, 2018 , 2017 , and 2016 was $4.4 million , $4.4 million and $4.2 million , respectively. Litigation From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in any legal proceedings that we believe could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future. On March 21, 2011, Mr. El Khalidi filed suit against the Company in Texas alleging breach of contract and other claims. The 88th Judicial District Court of Hardin County, Texas dismissed all claims and counterclaims for want of prosecution in this matter on July 24, 2013. The Ninth Court of Appeals subsequently affirmed the dismissal for want of prosecution and the Supreme Court of Texas denied Mr. El Khalidi's petition for review. On May 1, 2014, Mr. El Khalidi refiled his lawsuit against the Company for breach of contract and defamation in the 356th Judicial District Court of Hardin County, Texas. The case was transferred to the 88th Judicial District Court of Hardin County, Texas. The Trial Court dismissed all of Mr. El Khalidi's claims and causes of action with prejudice and the Ninth Court of Appeals affirmed. Mr. El Khalidi filed a petition for review with the Supreme Court of Texas, which was denied April 6, 2018. Mr. El Khalidi filed a motion for rehearing of his petition for review with the Supreme Court of Texas on April 23, 2018. On May 25, 2018, the Supreme Court of Texas denied the motion for rehearing and the matter is considered closed. Supplier Agreements From time to time, we may incur shortfall fees due to feedstock purchases being below the minimum amounts as prescribed by our agreements with our suppliers. The shortfall fee expenses were not significant for the years ended December 31, 2018 , 2017 , and 2016 . Environmental Remediation Amounts charged to expense for various activities related to environmental monitoring, compliance, and improvements were approximately $745,000 in 2018 , $593,000 in 2017 and $622,000 in 2016 . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Stock Option Plan for Key Employees, as well as, the Non-Employee Director Stock Option Plan (hereinafter collectively referred to as the “Stock Option Plans”), were approved by the Company’s shareholders in July 2008. The Stock Option Plans allot for the issuance of up to 1,000,000 shares. The Trecora Resources Stock and Incentive Plan (the “Plan”) was approved by the Company’s shareholders in June 2012. The Plan allots for the issuance of up to 1,500,000 shares in the form of stock options or restricted stock unit awards. Share-based compensation of approximately $ 1.8 million, $2.7 million, and $2.6 million was recognized in 2018, 2017, and 2016, respectively. The Company reclassified approximately $318,000 for 2018 from share-based compensation expense in connection with the restructuring described in Note 21. Stock Options and Warrant Awards Stock options and warrants granted under the provisions of the Stock Option Plans permit the purchase of our common stock at exercise prices equal to the closing price of Company common stock on the date the options were granted. The options have terms of 10 years and generally vest ratably over terms of 4 to 5 years. There were no stock options or warrant awards issued during 2018, 2017, or 2016. A summary of the status of the Company’s stock option and warrant awards is as follows: Stock Options and Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Intrinsic Value (in thousands) Outstanding at January 1, 2018 1,323,587 $ 7.82 Granted — — Expired — — Exercised (377,757 ) 5.21 Forfeited (200,000 ) 3.40 Outstanding at December 31, 2018 745,830 $ 10.33 4.6 $ — Expected to vest — $ — 0.0 $ — Exercisable at December 31, 2018 745,830 $ 10.33 4.6 $ — The aggregate intrinsic value of options was calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock. At December 31, 2018, options to purchase approximately 0.5 million shares of common stock were in-the-money. Since no options were granted, the weighted average grant-date fair value per share of options granted during the years 2018, 2017, and 2016 was $0 . During 2018, 2017, and 2016 the aggregate intrinsic value of options and warrants exercised was approximately $2,630,000 , $164,000 and $237,000 respectively, determined as of the date of option exercise. The Company received approximately $912,000 , $25,000 and $11,000 in cash from the exercise of options during 2018, 2017 and 2016, respectively. Of the approximately 378,000 stock options and warrants exercised, the Company only issued approximately 268,000 shares due to cashless transactions. The tax benefit realized from the exercise was insignificant. A summary of the status of the Company's non-vested options that are expected to vest is presented below: Shares Weighted Average Grant-Date Fair Value Per Share Non-vested at January 1, 2018 325,000 $ 6.81 Granted — — Forfeited (200,000 ) 3.40 Vested (125,000 ) 12.26 Non-vested at December 31, 2018 — $ — Total fair value of options that vested during 2018 was approximately $1,533,000 . As of December 31, 2018 , there was no unrecognized compensation costs related to non-vested share-based compensation. Post-retirement compensation of approximately $680,000 and $0 during the years ended December 31, 2018 and 2017 , respectively, was reversed related to options awarded to Mr. Hatem El Khalidi in July 2009. On May 9, 2010, the Board of Directors determined that Mr. El Khalidi forfeited these options and other retirement benefits when he made various demands against the Company and other AMAK shareholders which would benefit him personally and were not in the best interests of the Company and its shareholders. The Company was successful in litigating its right to withdraw the options and benefits and as such, these options and benefits were reversed during the second quarter of 2018. Restricted Stock and Restricted Stock Unit Awards Generally, restricted stock and restricted stock unit awards are granted annually to officers and directors of the Company under the provisions of the Plan. Restricted stock units are also granted ad hoc to attract or retain key personnel, and the terms and conditions under which these restricted stock units vest vary by award. The fair market value of restricted stock units granted is equal to the Company’s closing stock price on the date of grant. Restricted stock units granted generally vest ratably over periods ranging from 2.5 to 5 years. Certain awards also include vesting provisions based on performance metrics. Upon vesting, the restricted stock units are settled by issuing one share of Company common stock per unit. A summary of the status of the Company's restricted stock units activity is as follows: Shares of Restricted Stock Units Weighted Average Grant Date Price per Share Outstanding at January 1, 2018 387,702 $ 11.39 Granted 226,908 11.45 Forfeited (103,637 ) 11.39 Vested (105,298 ) 11.99 Outstanding at December 31, 2018 405,675 $ 11.27 Expected to vest 405,675 As of December 31, 2018 , there was approximately $2.5 million of unrecognized compensation costs related to non-vested restricted share-based compensation that is expected to be recognized over a weighted average period of 1.9 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes consisted of the following: Year ended December 31, 2018 2017 2016 (thousands of dollars) Current federal provision (benefit) $ (74 ) $ (1,202 ) $ 1,691 Current state provision 31 282 18 Deferred federal provision (benefit) (974 ) (6,320 ) 8,645 Deferred state provision 210 81 150 Income tax expense (benefit) $ (807 ) $ (7,159 ) $ 10,504 In connection with the AMAK share repurchase discussed in Note 10, the Company anticipates a Saudi Arabian income tax liability of approximately $802,000 . This amount is included in accrued liabilities and will be paid once the transaction is complete. We had no Saudi Arabian income tax expense or liability in 2017 or 2016 . The difference between the effective tax rate in income tax expense and the Federal statutory rate of 21% for the year ended December 31, 2018 , and 35% for the years ended December 31 2017 and 2016 , is as follows: 2018 2017 2016 (thousands of dollars) Income taxes at U.S. statutory rate $ (822 ) $ 3,885 $ 10,476 State taxes, net of federal benefit 234 235 285 Net operating loss carryback — (961 ) — Research and development credits (263 ) — — Permanent and other items 44 (11 ) (257 ) Deferred tax impact of US tax reform — (10,307 ) — Total tax expense (benefit) $ (807 ) $ (7,159 ) $ 10,504 Permanent differences are primarily due to the Federal manufacturer's deduction, research and development credit, and stock based compensation. The Company has recognized the provisional tax impacts related to the acceleration of depreciation and included these amounts in its consolidated financial statements for the year ended December 31, 2018 . After the analysis, the Company did not identify items for which the income tax effects of the TCJA have not been completed and a reasonable estimate could not be determined as of December 31, 2018 . The changes to existing U.S. tax laws as a result of the TCJA, which will have the most significant impact on the Company's federal income taxes are as follows: Reduction of the U.S. Corporate Income Tax Rate - The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the TCJA, the Company revalued its ending net deferred tax liabilities at December 31, 2017 . Acceleration of Depreciation - The Company recognized a provisional reduction to net deferred tax assets attributable to the accelerated depreciation for certain assets placed into service after September 27, 2017. The provisional estimate was finalized including consideration of TCJA on long term construction projects. Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2018 2017 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (25,169 ) $ (17,014 ) Intangible assets (1,075 ) (778 ) Other assets (40 ) (4 ) Investment in AMAK (671 ) (1,023 ) Total deferred tax liabilities $ (26,955 ) $ (18,819 ) Deferred tax assets: Accounts receivable 238 198 Inventory 133 156 Mineral interests 226 226 Foreign tax credit 802 — Net operating loss carryforward 9,073 — Post-retirement benefits 79 252 Stock-based compensation 954 971 Gross deferred tax assets 11,505 1,803 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 11,279 $ 1,577 Net deferred tax liabilities $ (15,676 ) $ (17,242 ) In connection with the proceeds received from AMAK in connection with its share repurchase program, the Company accrued a deferred tax asset (foreign tax credit) and the corresponding liability for the anticipated Saudi Arabian tax. We provided a valuation allowance in 2018 and 2017 against certain deferred tax assets because of uncertainties regarding their realization. There was no change in the valuation allowance for 2018 or 2017 . We file an income tax return in the U.S. federal jurisdiction and a margin tax return in Texas. We received notification from the Internal Revenue Service ("IRS") in November 2016 on the selection of the December 31, 2014 tax return for audit. The IRS expanded its audit to include the Research and Development ("R&D") Credits for the year ended December 31, 2015. The IRS closed its audit without change in March 2018. We also received notification that Texas will audit our R&D credit calculations for 2014 and 2015. The state of Texas has suspended the audit of the Company's R&D credit. Texas is comprehensively reviewing their audit procedures for consistency. We do not expect any changes related to the Texas audits. Our federal and Texas tax returns remain open for examination for the years 2015 through 2018. We recognized no adjustment for uncertain tax positions. As of December 31, 2018 , and 2017 , no interest or penalties related to uncertain tax positions had been accrued. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We operate in two business segments; specialty petrochemical and specialty waxes. We operate through business segments according to the nature and economic characteristics of our products as well as the manner in which the information is used internally by our key decision maker, who is our Chief Executive Officer. The accounting policies of the reporting segments are the same as those described in Note 2. Our specialty petrochemical segment includes SHR and GSPL. Our specialty wax segment includes TC. We also separately identify our corporate overhead which includes financing and administrative activities such as legal, accounting, consulting, investor relations, officer and director compensation, corporate insurance, and other administrative costs. Year Ended December 31, 2018 Specialty Petrochemical Specialty Wax Corporate Consolidated (in thousands) Net revenues $ 249,679 $ 38,253 $ — $ 287,932 Operating profit (loss) before depreciation and amortization 23,021 1,949 (8,275 ) 16,695 Operating profit (loss) 14,089 (3,427 ) (8,327 ) 2,335 Profit (loss) before taxes 10,705 (4,660 ) (9,184 ) (3,139 ) Depreciation and amortization 8,932 5,376 50 14,358 Capital expenditures 22,431 2,854 — 25,285 Year Ended December 31, 2018 Specialty Petrochemical Specialty Wax Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 40,745 $ — $ — $ 40,745 Total assets 284,367 115,366 91,474 (161,239 ) 329,968 Year Ended December 31, 2017 Specialty Petrochemical Specialty Wax Corporate Consolidated (in thousands) Net revenues $ 210,381 $ 34,762 $ — $ 245,143 Operating profit (loss) before depreciation and amortization 36,511 (35 ) (7,413 ) 29,063 Operating profit (loss) 30,201 (4,624 ) (7,475 ) 18,102 Profit (loss) before taxes 27,852 (5,238 ) (11,764 ) 10,850 Depreciation and amortization 6,310 4,589 62 10,961 Capital expenditures 38 14,015 — 14,053 Year Ended December 31, 2017 Specialty Petrochemical Specialty Wax Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 42,606 $ — $ — $ 42,606 Total assets 265,213 117,579 97,880 (153,346 ) 327,326 |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER COMMON SHARE | NET INCOME (LOSS) PER COMMON SHARE Year ended December 31, 2018 2017 2016 (thousands of dollars) Net income (loss) $ (2,332 ) $ 18,009 $ 19,428 Basic earnings (loss) per common share: Weighted average shares outstanding 24,438 24,294 24,284 Per share amount (dollars) $ (0.10 ) $ 0.74 $ 0.80 Diluted earnings (loss) per common share: Weighted average shares outstanding 24,438 25,129 24,982 Per share amount (dollars) $ (0.10 ) $ 0.72 $ 0.78 Weighted average shares-denominator basic computation 24,438 24,294 24,284 Unvested restricted stock unit grant — 367 310 Effect of dilutive stock options — 468 388 Weighted average shares, as adjusted denominator diluted computation 24,438 25,129 24,982 At December 31, 2018 , 2017 , and 2016 , 745,830 , 1,323,587 and 1,348,437 potential common stock shares, respectively, were issuable upon the exercise of options and warrants. At December 31, 2018, the Company had 397 unvested restricted stock units and 264 stock options that were not included in the computation of diluted earnings per share because the effect of conversion would be anti-dilutive due to the Company incurring net loss for operations for the year ended December 31, 2018. In 2018, we completed an exchange of shares with certain shareholders whereby such shareholders traded 65,000 common shares of TREC in exchange for 24,489 shares of our AMAK stock. The 65,000 shares were accounted for as treasury stock. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The quarterly results of operations shown below are derived from unaudited financial statements for the eight quarters ended December 31, 2018 (in thousands, except per share data, rounding may apply): Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 71,741 $ 68,106 $ 73,416 $ 74,669 $ 287,932 Gross profit 10,140 8,142 6,842 2,694 27,818 Net income (loss) 2,352 2,215 (1,609 ) (5,290 ) (2,332 ) Basic EPS (1) $ 0.10 $ 0.09 $ (0.07 ) $ (0.22 ) $ (0.10 ) Diluted EPS (1) $ 0.09 $ 0.09 $ (0.07 ) $ (0.22 ) $ (0.10 ) Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (2) Total Revenues $ 55,542 $ 62,115 $ 61,508 $ 65,978 $ 245,143 Gross profit 10,618 11,107 9,870 9,966 41,561 Net income 1,487 832 1,718 13,972 18,009 Basic EPS (1) $ 0.06 $ 0.03 $ 0.07 $ 0.58 $ 0.74 Diluted EPS (1) $ 0.06 $ 0.03 $ 0.07 $ 0.56 $ 0.72 (1) Basic and diluted earnings per share are computed independently for each of the quarters presented based on the weighted average number of common shares outstanding during that period. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share. (2) As discussed in Note 16 the TCJA changed the federal corporate income tax rates from 35% to 21% resulting in a benefit from deferred taxes of approximately $10.3 million . |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Consulting fees of approximately $28,000 , $27,000 and $33,000 were incurred during 2018 , 2017 , and 2016 , respectively from IHS Global FZ LLC of which Company Director Gary K. Adams held the position of Chief Advisor – Chemicals until April 1, 2017. At December 31, 2018 , and 2017 , we had no outstanding liability payable to IHS Global FZ LLC. Consulting fees of approximately $94,000 , $74,000 and $73,000 were incurred during 2018 , 2017 , and 2016 , respectively, from Chairman of the Board, Nicholas Carter. Due to his history and experience with the Company and to provide continuity after his retirement, a three year consulting agreement was entered into with Mr. Carter in July 2015. At December 31, 2018 , and 2017 , we had no outstanding liability payable to Mr. Carter. |
RESTRUCTURING AND SEVERANCE EXP
RESTRUCTURING AND SEVERANCE EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND SEVERANCE EXPENSES | NOTE 21 – RESTRUCTURING AND SEVERENCE EXPENSES During 2018, the Company incurred restructuring and severance expenses of approximately $2.3 million related to changes in executive management and the completion of projects in our specialty petrochemical segment. These expenses relate to severance, stock compensation for continued vesting of time-vested shares issued under the Company's long-term incentive plans, and certain employee benefits including medical insurance and vacation. As of December 31, 2018, approximately $1.2 million remains unpaid and is included in accrued liabilities. |
POST-RETIREMENT OBLIGATIONS
POST-RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
POST-RETIREMENT OBLIGATIONS | POST-RETIREMENT OBLIGATIONS In January 2008, an amended retirement agreement was entered into with Mr. Hatem El Khalidi; however, on May 9, 2010, the Board of Directors terminated the agreement due to actions of Mr. El Khalidi. See Note 14. All amounts which had not met termination dates remained recorded until a resolution was achieved. The matter was resolved on May 25, 2018 and as of June 30, 2018, post-retirement obligations of approximately $1.0 million for Mr. El Khalidi have been reversed. As of December 31, 2017, approximately $1.0 million remained outstanding and was included in post-retirement benefits. In July 2015 and June 2018, we entered into retirement agreements with our former CEO, Nicholas Carter, and our former VP of Accounting & Compliance, Connie Cook. Mr. Carter's agreement provides continued welfare benefits for him and his wife for life at the same cost sharing basis as regular employees. Ms. Cook's agreement provides continued welfare benefits for her and her husband until eligible for Medicare. Approximately $377,000 and $249,000 was outstanding at December 31, 2018 , and 2017 , respectively, and included in post-retirement benefits. For the period ended December 31, 2018 , and 2017 , approximately $18,000 and $16,000 , respectively had been paid. |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | TRECORA RESOURCES AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Three years ended December 31, 2018 Description Beginning balance Charged (credited) to earnings Deductions Ending balance ALLOWANCE FOR DEFERRED TAX ASSET December 31, 2016 376,037 — — 376,037 December 31, 2017 376,037 (150,415 ) — 225,622 December 31, 2018 225,622 — — 225,622 Description Beginning balance Charged to earnings Deductions Ending balance ALLOWANCE FOR DOUBTFUL ACCOUNTS December 31, 2016 210,000 183,339 (93,339 ) 300,000 December 31, 2017 300,000 — — 300,000 December 31, 2018 300,000 152,000 — 452,000 |
AMAK FINANCIAL STATEMENTS
AMAK FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
FINANCIAL STATEMENTS | AL MASANE AL KOBRA MINING COMPANY Balance Sheets December 31, 2018 2017 (Expressed in Saudi Riyals) ASSETS Current assets: Cash and cash equivalents 31,510,496 32,325,537 Accounts receivable 16,235,035 8,213,816 Inventories 45,871,120 27,226,932 Advances to shareholders (Note 1) 52,562,028 — Advances to contractors and other 19,168,765 19,731,780 Total current assets 165,347,444 87,498,065 Non-current assets: Property and equipment, net 634,856,075 693,801,671 Development costs, net 155,281,525 191,528,180 Deferred mine closure costs 5,955,999 6,700,499 Total non-current assets 796,093,599 892,030,350 961,441,043 979,528,415 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities 28,756,945 22,672,618 Zakat and income tax liability 5,400,000 3,516,673 Due to shareholders — 453,816 Capital lease obligation, current portion 193,206 — Long-term debt, current portion 30,000,000 65,000,000 Total current liabilities 64,350,151 91,643,107 Non-current liabilities Provision for mine closure costs 16,063,136 15,519,938 Capital lease obligation, net of current portion 359,811 — Long-term debt, net of current portion and deferred finance costs 266,258,712 229,082,810 End-of-service indemnities 3,649,889 2,518,529 Deferred income taxes 3,792,785 11,017,714 Total non-current liabilities 290,124,333 258,138,991 AL MASANE AL KOBRA MINING COMPANY Balance Sheets - (Continued) December 31, 2018 2017 (Expressed in Saudi Riyals) Commitments and contingencies (Note 14) Shareholders' equity Share capital 820,000 780,000 Share premium — 37,546 Accumulated deficit (213,033 ) (187,800 ) Total shareholders' equity 606,967 629,746 961,441 979,528 AL MASANE AL KOBRA MINING COMPANY Statements of Operations December 31, 2018 2017 2016 (Expressed in Saudi Riyals) Revenues 263,377,273 136,629,881 37,202,504 Costs of revenues 255,313,296 162,388,373 101,743,839 Operating income (loss) 8,063,977 (25,758,492 ) (64,541,335 ) General and administrative expenses 29,475,998 28,299,733 26,957,555 Loss from operations (21,412,021 ) (54,058,225 ) (91,498,890 ) Other income (expense) Gain on forgiveness of liabilities and spare parts (Note 8) — — 65,345,250 Finance charges (5,969,821 ) (6,103,680 ) (6,043,410 ) Other income 323,575 893,524 260,953 (5,646,246 ) (5,210,156 ) 59,562,793 Loss before Zakat and income tax (27,058,267 ) (59,268,381 ) (31,936,097 ) Zakat and income tax benefit (expense) 1,824,929 (3,627,193 ) (3,596,244 ) Net loss (25,233,338 ) (62,895,574 ) (35,532,341 ) AL MASANE AL KOBRA MINING COMPANY Statements of Changes in Shareholders' Equity (Expressed in Saudi Riyals) Retained Earnings Share Share (Accumulated Capital Premium Deficit) Total Balance at December 31, 2015 740,000,000 — (89,372,188 ) 650,627,812 Issuance of share capital and premium 40,000,000 37,546,420 — 77,546,420 Net loss — — (35,532,341 ) (35,532,341 ) Balance at December 31, 2016 780,000,000 37,546,420 (124,904,529 ) 692,641,891 Net loss — — (62,895,574 ) (62,895,574 ) Balance at December 31, 2017 780,000,000 37,546,420 (187,800,103 ) 629,746,317 Issuance of share premium — 2,453,580 — 2,453,580 Conversion of share premium to share capital 40,000,000 (40,000,000 ) — — Net loss — — (25,233,338 ) (25,233,338 ) Balance at December 31, 2018 820,000,000 — (213,033,441 ) 606,966,559 AL MASANE AL KOBRA MINING COMPANY Statements of Cash Flows December 31, 2018 2017 2016 (Expressed in Saudi Riyals) Cash flows from operating activities: Net loss (25,233,338 ) (62,895,574 ) (35,532,341 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 125,507,864 83,547,586 43,768,238 Accretion of deferred mine closure costs 543,198 524,829 507,081 Amortization of deferred finance costs 2,175,902 1,610,733 2,147,644 Gain on forgiveness of liabilities — — (65,345,250 ) Deferred income taxes (7,224,929 ) 417,966 1,718,258 Changes in operating assets and liabilities: Accounts receivable (8,021,219 ) (8,213,816 ) 28,351,618 Inventories (18,644,188 ) (11,351,752 ) 15,754,952 Advances to contractors and other 563,016 (3,944,995 ) (6,186,357 ) Accounts payable and accrued liabilities 6,084,327 9,638,009 3,511,632 Zakat and income tax liability 1,883,327 1,583,048 679,206 Pre-export advance payment — — (9,150,880 ) End-of-service indemnities 1,131,360 1,037,893 (264,797 ) Net cash provided by (used in) operating activities 78,765,320 11,953,927 (20,040,996 ) Cash flows from investing activities: Additions to property and equipment (28,945,309 ) (31,550,443 ) (29,246,001 ) AL MASANE AL KOBRA MINING COMPANY Statements of Cash Flows - (Continued) December 31, 2018 2017 2016 (Expressed in Saudi Riyals) Cash flows from financing activities: Issuance of share capital and premium 2,453,580 — 75,092,840 Payments on capital lease obligations (72,788 ) — — Payments on long-term debt — (5,000,000 ) — Net advances from (to) shareholders (53,015,844 ) 403,147 299,231 Net cash provided by (used in) financing activities (50,635,052 ) (4,596,853 ) 75,392,071 Increase (decrease) in cash and cash equivalents (815,041 ) (24,193,369 ) 26,105,074 Cash and cash equivalents, beginning of year 32,325,537 56,518,906 30,413,832 Cash and cash equivalents, end of year 31,510,496 32,325,537 56,518,906 Supplemental cash flow information Cash paid for interest 3,927,778 3,686,000 3,895,766 Cash paid for Zakat and income tax 3,212,813 1,626,179 1,198,780 Supplemental disclosure of non-cash items Assets acquired through capital lease obligations 625,805 — — |
AMAK ORGANIZATION AND BUSINESS
AMAK ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
ORGANIZATION AND BUSINESS | BUSINESS AND OPERATIONS OF THE COMPANY Trecora Resources, formerly Arabian American Development Company, (the "Company") was organized as a Delaware corporation in 1967. The Company's principal business activities are the manufacturing of various specialty petrochemical products, specialty waxes and providing custom processing services. The Company owns 33% of a Saudi Arabian joint stock company, Al Masane Al Kobra Mining Company ("AMAK") (see Note 10) and approximately 55% of the capital stock of a Nevada mining company, Pioche Ely Valley Mines, Inc. ("PEVM"), which does not conduct any substantial business activity but owns undeveloped properties in the United States. The Company's specialty petrochemical operations are primarily conducted through a wholly-owned subsidiary, Texas Oil and Chemical Co. II, Inc. ("TOCCO"). TOCCO owns all of the capital stock of South Hampton Resources, Inc. ("SHR") and Trecora Chemical, Inc. ("TC"). SHR owns all of the capital stock of Gulf State Pipe Line Company, Inc. ("GSPL"). SHR owns and operates a specialty petrochemical product facility near Silsbee, Texas which manufactures high purity hydrocarbons used primarily in polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, Canadian tar sands, and in the catalyst support industry. TC owns and operates a facility located in Pasadena, Texas which manufactures specialty waxes and provides custom processing services. These specialty waxes are used in the production of coatings, hot melt adhesives and lubricants. GSPL owns and operates pipelines that connect the SHR facility to a natural gas line, to SHR's truck and rail loading terminal and to a major petroleum pipeline owned by an unaffiliated third party. We attribute revenues to countries based upon the origination of the transaction. All of our revenues for the years ended December 31, 2018 , 2017 , and 2016 , originated in the United States. In addition, all of our long-lived assets are in the United States. For convenience in this report, the terms "Company", "our", "us" or "we" may be used to refer to Trecora Resources and its subsidiaries. |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ORGANIZATION AND BUSINESS | Note 1 – Organization and Business Organization Al Masane Al Kobra Mining Company is a Saudi Arabian closed joint stock company approved by the Minister of Commerce and Industry Decree Number 247/Q dated 9/10/1428 (October 21, 2007) and registered in Jeddah under Commercial Registration No. 4030175345 on 7/1/1429 (January 16, 2008). During 2015, the head office was moved from Jeddah to Najran. Accordingly, Najran Commercial Registration No. 5950017523 dated 03/11/1431H (October 11, 2010) was modified to be the main Commercial Registration. Unless the context requires otherwise, references to “we”, “us”, “our”, “AMAK”, and the “Company” are intended to mean Al Masane Al Kobra Mining Company. All amounts are expressed in Saudi Riyals (SR) unless otherwise noted. During 2009 the authorized capital of the Company was 450,000,000 consisting of 45 million shares of 10 each of which 50% were issued for cash. The remaining 50% were issued for the contribution of mining rights and assets from Trecora Resources (Trecora) subject to Trecora’s liability for a loan in the amount of 41,250,000 due to the Ministry of Finance and National Economy. The mining rights in Al Masane mine were originally granted by Royal Decree Number M/17 effective 1/12/1413 (May 22, 1993) for a period of thirty years, with a right of renewal for a further period of twenty years to Trecora. The mining rights granted Trecora the right of exploitation in Al Masane mine located in Najran, Saudi Arabia, with an area of 44 square kilometers for a surface rental of 10,000 per square kilometer per year, i.e. 440,000 per year. As per the Ministry of Petroleum and Mineral Resources resolution dated 13/9/1429 (13/9/2008) and the ministry subsequent letter dated 2/1/1430 (30/12/2008), the aforementioned rights were transferred to us. During 2011 the Company increased its authorized share capital by SR 50,000,000 to SR 500,000,000 and issued 5,000,000 shares of 10 each at a price of SR 28 each resulting in a share premium of SR 90,000,000 . The entire 5,000,000 shares were issued for cash to Arab Mining Company (ARMICO) headquartered in Amman, Jordan. During 2013 the Company increased its authorized share capital by SR 50,000,000 to SR 550,000,000 and issued 5,000,000 shares of 10 each at a price of SR 30 each resulting in a share premium of SR 100,000,000 . The shares were issued for cash to existing shareholders. During 2015 the Company increased its authorized share capital by SR 190,000,000 to SR 740,000,000 and issued 19,000,000 shares of 10 each by transferring from share premium accounts. During 2016 the Company increased its authorized share capital by SR 40,000,000 to SR 780,000,000 and issued 4,000,000 shares of 10 each at a price of SR 20 each resulting in a share premium of SR 35,092,840 . During 2018 the Company increased share premium by SR 2,453,580 for shares that were previously issued. During 2018 the Company increased its authorized share capital by SR 40,000,000 to SR 820,000,000 and issued 4,000,000 shares of 10 each by transferring from share premium accounts. During the Company’s Extraordinary General Assembly Meeting in October of 2018, the shareholders approved to repurchase 2,500,000 shares from the shareholders at a price of SR 30 each and to register these shares as treasury shares. In December 2018, the Board unanimously approved this proposal and authorized the CEO to proceed with the repurchase. The Company began advancing shareholders their portion of these proceeds in anticipation of completing and finalizing the treasury stock repurchase in 2019. As of December 31, 2018, the Company had advanced SR 52,562,028 to shareholders. Except for Trecora and ARMICO, all other shareholders are Saudi nationals or companies wholly owned by Saudi nationals. Our ownership is as follows: Shares Ownership Percentage Saudi shareholders 38,349,184 46.8 Trecora (US Company) 27,402,876 33.4 ARMICO (Pan Arab Organization) 16,247,940 19.8 82,000,000 100.00 Business and operations Our principal activity is to produce zinc and copper concentrates and silver and gold doré as per the license Number 993/2 dated 16/7/1428 (July 31, 2007) issued by Saudi Arabian General Investment Authority (SAGIA). We commenced our commercial production on July 1, 2012. During 2015, we received a new mining lease for an area near our current mining area for the Guyan ancient mine. On 16/11/1428 (November 26, 2007), while the Company was in the registration process, the Company signed a contract with China National Geological and Mining Corporation (CGM) for underground mine rehabilitation, pre-production activity, and on-going mine development/production and with Nesma & Partners Contracting Company Limited (Nesma) for engineering, procurement, construction, commissioning and hand over of the concentrator surface works and the related infrastructure facilities. The handover of these facilities was finalized on November 28, 2011. In late 2014, we renegotiated a more favorable plant operations and maintenance contract with CGM. CGM ran our mining operations until November 2015, at which time the Board of Directors cancelled the CGM and Nesma contract and temporarily suspended operations of the Company. See Note 8. This planned, temporary shutdown of the facility was due to the continued depressed commodity price environment as well as needs for renovation and maintenance. Our focus during the renovation focused on improving recoveries overall and upgrading the precious metals circuit through the installation of SART (sulfidization, acidification, recycling, and thickening) modifications which are expected to lower chemical use, thereby reducing operating costs. In February 2016, we entered into a new operating and rehabilitation contract with a different vendor under more favorable terms. We resumed operations in the first quarter of 2017 and generated enough ore for two shipments in 2017. In 2018, we resumed our schedule of 4 shipments a year. |
AMAK SUMMARY OF SIGNIFICANT ACC
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation – The consolidated financial statements include the balance sheets, statements of income, stockholders' equity, and cash flows of the Company, TOCCO, TC, SHR, GSPL and PEVM. Other entities which are not controlled but over which the Company has the ability to exercise significant influence such as AMAK, are accounted for using the equity method of accounting. All intercompany profits, transactions and balances have been eliminated. Cash, Cash Equivalents and Short-Term Investments – Our principal banking and short-term investing activities are with local and national financial institutions. Short-term investments with an original maturity of three months or less are classified as cash equivalents. Inventories – Finished products and feedstock are recorded at the lower of cost, determined on the first-in, first-out method (FIFO), or market for SHR. For TC, inventory is recorded at the lower of cost or market as follows: (1) raw material cost is calculated using the weighted-average cost method and (2) product inventory cost is calculated using the specific cost method. Trade Receivables and Allowance for Doubtful Accounts – We evaluate the collectability of our trade receivables and adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which we become aware. For the year ended December 31, 2018, we increased the balance by $152,000 due to concerns regarding collectability for a specific customer. For the year ended December 31, 2017, the allowance balance was not increased. In 2016, we increased the balance by $90,000 due to an increase in sales in countries where there is a greater risk of default and limited recourse should this occur. We track customer balances and past due amounts to determine if customers may be having financial difficulties. This, along with historical experience and a working knowledge of each customer, helps determine accounts that should be written off. No amounts were written off in 2018 or 2017. During 2016 we wrote off one account for approximately $93,000 . Notes Receivable – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a non-interest note receivable is recorded with an imputed interest rate. There were no notes receivable outstanding as of December 31, 2018. The interest rate used on outstanding notes during December 31, 2018 and 2017 was 4% . The unearned interest was reflected as a discount against the note balance. The Company evaluates the collectability of notes based upon a working knowledge of the customer. The notes are receivable from custom processing customers with whom we maintain a close relationship. Thus, all amounts due under the notes receivable are considered collectible, and no allowance was recorded at December 31, 2018 and 2017 , respectively. Plant, Pipeline and Equipment – Plant, pipeline and equipment are stated at cost. Depreciation is provided over the estimated service lives using the straight-line method. Gains and losses from disposition are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. Major renewals and improvements are capitalized. Interest costs incurred to finance expenditures during construction phase are capitalized as part of the historical cost of constructing the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized interest costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Labor costs incurred to self-construct assets are capitalized as part of the historical cost the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized labor costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Platinum catalyst is included in plant, pipeline and equipment at cost. Amortization of the catalyst is based upon cost less estimated salvage value of the catalyst using the straight line method over the estimated useful life (see Note 8). Goodwill and Other Intangible Assets – Goodwill represents the future economic benefits arising from other assets acquired in the acquisition of TC that are not individually identified and separately recognized. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. Estimates of fair value are based on appraisals, market prices for comparable assets, or internal estimates of future net cash flows. Definite-lived intangible assets consist of customer relationships, licenses, permits and developed technology that were acquired as part of the Acquisition of TC. The majority of these assets are being amortized using discounted estimated future cash flows over the term of the related agreements. Intangible assets associated with customer relationships are being amortized using the discounted estimated future cash flows method based upon assumed rates of annual customer attrition. We continually evaluate the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they will be removed from the consolidated balance sheets. Business Combinations and Related Business Acquisition Costs – Assets and liabilities associated with business acquisitions are recorded at fair value using the acquisition method of accounting. We allocate the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. We may use third-party valuation specialists to assist us in this allocation. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition. The fair value of property, plant and equipment and intangible assets are based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Business acquisition costs are expensed as incurred and are reported as general and administrative expenses in the consolidated statements of income. We define these costs to include finder's fees, advisory, legal, accounting, valuation, and other professional consulting fees, as well as, travel associated with the evaluation and effort to acquire specific businesses. Investment in AMAK – We account for our investment in AMAK using the equity method of accounting under which we record in income our share of AMAK's income or loss for each period. The amount recorded is also adjusted to reflect the amortization of certain differences between the basis in our investment in AMAK and our share of the net assets of AMAK as reflected in AMAK's financial statements (see Note 10). Any proceeds received from or payments made to AMAK are recorded as decreases or increases in the balance of our investment. We assess our investment in AMAK for impairment when events are identified, or there are changes in circumstances that may have an adverse effect on the fair value of the investment. We consider recoverable ore reserves, changes in commodity prices, and the amount and timing of the cash flows to be generated by the production of those reserves, as well as, recent equity transactions within AMAK. Other Assets – Other assets include a license used in specialty petrochemical operations, spare parts inventory and certain specialty petrochemical assets. Beginning January 1, 2017, due to the expansion of our plant assets at SHR and TC, we began inventorying spare parts for the repair and maintenance of our plant, pipeline and equipment. Spare parts are accounted for on the first-in, first-out method (FIFO). Long-Lived Assets Impairment – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on the undiscounted net cash flows to be generated from the asset's use. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis although other factors including the state of the economy are considered. Revenue Recognition – The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606 ("ASC 606"), Revenue from Contracts with Customers, and its amendments with a date of the initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. ASC 606 outlines a single comprehensive model for an entity to use in accounting for revenue arising from all contracts with customers, except where revenues are in scope of another accounting standard. ASC 606 superseded the revenue recognition requirements in ASC Topic 605, " Revenue Recognition", and most industry specific guidance. ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services. ASC 606 also requires certain additional revenue-related disclosures. The Company applied the modified retrospective approach under ASC 606 which allows for the cumulative effect of adopting the new guidance on the date of initial application. Use of the modified retrospective approach means the Company's comparative periods prior to initial application are not restated. The initial application was applied to all contracts at the date of the initial application. The Company has determined that the adjustments using the modified retrospective approach did not have a material impact on the date of the initial application along with the disclosure of the effect on prior periods. Accounting Policy Beginning on January 1, 2018, revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. In evaluating when a customer has control of the asset we primarily consider whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer has accepted delivery and a right to payment exists. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales and processing. The Company does not offer material rights of return or service-type warranties. For the year ended December 31, 2017 the Company recognized revenue according to FASB ASC Topic 605 ("ASC 605"), " Revenue Recognition" , when: (1) the customer accepted delivery of the product and title had been transferred or when the service was performed and the Company had no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction had occurred; (3) price was fixed and determinable; and (4) collection was assured. Product sales generally met these criteria, and revenue was recognized, when the product was delivered or title was transferred to the customer. Sales revenue was presented net of discounts, allowances, and sales taxes. Freight costs billed to customers were recorded as a component of revenue. Revenues received in advance of future sales of products or prior to the performance of services were presented as deferred revenues. Shipping and handling costs were classified as cost of product sales and processing and were expensed as incurred. Nature of goods and services The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, disaggregation of revenues, and contract balance disclosures, see Note 17. Specialty petrochemical segment The specialty petrochemical segment of the Company produces eight high purity hydrocarbons and other petroleum based products including isopentane, normal pentane, isohexane and hexane. These products are used in the production of polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, crude oil from the Canadian tar sands, and in the catalyst support industry. SHR's specialty petrochemical products are typically transported to customers by rail car, tank truck, iso-container and ship. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected 30 to 60 days subsequent to point of sale. Processing Fees – The Company's services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements the customer retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Specialty Wax segment The specialty wax segment of the Company manufactures and sells specialty polyethylene and poly alpha olefin waxes and also provides custom processing services for customers. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Processing Fees – The Company's promised services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements and Purchase Order Arrangements, the customer typically retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction and Purchase Order Arrangement is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Shipping and Handling Costs – Shipping and handling costs are classified as cost of product sales and processing and are expensed as incurred. Retirement Plan – We offer employees the benefit of participating in a 401(k) plan. We match 100% up to 6% of pay with vesting occurring over 2 years. For years ended December 31, 2018 , 2017 , and 2016 , matching contributions of approximately $1,502,000 , $1,412,000 , and $1,195,000 , respectively were made on behalf of employees. Environmental Liabilities – Remediation costs are accrued based on estimates of known environmental remediation exposure. Ongoing environmental compliance costs, including maintenance and monitoring costs, are expensed as incurred. Other Liabilities – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a note receivable and a deferred liability are recorded to recover the project costs which are then capitalized. At times instead of a note receivable being established, the customer pays an upfront cost. The amortization of other liabilities is recorded as a reduction to depreciation expense over the life of the contract with the customer. As of December 31 of each year, depreciation expense was offset and reduced by approximately $0.8 million , $0.8 million , and $1.0 million , for 2018 , 2017 , and 2016 , respectively. Net Income Per Share – We compute basic income per common share based on the weighted-average number of common shares outstanding. Diluted income per common share is computed based on the weighted-average number of common shares outstanding plus the number of additional common shares that would have been outstanding if potential dilutive common shares, consisting of stock options, unvested restricted stock units, and shares which could be issued upon conversion of debt, had been issued (see Note 18). Foreign Currency – The functional currency for the Company and each of the Company's subsidiaries is the US dollar (USD). Transaction gains or losses as a result of transactions denominated and settled in currencies other than the USD are reflected in the statements of income as foreign exchange transaction gains or losses. We do not employ any practices to minimize foreign currency risks. The functional and reporting currency of AMAK is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the USD at a fixed exchange rate of 1 USD to 3.75 SR; therefore, we translate SR into our reporting currency of the USD for income statement and balance sheet purposes using the fixed exchange rate. As of December 31, 2018 , 2017 and 2016 , foreign currency translation adjustments were not significant. Management Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include allowance for doubtful accounts receivable and inventory obsolescence; assessment of impairment of our long-lived assets, goodwill, intangible assets and investments, litigation liabilities, post-retirement benefit obligations, guarantee obligations, environmental liabilities, income taxes and deferred tax valuation allowances. Actual results could differ from these estimates. Share-Based Compensation – We recognize share-based compensation of stock options granted based upon the fair value of options on the grant date using the Black-Scholes pricing model (see Note 15). Share-based compensation expense recognized during the period is based on the fair value of the portion of share-based payments awards that is ultimately expected to vest. Share-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2018 , 2017 , and 2016 includes compensation expense based on the estimated grant date fair value for awards that are ultimately expected to vest, and accordingly has been reduced for estimated forfeitures. Estimated forfeitures at the time of grant are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Guarantees – We may enter into agreements which contain features that meet the definition of a guarantee under FASB ASC 460 "Guarantees" (see Note 14). These arrangements create two types of obligations: a) We have a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and b) We have an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probable that one or more future events will occur, triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated. Fair Value – The carrying value of cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of variable rate long term debt and notes payable reflect recent market transactions and approximate carrying value. We used other observable inputs that would qualify as Level 2 inputs to make our assessment of the approximate fair value of our cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, other liabilities, notes payable and variable rate long term debt. The fair value of the derivative instruments are described below. We measure fair value by ASC Topic 820 Fair Value. ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard amends numerous accounting pronouncements but does not require any new fair value measurements of reported balances. ASC Topic 820 emphasizes that fair value, among other things, is based on exit price versus entry price, should include assumptions about risk such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. When considering the assumptions that market participants would use in pricing the asset or liability, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy prioritizes inputs used to measure fair value into three broad levels. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Derivatives – We record derivative instruments as either an asset or liability measured at fair value. Changes in the derivative instrument's fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument's gains and losses to offset related results on the hedged item in the income statement, to the extent effective, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized. Our estimate of the potential outcome of any uncertain tax issues is subject to management's assessment of relevant risks, facts, and circumstances existing at that time. We use a more likely than not threshold for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. To the extent that our assessment of such tax position changes, the change in estimate is recorded in the period in which the determination is made. We report tax-related interest and penalties as a component of income tax expense. On December 22, 2017, Public Law No. 115-97 known as the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA included a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. federal corporate income tax rate from a maximum of 35 percent to a flat 21 percent for tax years effective January 1, 2018. The TCJA also implemented a territorial tax system, provided for a one-time deemed repatriation tax on unrepatriated foreign earnings, eliminated the alternative minimum tax (AMT), made AMT credit carryforwards refundable, and permitted the acceleration of depreciation for certain assets placed into service after September 27, 2017. In addition the TJCA created prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. The Company has elected to recognize the income tax effects of the TCJA in its financial statements in accordance with Staff Accounting Bulletin 118 (SAB 118), which provides guidance for the application of ASC Topic 740 Income Taxes , in the reporting period in which the TCJA was signed into law. Under SAB 118 when a Company does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA it will recognize provisional amounts if a reasonable estimate can be made. If a reasonable estimate cannot be made then no impact is recognized for the effect of the TCJA. SAB 118 permits an up to one year measurement period to finalize the measurement of the impact of the TCJA. Reclassifications – Certain reclassifications have been made to prior year balances to conform with the current year presentation. Subsequent Events – The Company has evaluated subsequent events through March 15, 2019 , the date that the consolidated financial statements were approved by management. New Accounting Pronouncements In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-9, Revenue from Contracts with Customers ("ASU 2014-9"). ASU 2014-9 supersedes the revenue recognition requirements of FASB Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and most industry-specific guidance throughout the Accounting Standards Codification, resulting in the creation of FASB ASC Topic 606, Revenue from Contracts with Customers . ASU 2014-9 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU provides alternative methods of retrospective adoption and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company completed its assessment of the impact of the adoption of ASU 2014-9 across all revenue streams. This included reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. We completed contract reviews and validated results of applying the new revenue guidance (Note 2). See Revenue Recognition policy note. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to ASC 842, Leases. ASU 2018-11 provided entities with an alternative modified transition method to elect not to recast the comparative periods presented when adopting ASC 842. The new standard provides a number of optional practical expedients in transition. The Company expects to elect: (1) the ‘package of practical expedients’, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs and (2) the use-of-hindsight. In addition, the new standard provides practical expedients for an entity’s ongoing accounting that the Company anticipates making, such as the (1) the election for certain classes of underlying asset to not separate non-lease components from lease components and (2) the election for short-term lease recognition exemption for all leases that qualify. The Company will adopt ASU 842 as of January 1, 2019, using the alternative modified transition method. In preparation of adopting ASC 842, the Company is implementing additional internal controls to enable future preparation of financial information in accordance with ASC 842. The Company has also substantially completed its evaluation of the impact on the Company’s lease portfolio. The Company believes the largest impact will be on the consolidated balance sheets for the accounting of rail cars, equipment and office leases, which represents a majority of its operating leases it has entered into as a lessee. These leases will be recognized under the new standard as right of use assets (“ROU”) operating lease liabilities. The Company will also be required to provide expanded disclosures for its leasing arrangements. As of December 31, 2018, the Company had approximately $ 18.1 million of undiscounted future minimum operating lease commitments that are not recognized on its consolidated balance sheets as determined under the current standard. For a lessee, the results of operations are not expected to significantly change after adoption of the new standard. While substantially complete, the Company is still in the process of finalizing its evaluation of the effect of ASU 842 on the Company’s financial statements and disclosures, including the determination of the Company’s incremental borrowing rate for each of the operating leases to estimate the interest rate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. The Company will finalize its accounting assessment and quantitative impact of the adoption during the first quarter of fiscal year 2019. In January 2017 the FASB issued ASU No. 2017-4, Intangibles – Goodwill and Other (Topic 350) . The amendments in ASU 2017-4 simplify the measurement of goodwill |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Summary of Significant Accounting Policies The accompanying financial statements have been prepared using U.S. generally accepted accounting principles. The following is a summary of our significant accounting policies: Cash and cash equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Accounts receivable We evaluate the collectability of our accounts receivable and the adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which the Company becomes aware. During the years ended December 31, 2018, 2017, and 2016, we sold our concentrates and doré pursuant to a sales contract with one customer. No amounts have been written off for the years ended December 31, 2018, 2017, and 2016. In addition, we determined that an allowance for doubtful accounts was not necessary at December 31, 2018 and 2017. Inventories The components of inventories include mill stockpiles, precious metal doré, chemicals, and mining supplies. Inventories are stated at the lower of weighted-average cost or market. Costs of mill stockpiles inventory include labor and benefits, supplies, energy, depreciation, depletion, amortization, and other necessary costs incurred with the extraction and processing of ore. Corporate general and administrative costs are not included in inventory costs. Because it is generally impracticable to determine the minerals contained in mill stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to the mill stockpiles is based on surveyed volumes of mined material and daily production records. Expected mineral recovery rates from the mill stockpiles are determined by various metallurgical testing methods. Property and equipment Property and equipment is carried at cost less accumulated depreciation. Expenditures for replacements and improvements are capitalized. Costs related to periodic maintenance are expensed as incurred. Depletion of the mining assets is determined using the unit-of-production method based on total estimated proven and probable reserves. Depletion and amortization using the unit-of-production method is recorded upon extraction of the ore, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over their estimated useful lives ranging from 3 to 20 years. Borrowing costs that are directly attributable to the acquisition, construction or production of assets are capitalized as part of the cost of those assets. Assets under construction are capitalized in the construction in progress account. Upon completion, the cost of the related asset is transferred to the appropriate category of property and equipment. Development costs Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources are charged to expense as incurred. Development costs are capitalized beginning after proven and probable reserves have been established. Development costs include costs incurred in mine pre-production activities undertaken to gain access to proven and probable reserves, including shafts, drifts, ramps, permanent excavations, infrastructure and removal of overburden. These costs are deferred net of the proceeds from the sale of any production during the development period and then amortized using an estimated unit-of-production method. If a mine is no longer considered economical, the accumulated costs are charged to the statement of operations in the year in which the determination is made. Asset impairment We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Long-lived assets are evaluated for impairment under the two-step model. When events or circumstance suggest impairment of long-lived assets, estimated undiscounted future net cash flows are calculated using future estimated commodity prices, proven and probable reserves, and estimated net proceeds from the disposition of assets on retirement, less operating, sustaining capital, and reclamation costs. If it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. Fair value is generally determined using valuation techniques such as estimated future cash flows. Because the cash flows used to assess recoverability of our long-lived assets and measure fair value of our mining operations require us to make several estimates and assumptions that are subject to risk and uncertainty, changes in these estimates and assumptions could result in the impairment of our long-lived asset values. Based on our evaluation, we recorded no impairment losses during the years ended December 31, 2018, 2017 and 2016. End-of-service indemnities Employee end-of-service benefits are accrued for the benefit of employees under the terms and conditions of Saudi Labor Law and Regulations and their employment contracts. End-of-service indemnities are provided for and accrued in the financial statements based on the respective employees' salaries and length of service. Pre-export Advances At times we receive advances on a pre-export basis against a portion of our inventory on hand prior to shipment. These advances bear interest at 2.5% and are repaid from the proceeds from final concentrate sales. We did not have an outstanding advance liability at December 31, 2018 and 2017. Foreign currency Our functional currency is the Saudi Riyal (SR). In June 1986, the Saudi Riyal was officially pegged to the U.S. Dollar at a fixed exchange rate of 1 U.S. Dollar to 3.75 riyals. Foreign currency transactions are translated into Saudi Riyals at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rates prevailing at that date. Any gains and losses from settlement and translation of foreign currency transactions are included in the statement of operations. There were no material foreign-currency exchange gains or losses or translation adjustments during the years ended December 31, 2018, 2017, and 2016. Leasing arrangements We periodically lease operating equipment, facilities, and office buildings. Rentals payable under operating leases are charged to the statements of operations on a straight-line basis over the term of the relevant lease. For any capital leases, the present value of future minimum lease payments at the inception of the lease is reflected as an asset and a liability in the balance sheet. Amounts due within one year are classified as short-term liabilities and the remaining balance as long-term liabilities. Finance charges are charged to the statement of operations. Operating lease expense amounted to approximately SR 1,619,000 , SR 1,454,000 and SR 442,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Environmental costs Environmental costs are expensed or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can reasonably be estimated. Ongoing compliance costs are expensed as incurred. Asset retirement obligations and costs We record the fair value of our estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period in which the obligation is incurred. AROs associated with long-lived assets are those for which there is a legal obligation to settle under various laws, statues, or regulations. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of revenues. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated (primarily on a unit-of-production basis) over the asset’s respective useful life. Our AROs consist primarily of costs associated with mine reclamation and closure activities and are included in deferred mine closure costs on the accompanying balance sheets. At least annually, we review our ARO estimates for changes in the projected timing and changes in cost estimates and additional AROs incurred during the period. Zakat and income tax We are subject to the Regulations of the General Authority of Zakat and Tax (GAZT) in the Kingdom of Saudi Arabia. Under these regulations, Zakat is payable at 2.5% on the basis of the portion of our Zakat base attributable to our Saudi stockholders, and income tax is payable at 20% on the portion of our taxable income attributable to our non-Saudi stockholders. Zakat and income tax are provided on an accrual basis. Any difference in the estimate is recorded when the final assessment is approved, at which time the provision is cleared. We account for deferred income taxes on non-Saudi owners utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the income tax basis of assets and liabilities, as measured by the effective tax rate. When appropriate, we evaluate the need for a valuation allowance based on a more likely than not threshold to reduce deferred tax assets to estimated recoverable amounts. We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We report tax-related interest and penalties as a component of Zakat and income tax expense. We recognized no material adjustment for unrecognized income tax liabilities. Zakat and income tax returns for the years from 2010 to 2017 are currently under review with GAZT. Reclassifications Certain reclassifications have been made to the prior periods to conform with current year presentation. Revenue recognition We sell our products pursuant to sales contracts entered into with a customer who acts as an intermediary and resells our products to end users. Revenue is recognized when title and risk of loss pass to the customer and when collectability is reasonably assured. The passing of title and risk of loss to the customer is based on terms of the sales contract, generally upon shipment or delivery of product. Sales are recorded based on a provisional sales price or a final sales price calculated in accordance with the terms specified in the relevant sales contract. Under the long-established structure of sales agreements prevalent in the industry, the copper and zinc contained in concentrate is generally provisionally priced at the time of shipment. The provisional price received at the time of shipment is later adjusted to a final price based on quoted monthly average spot prices on the London Metal Exchange (LME) for a specified future month. We record revenues at the time of shipment (when title and risk of loss pass) based on then-current LME prices, and we account for any changes between the sales price recorded at the time of shipment and subsequent changes in the LME prices through the date of final pricing as gains or losses from a derivative embedded in the sales contract (a futures contract initiated at the date of shipment and settled upon the determination of the final price) which is bifurcated and separately accounted for at fair value. See Note 16. Revenues from concentrate sales are recorded net of treatment and refining charges. These allowances are a negotiated term of each contract. Treatment and refining charges represent payments or price adjustments to smelters and refiners and are either fixed, or in certain cases, vary with the price of metals (referred to as price participation). Management estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation and amortization; zakat and income taxes; environmental obligations; reclamation and closure costs; estimates of recoverable materials in mill stockpiles; fair value of embedded derivatives; end-of-service indemnities; and asset impairment, including estimates used to derive future cash flows associated with those assets. Actual results could differ from these estimates. Recent accounting pronouncements In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the revenue recognition requirements of FASB Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and most industry-specific guidance throughout the Accounting Standards Codification, resulting in the creation of FASB ASC Topic 606, Revenue from Contracts with Customers. ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. For nonpublic companies this ASU provides alternative methods of retrospective adoption and is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of these amendments, although it does not expect the amendments to have a significant impact to the Company’s financial position or results of operation. In February 2016 the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and does not expect to early adopt. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above. Subsequent events We have evaluated events and transactions subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through March 6, 2019, the date on which the financial statements were available to be issued. |
AMAK LIQUIDITY AND CAPITAL RESO
AMAK LIQUIDITY AND CAPITAL RESOURCES | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
LIQUIDITY AND CAPITAL RESOURCES | Liquidity and Capital Resources As shown in the financial statements, we have incurred three consecutive years of net losses however, the Company resumed full operations and had operating income and cash provided from operations during the year ended December 31, 2018. In addition, we expect to update our mineral resources and life of mine in 2019 with the expectation that the life of mine will be extended another two years. We believe that our continued operations and the adjusted repayment terms of our outstanding debt will provide us the necessary liquidity and capital resources. |
AMAK INVENTORIES
AMAK INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory [Line Items] | |
INVENTORIES | INVENTORIES Inventories include the following at December 31: 2018 2017 (thousands of dollars) Raw material $ 4,742 $ 3,703 Work in process 173 27 Finished products 11,624 14,720 Total inventory $ 16,539 $ 18,450 Inventory serves as collateral for our amended and restated loan agreement with a domestic bank (see Note 12). Inventory included products in transit valued at approximately $4.1 million and $3.7 million at December 31, 2018 , and 2017 , respectively. |
AMAK | |
Inventory [Line Items] | |
INVENTORIES | Inventories Inventories consisted of the following at: December 31, 2018 2017 Ore concentrates 17,020,657 12,118,132 Stockpile ore 19,134,297 9,417,626 Precious metal dore 2,159,192 — Explosives 1,134,728 485,668 Chemicals and other 6,422,246 5,205,506 45,871,120 27,226,932 As discussed in Note 2, we can receive advances on a pre-export basis on our mill stockpiles. |
AMAK ADVANCES TO CONTRACTORS AN
AMAK ADVANCES TO CONTRACTORS AND OTHER | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ADVANCES TO CONTRACTORS AND OTHER | Advances to Contractors and Other Advances to contractors and other consisted of the following at: December 31, 2018 2017 Advances to contractors 15,127,502 11,992,870 Prepaid expenses 1,196,218 4,385,449 Other miscellaneous advances and receivables 2,845,045 3,353,461 19,168,765 19,731,780 |
AMAK PROPERTY AND EQUIPMENT
AMAK PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |
PROPERTY AND EQUIPMENT | PLANT, PIPELINE AND EQUIPMENT Plant, pipeline and equipment include the following at December 31: 2018 2017 (thousands of dollars) Platinum catalyst $ 1,612 $ 1,612 Catalyst 3,131 779 Land 5,428 5,428 Plant, pipeline and equipment 253,905 186,946 Construction in progress 4,343 50,996 Total plant, pipeline and equipment 268,419 245,761 Less accumulated depreciation (73,762 ) (63,240 ) Net plant, pipeline and equipment $ 194,657 $ 182,521 Plant, pipeline and equipment serve as collateral for our amended and restated loan agreement with a domestic bank (see Note 12). Interest capitalized for construction for 2018 , 2017 and 2016 was approximately $731,000 , $937,000 and $450,000 , respectively. Labor capitalized for construction for 2018 , 2017 and 2016 was approximately $2,307,000 , $4,344,000 and $2,889,000 , respectively. Catalyst amortization relating to the platinum catalyst which is included in cost of sales was approximately $59,000 , $25,000 and $98,000 for 2018 , 2017 and 2016 , respectively. |
AMAK | |
Property, Plant and Equipment [Line Items] | |
PROPERTY AND EQUIPMENT | Property and Equipment Property and equipment, net consisted of the following at: December 31, 2018 2017 Buildings 191,041,157 191,041,157 Leasehold improvements 1,838,317 1,838,317 Heavy equipment 118,125,568 110,259,122 Motor vehicles 22,467,300 22,783,108 Civil works 15,662,671 15,582,921 Tailings dam 23,042,594 22,684,394 Plant and machinery 324,372,695 315,029,454 Mining assets – rehabilitation costs 98,894,826 98,894,826 Mining assets – underground development costs 267,128,896 254,832,012 Construction in progress 5,106,409 5,532,817 1,067,680,433 1,038,478,128 Less accumulated depreciation, depletion and amortization (432,824,358 ) (344,676,457 ) 634,856,075 693,801,671 Property and equipment serve as collateral for the SIDF loan agreement (see Note 10). Depreciation, depletion and amortization expense related to property and equipment was approximately, SR 88,000,000 and SR 64,300,000 for years ended December 31, 2018 and 2017. During 2016, the mine was temporarily closed for renovation, therefore, no amortization or depletion was recorded on certain mining assets. |
AMAK DEVELOPMENT COSTS
AMAK DEVELOPMENT COSTS | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
DEVELOPMENT COSTS | Development Costs Development costs, net consisted of the following at: December 31, 2018 2017 Cost 289,973,237 289,973,237 Accumulated amortization (134,691,712 ) (98,445,057 ) 155,281,525 191,528,180 Development costs are amortized using the unit of production method upon extraction of the ore. Amortization expenses related to development costs was approximately SR 36,250,000 and SR 18,200,000 for the year ended December 31, 2018 and 2017, respectively. |
AMAK ACCOUNTS PAYABLE, ACCRUED
AMAK ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES | ACCRUED LIABILITIES Accrued liabilities at December 31 are summarized as follows: 2018 2017 (thousands of dollars) Accrued state taxes $ 210 $ 272 Accrued payroll 936 1,407 Accrued interest 31 30 Accrued officer compensation — 500 Accrued restructuring & severance expenses (Note 21) 1,221 — Accrued foreign taxes 802 — Other liabilities 2,239 1,752 Total $ 5,439 $ 3,961 |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES | Accounts Payable, Accrued Liabilities and Forgiveness of Liabilities Accounts payable and accrued liabilities consisted of the following at: December 31, 2018 2017 Accounts payable and accrued liabilities 26,925,170 17,858,012 Other 381,763 2,802,493 Accrued salaries and payroll expenses 1,450,012 2,012,113 28,756,945 22,672,618 On March 31, 2016, the Company entered into finalization and discharge memorandums of understanding (MOU’s) with their former mine operator CGM and subcontractor Nesma where certain contracts were cancelled. These contracts included the EPC Surface Works Contract and Subcontract (CGM/NESMA) dated November 26, 2007, the Underground Mining Contract (CGM) dated June 29, 2010, the 1st Surface Works O&M Contract (CGM) dated July 3, 2011, and the 2nd Surface Works O&M Contract (CGM) dated November 3, 2014 (collectively, the Contracts). The MOU’s were binding agreements between the Company, CGM and Nesma. All of CGM’s spare parts on site related to the Contracts reverted to and became the property of the Company. CGM received payment of approximately SR 4,500,000 and forfeited their rights to the spare parts that had an economic value of approximately SR 34,477,500 . The spare parts were recorded at SR 4,500,000 and were included in property and equipment, net on the balance sheets. Under the MoU’s, CGM and Nesma did not receive any further payments from the Company as full settlement against the deterioration of property, plant and equipment which exceeded normal wear and tear and any other breach of contracts. In recognition of certain financial losses incurred by the Company, CGM and NESMA forfeited the recovery of all remaining amounts due under the Contracts. The total amounts of liabilities recorded on the Company’s books as of March 31, 2016 were approximately SR 65,345,000 which were written off to other income on the statement of operations for the year ended December 31, 2016. There were no outstanding or unresolved claims and all parties have fulfilled their obligations in connection with the Contracts. |
AMAK ZAKAT AND INCOME TAX
AMAK ZAKAT AND INCOME TAX | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Contingency [Line Items] | |
ZAKAT AND INCOME TAX | INCOME TAXES The provision for income taxes consisted of the following: Year ended December 31, 2018 2017 2016 (thousands of dollars) Current federal provision (benefit) $ (74 ) $ (1,202 ) $ 1,691 Current state provision 31 282 18 Deferred federal provision (benefit) (974 ) (6,320 ) 8,645 Deferred state provision 210 81 150 Income tax expense (benefit) $ (807 ) $ (7,159 ) $ 10,504 In connection with the AMAK share repurchase discussed in Note 10, the Company anticipates a Saudi Arabian income tax liability of approximately $802,000 . This amount is included in accrued liabilities and will be paid once the transaction is complete. We had no Saudi Arabian income tax expense or liability in 2017 or 2016 . The difference between the effective tax rate in income tax expense and the Federal statutory rate of 21% for the year ended December 31, 2018 , and 35% for the years ended December 31 2017 and 2016 , is as follows: 2018 2017 2016 (thousands of dollars) Income taxes at U.S. statutory rate $ (822 ) $ 3,885 $ 10,476 State taxes, net of federal benefit 234 235 285 Net operating loss carryback — (961 ) — Research and development credits (263 ) — — Permanent and other items 44 (11 ) (257 ) Deferred tax impact of US tax reform — (10,307 ) — Total tax expense (benefit) $ (807 ) $ (7,159 ) $ 10,504 Permanent differences are primarily due to the Federal manufacturer's deduction, research and development credit, and stock based compensation. The Company has recognized the provisional tax impacts related to the acceleration of depreciation and included these amounts in its consolidated financial statements for the year ended December 31, 2018 . After the analysis, the Company did not identify items for which the income tax effects of the TCJA have not been completed and a reasonable estimate could not be determined as of December 31, 2018 . The changes to existing U.S. tax laws as a result of the TCJA, which will have the most significant impact on the Company's federal income taxes are as follows: Reduction of the U.S. Corporate Income Tax Rate - The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the TCJA, the Company revalued its ending net deferred tax liabilities at December 31, 2017 . Acceleration of Depreciation - The Company recognized a provisional reduction to net deferred tax assets attributable to the accelerated depreciation for certain assets placed into service after September 27, 2017. The provisional estimate was finalized including consideration of TCJA on long term construction projects. Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2018 2017 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (25,169 ) $ (17,014 ) Intangible assets (1,075 ) (778 ) Other assets (40 ) (4 ) Investment in AMAK (671 ) (1,023 ) Total deferred tax liabilities $ (26,955 ) $ (18,819 ) Deferred tax assets: Accounts receivable 238 198 Inventory 133 156 Mineral interests 226 226 Foreign tax credit 802 — Net operating loss carryforward 9,073 — Post-retirement benefits 79 252 Stock-based compensation 954 971 Gross deferred tax assets 11,505 1,803 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 11,279 $ 1,577 Net deferred tax liabilities $ (15,676 ) $ (17,242 ) In connection with the proceeds received from AMAK in connection with its share repurchase program, the Company accrued a deferred tax asset (foreign tax credit) and the corresponding liability for the anticipated Saudi Arabian tax. We provided a valuation allowance in 2018 and 2017 against certain deferred tax assets because of uncertainties regarding their realization. There was no change in the valuation allowance for 2018 or 2017 . We file an income tax return in the U.S. federal jurisdiction and a margin tax return in Texas. We received notification from the Internal Revenue Service ("IRS") in November 2016 on the selection of the December 31, 2014 tax return for audit. The IRS expanded its audit to include the Research and Development ("R&D") Credits for the year ended December 31, 2015. The IRS closed its audit without change in March 2018. We also received notification that Texas will audit our R&D credit calculations for 2014 and 2015. The state of Texas has suspended the audit of the Company's R&D credit. Texas is comprehensively reviewing their audit procedures for consistency. We do not expect any changes related to the Texas audits. Our federal and Texas tax returns remain open for examination for the years 2015 through 2018. We recognized no adjustment for uncertain tax positions. As of December 31, 2018 , and 2017 , no interest or penalties related to uncertain tax positions had been accrued. |
AMAK | |
Income Tax Contingency [Line Items] | |
ZAKAT AND INCOME TAX | Zakat and Income Tax We have submitted our Zakat and income tax return for the year ended December 31, 2017 and have obtained our 2017 Zakat certificate. We are in the process of preparing and submitting our Zakat and income tax return for the year 2018. The Zakat base for the Saudi shareholders was positive in 2018, 2017 and 2016 and the corresponding Zakat expense and liability has been recorded. There was a taxable profit attributable to our non–Saudi (foreign) shareholders in 2018 and the current income tax expense and liability has also been recorded. There was no taxable profit attributable to our non-Saudi (foreign) shareholders for 2017 and 2016, therefore, no current income tax liability is due in those years. The components of Zakat and income tax benefit (expense) are as follows: Years ended December 31, 2018 2017 2016 Deferred income tax benefit 12,961,569 8,617,706 6,694,909 Change in valuation allowance (5,736,640 ) (9,035,670 ) (8,413,167 ) Current Zakat and income tax expense (5,400,000 ) (3,209,229 ) (1,877,986 ) Zakat and income tax benefit (expense) 1,824,929 (3,627,193 ) (3,596,244 ) The difference between the effective income tax rate and the statutory rate for non-Saudi shareholders of 20% for the years ended December 31, 2018, 2017, and 2016, relates to changes in the valuation allowance and adjustments to estimates in depreciation. Tax effects of temporary differences that give rise to significant portions of non-Saudi owners deferred tax assets and deferred tax liabilities were as follows: December 31, 2018 2017 Deferred tax assets: Loss carryforward 42,194 42,884 Other 657 469 42,851 43,352 Deferred tax liabilities: Property and Equipment (7,806 ) (21,236 ) Net deferred tax asset 35,045 22,116 Valuation allowance (38,837 ) (33,134 ) Net deferred tax liability (3,793 ) (11,018 ) At December 31, 2018 and 2017, we had tax loss carryforwards totaling approximately SR 210,970,000 and SR 214,418,000 . Tax losses may be carried forward indefinitely subject to certain annual limitations for non-Saudi shareholders. We have provided a valuation allowance in 2018 and 2017 against a portion of our gross deferred tax assets because of uncertainties regarding their realization. |
AMAK LONG-TERM DEBT
AMAK LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Debt Instrument [Line Items] | |
LONG-TERM DEBT | Long-term Debt During 2010, the Company entered into a loan agreement with the Saudi Industrial Development Fund (SIDF) for SR 330,000,000 to finish the development of the mine and provide working capital. The loan originally matured in 2019, however, the agreement was amended during 2015 to adjust the maturity date to 2022 as well as the repayment schedule. We did not make certain scheduled loan repayments due in 2017 and 2018 and engaged with SIDF to renegotiate the terms of the debt. In July 2018, we amended our agreement with SIDF to adjust the repayment schedule and extend the maturity date to 2024. Under the terms of the agreement with SIDF, we are required to maintain certain financial covenants, among other requirements. The loan agreement is collateralized by all the assets of Company and is guaranteed by the shareholders. Long-term debts are summarized as follows at: December 31, 2018 2017 SIDF loan agreement 305,000,000 305,000,000 Deferred finance charges (8,741,288 ) (10,917,190 ) Total debt 296,258,712 294,082,810 Less current portion 30,000,000 65,000,000 Total long-term debt, less current portion 266,258,712 229,082,810 Deferred finance costs are comprised of SIDF loan origination charges which are capitalized and amortized over the period of the related loan which approximates the interest method. Loan fees of SR 8,741,288 and SR 10,917,190 net of accumulated amortization are included net with long-term debt at December 31, 2018 and 2017. Amortization of loan fees amounted to approximately SR 1,639,000 , SR 1,611,000 , and SR 2,148,000 for the years ended December 31, 2018, 2017, and 2016, respectively. The repayment schedule is as follows: Years Ending December 31, 2019 30,000,000 2020 50,000,000 2021 60,000,000 2022 60,000,000 2023 70,000,000 Thereafter 35,000,000 305,000,000 |
AMAK END-OF-SERVICE INDEMNITIES
AMAK END-OF-SERVICE INDEMNITIES | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
END-OF-SERVICE INDEMNITIES | End-of-Service Indemnities The change in the end-of-service indemnities provision is as follows: Years Ended December 31, 2018 2017 Balance, beginning of year 2,518,529 1,480,636 Provision for the year 1,347,418 1,375,024 Paid during the year (216,058 ) (337,131 ) Balance, end of year 3,649,889 2,518,529 |
AMAK ASSET RETIREMENT OBLIGATIO
AMAK ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ASSET RETIREMENT OBLIGATIONS | Asset Retirement Obligations During 2012, we recorded an ARO for deferred mine closure costs of approximately SR 12,843,000 . These deferred mine closure costs are being amortized over the estimated life of the mine. Amortization expense was approximately SR 745,000 , SR 1,117,000 , and SR 1,117,000 for the years ended December 31, 2018, 2017, and 2016. Deferred mine closure costs consisted of the following at: December 31, 2018 2017 Cost 12,842,625 12,842,625 Accumulated amortization (6,886,626 ) (6,142,126 ) 5,955,999 6,700,499 A summary of changes in our provision for mine closure costs is as follows: Years Ended December 31, 2018 2017 2016 Balance, beginning of year 15,519,938 14,995,109 14,488,028 Accretion expense 543,198 524,829 507,081 Balance, end of year 16,063,136 15,519,938 14,995,109 ARO costs may increase or decrease significantly in the future as a result of changes in regulations, changes in engineering designs and technology, permit modifications or updates, changes in mine plans, inflation or other factors and as actual reclamation spending occurs. |
AMAK GENERAL AND ADMINISTRATIVE
AMAK GENERAL AND ADMINISTRATIVE EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
GENERAL AND ADMINISTRATIVE EXPENSES | General and Administrative Expenses A summary of general and administrative expenses is as follows: Years Ended December 31, 2018 2017 2016 Wages, salaries and related costs 17,036,965 14,837,901 10,195,511 Mine closure and environmental 1,287,698 1,641,580 1,623,831 Office expenses 9,287,218 6,589,090 5,491,679 Travel and accommodation 593,046 2,958,938 1,477,413 Professional fees 1,271,071 2,272,224 8,169,121 29,475,998 28,299,733 26,957,555 |
AMAK COMMITMENTS AND CONTINGENC
AMAK COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Guarantees On October 24, 2010, we executed a limited guarantee in favor of the Saudi Industrial Development Fund ("SIDF") whereby we agreed to guaranty up to 41% of the SIDF loan to AMAK in the principal amount of 330.0 million Saudi Riyals (US $88.0 million ) (the "Loan"). The term of the loan is currently through June 2022. As a condition of the Loan, SIDF required all shareholders of AMAK to execute personal or corporate guarantees; as a result, the Company's guarantee is for approximately 135.3 million Saudi Riyals (US $36.1 million ). The loan was necessary to continue construction of the AMAK facilities and provide working capital needs. Our current assessment is that the probability of contingent performance is remote based on our analysis of the contingent portion of the guarantee which included but was not limited to the following: (1) the SIDF has historically not called guarantees, (2) the value of the assets exceeds the amount of the loan (3) the other shareholders have indicated that they would prioritize their personal guarantees ahead of the corporate guarantee, and (4) according to Saudi Arabian legal counsel, assets outside of Saudi Arabia are protected from the Saudi Court System. We received no consideration in connection with extending the guarantee and did so to maintain and enhance the value of our investment. Our non-contingent and immediate obligation to stand ready to make payments if the events of default under the guarantee occur was not material to the financial statements. The total amount outstanding to the SIDF at December 31, 2018 , and 2017 was 305.0 million and 305.0 million Saudi Riyals (US $81.3 million and $81.3 million ), respectively. Operating Lease Commitments We have operating leases for the rental of approximately 346 railcars for shipping purposes with expiration dates through 2026 . Invoices are received and paid on a monthly basis. The total amount of the commitment is approximately $17.3 million over the next 9 years. We also have an operating lease for our office space in Sugar Land, Texas. The expiration date for this lease is September 2023 . The total amount of the commitment is approximately $587,000 . In addition, we are required to make periodic payments for property taxes, utilities and common area operating expenses. In addition, we have operating leases for other equipment such as forklifts and copiers with varying expiration dates through 2023 . These commitments are approximately $207,000 . Future minimum property and equipment lease payments under the non-cancelable operating leases at December 31, 2018 , are as follows: Year Ending December 31, (thousands of dollars) 2019 $ 3,670 2020 3,583 2021 3,418 2022 3,107 2023 2,288 Thereafter 2,065 Total $ 18,131 Rental expense for these operating leases for the years ended December 31, 2018 , 2017 , and 2016 was $4.4 million , $4.4 million and $4.2 million , respectively. Litigation From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in any legal proceedings that we believe could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future. On March 21, 2011, Mr. El Khalidi filed suit against the Company in Texas alleging breach of contract and other claims. The 88th Judicial District Court of Hardin County, Texas dismissed all claims and counterclaims for want of prosecution in this matter on July 24, 2013. The Ninth Court of Appeals subsequently affirmed the dismissal for want of prosecution and the Supreme Court of Texas denied Mr. El Khalidi's petition for review. On May 1, 2014, Mr. El Khalidi refiled his lawsuit against the Company for breach of contract and defamation in the 356th Judicial District Court of Hardin County, Texas. The case was transferred to the 88th Judicial District Court of Hardin County, Texas. The Trial Court dismissed all of Mr. El Khalidi's claims and causes of action with prejudice and the Ninth Court of Appeals affirmed. Mr. El Khalidi filed a petition for review with the Supreme Court of Texas, which was denied April 6, 2018. Mr. El Khalidi filed a motion for rehearing of his petition for review with the Supreme Court of Texas on April 23, 2018. On May 25, 2018, the Supreme Court of Texas denied the motion for rehearing and the matter is considered closed. Supplier Agreements From time to time, we may incur shortfall fees due to feedstock purchases being below the minimum amounts as prescribed by our agreements with our suppliers. The shortfall fee expenses were not significant for the years ended December 31, 2018 , 2017 , and 2016 . Environmental Remediation Amounts charged to expense for various activities related to environmental monitoring, compliance, and improvements were approximately $745,000 in 2018 , $593,000 in 2017 and $622,000 in 2016 . |
AMAK | |
Loss Contingencies [Line Items] | |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies Operating lease obligations Our lease commitment for our surface mining lease was initially granted for a period of 30 years through 2024. The lease allows for renewal for an additional 20 years. We also have leases for our corporate offices and three residential villas in Najran through 2025. There is also a mining lease that covers the Guyan area for a period of 20 years. A summary of these commitments are as follows: Years Ending December 31, 2019 990,000 2020 990,000 2021 990,000 2022 990,000 2023 550,000 Thereafter 1,650,000 6,160,000 Capital lease obligations We lease certain equipment vehicles under capital lease obligations that are set to expire at various dates through 2021. The future minimum lease payments under the capital lease obligations are as follows for the years ending December 31,: 2019 250,526 2020 250,526 2021 147,558 Total minimum lease payments 648,610 Less deferred financial charges (95,593 ) Total capital lease obligations 553,017 Less: current portion of capital lease obligations 193,206 Total long term portion, net current portion 359,811 |
AMAK FAIR VALUE MEASUREMENT
AMAK FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Fair Value Measurement | Fair Value Measurement Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means; and Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). We did not have any significant transfers in or out of Levels 1, 2, or 3 in 2018 or 2017 . The embedded derivatives in our provisional sales contracts are considered Level 2 measurements. |
AMAK EMBEDDED DERIVATIVES
AMAK EMBEDDED DERIVATIVES | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Embedded Derivatives | Embedded Derivatives As described in Note 2 under Revenue Recognition, our concentrate sales contracts provide for provisional pricing based on the LME price at the time of shipment as specified in the contract. Sales contracts with a provisional sales price contain an embedded derivative (i.e., the price settlement mechanism that is settled after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale of the metals contained in the concentrates at the then-current LME price as defined in the contract. Mark-to-market price fluctuations recorded through the settlement date are reflected in revenues for sales contracts. Our embedded derivatives at December 31, 2018 and 2017, were not significant to the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
Principles of Consolidation | Principles of Consolidation – The consolidated financial statements include the balance sheets, statements of income, stockholders' equity, and cash flows of the Company, TOCCO, TC, SHR, GSPL and PEVM. Other entities which are not controlled but over which the Company has the ability to exercise significant influence such as AMAK, are accounted for using the equity method of accounting. All intercompany profits, transactions and balances have been eliminated. |
Cash, Cash Equivalents and Short-Term Investments | Cash, Cash Equivalents and Short-Term Investments – Our principal banking and short-term investing activities are with local and national financial institutions. Short-term investments with an original maturity of three months or less are classified as cash equivalents. |
Inventories | Inventories – Finished products and feedstock are recorded at the lower of cost, determined on the first-in, first-out method (FIFO), or market for SHR. For TC, inventory is recorded at the lower of cost or market as follows: (1) raw material cost is calculated using the weighted-average cost method and (2) product inventory cost is calculated using the specific cost method. |
Trade Receivables and Allowance for Doubtful Accounts | Trade Receivables and Allowance for Doubtful Accounts – We evaluate the collectability of our trade receivables and adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which we become aware. For the year ended December 31, 2018, we increased the balance by $152,000 due to concerns regarding collectability for a specific customer. For the year ended December 31, 2017, the allowance balance was not increased. In 2016, we increased the balance by $90,000 due to an increase in sales in countries where there is a greater risk of default and limited recourse should this occur. We track customer balances and past due amounts to determine if customers may be having financial difficulties. This, along with historical experience and a working knowledge of each customer, helps determine accounts that should be written off. No amounts were written off in 2018 or 2017. |
Notes and Accounts Receivable | Notes Receivable – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a non-interest note receivable is recorded with an imputed interest rate. There were no notes receivable outstanding as of December 31, 2018. The interest rate used on outstanding notes during December 31, 2018 and 2017 was 4% . The unearned interest was reflected as a discount against the note balance. The Company evaluates the collectability of notes based upon a working knowledge of the customer. The notes are receivable from custom processing customers with whom we maintain a close relationship. Thus, all amounts due under the notes receivable are considered collectible, and no allowance was recorded at December 31, 2018 and 2017 , respectively. |
Plant, Pipeline and Equipment | Plant, Pipeline and Equipment – Plant, pipeline and equipment are stated at cost. Depreciation is provided over the estimated service lives using the straight-line method. Gains and losses from disposition are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. Major renewals and improvements are capitalized. Interest costs incurred to finance expenditures during construction phase are capitalized as part of the historical cost of constructing the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized interest costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Labor costs incurred to self-construct assets are capitalized as part of the historical cost the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized labor costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Platinum catalyst is included in plant, pipeline and equipment at cost. Amortization of the catalyst is based upon cost less estimated salvage value of the catalyst using the straight line method over the estimated useful life (see Note 8). |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets – Goodwill represents the future economic benefits arising from other assets acquired in the acquisition of TC that are not individually identified and separately recognized. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. Estimates of fair value are based on appraisals, market prices for comparable assets, or internal estimates of future net cash flows. Definite-lived intangible assets consist of customer relationships, licenses, permits and developed technology that were acquired as part of the Acquisition of TC. The majority of these assets are being amortized using discounted estimated future cash flows over the term of the related agreements. Intangible assets associated with customer relationships are being amortized using the discounted estimated future cash flows method based upon assumed rates of annual customer attrition. We continually evaluate the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they will be removed from the consolidated balance sheets. |
Business Combinations and Related Business Acquisition Costs | Business Combinations and Related Business Acquisition Costs – Assets and liabilities associated with business acquisitions are recorded at fair value using the acquisition method of accounting. We allocate the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. We may use third-party valuation specialists to assist us in this allocation. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition. The fair value of property, plant and equipment and intangible assets are based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Business acquisition costs are expensed as incurred and are reported as general and administrative expenses in the consolidated statements of income. We define these costs to include finder's fees, advisory, legal, accounting, valuation, and other professional consulting fees, as well as, travel associated with the evaluation and effort to acquire specific businesses. |
Investment in AMAK | Investment in AMAK – We account for our investment in AMAK using the equity method of accounting under which we record in income our share of AMAK's income or loss for each period. The amount recorded is also adjusted to reflect the amortization of certain differences between the basis in our investment in AMAK and our share of the net assets of AMAK as reflected in AMAK's financial statements (see Note 10). Any proceeds received from or payments made to AMAK are recorded as decreases or increases in the balance of our investment. We assess our investment in AMAK for impairment when events are identified, or there are changes in circumstances that may have an adverse effect on the fair value of the investment. We consider recoverable ore reserves, changes in commodity prices, and the amount and timing of the cash flows to be generated by the production of those reserves, as well as, recent equity transactions within AMAK. |
Other Assets | Other Assets – Other assets include a license used in specialty petrochemical operations, spare parts inventory and certain specialty petrochemical assets. Beginning January 1, 2017, due to the expansion of our plant assets at SHR and TC, we began inventorying spare parts for the repair and maintenance of our plant, pipeline and equipment. Spare parts are accounted for on the first-in, first-out method (FIFO). |
Long-Lived Assets Impairment | Long-Lived Assets Impairment – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on the undiscounted net cash flows to be generated from the asset's use. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis although other factors including the state of the economy are considered. |
Revenue Recognition and Shipping and Handling Costs | Revenue Recognition – The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606 ("ASC 606"), Revenue from Contracts with Customers, and its amendments with a date of the initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. ASC 606 outlines a single comprehensive model for an entity to use in accounting for revenue arising from all contracts with customers, except where revenues are in scope of another accounting standard. ASC 606 superseded the revenue recognition requirements in ASC Topic 605, " Revenue Recognition", and most industry specific guidance. ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services. ASC 606 also requires certain additional revenue-related disclosures. The Company applied the modified retrospective approach under ASC 606 which allows for the cumulative effect of adopting the new guidance on the date of initial application. Use of the modified retrospective approach means the Company's comparative periods prior to initial application are not restated. The initial application was applied to all contracts at the date of the initial application. The Company has determined that the adjustments using the modified retrospective approach did not have a material impact on the date of the initial application along with the disclosure of the effect on prior periods. Accounting Policy Beginning on January 1, 2018, revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. In evaluating when a customer has control of the asset we primarily consider whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer has accepted delivery and a right to payment exists. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales and processing. The Company does not offer material rights of return or service-type warranties. For the year ended December 31, 2017 the Company recognized revenue according to FASB ASC Topic 605 ("ASC 605"), " Revenue Recognition" , when: (1) the customer accepted delivery of the product and title had been transferred or when the service was performed and the Company had no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction had occurred; (3) price was fixed and determinable; and (4) collection was assured. Product sales generally met these criteria, and revenue was recognized, when the product was delivered or title was transferred to the customer. Sales revenue was presented net of discounts, allowances, and sales taxes. Freight costs billed to customers were recorded as a component of revenue. Revenues received in advance of future sales of products or prior to the performance of services were presented as deferred revenues. Shipping and handling costs were classified as cost of product sales and processing and were expensed as incurred. Nature of goods and services The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, disaggregation of revenues, and contract balance disclosures, see Note 17. Specialty petrochemical segment The specialty petrochemical segment of the Company produces eight high purity hydrocarbons and other petroleum based products including isopentane, normal pentane, isohexane and hexane. These products are used in the production of polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, crude oil from the Canadian tar sands, and in the catalyst support industry. SHR's specialty petrochemical products are typically transported to customers by rail car, tank truck, iso-container and ship. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected 30 to 60 days subsequent to point of sale. Processing Fees – The Company's services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements the customer retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Specialty Wax segment The specialty wax segment of the Company manufactures and sells specialty polyethylene and poly alpha olefin waxes and also provides custom processing services for customers. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Processing Fees – The Company's promised services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements and Purchase Order Arrangements, the customer typically retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction and Purchase Order Arrangement is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Shipping and Handling Costs – Shipping and handling costs are classified as cost of product sales and processing and are expensed as incurred. |
Retirement Plan | Retirement Plan – We offer employees the benefit of participating in a 401(k) plan. We match 100% up to 6% of pay with vesting occurring over 2 years. |
Environmental Liabilities | Environmental Liabilities – Remediation costs are accrued based on estimates of known environmental remediation exposure. Ongoing environmental compliance costs, including maintenance and monitoring costs, are expensed as incurred. |
Other Liabilities | Other Liabilities – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a note receivable and a deferred liability are recorded to recover the project costs which are then capitalized. At times instead of a note receivable being established, the customer pays an upfront cost. The amortization of other liabilities is recorded as a reduction to depreciation expense over the life of the contract with the customer. As of December 31 of each year, depreciation expense was offset and reduced by approximately $0.8 million , $0.8 million , and $1.0 million , for 2018 , 2017 , and 2016 , respectively. |
Net Income Per Share | Net Income Per Share – We compute basic income per common share based on the weighted-average number of common shares outstanding. Diluted income per common share is computed based on the weighted-average number of common shares outstanding plus the number of additional common shares that would have been outstanding if potential dilutive common shares, consisting of stock options, unvested restricted stock units, and shares which could be issued upon conversion of debt, had been issued (see Note 18). |
Foreign Currency | Foreign Currency – The functional currency for the Company and each of the Company's subsidiaries is the US dollar (USD). Transaction gains or losses as a result of transactions denominated and settled in currencies other than the USD are reflected in the statements of income as foreign exchange transaction gains or losses. We do not employ any practices to minimize foreign currency risks. The functional and reporting currency of AMAK is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the USD at a fixed exchange rate of 1 USD to 3.75 SR; therefore, we translate SR into our reporting currency of the USD for income statement and balance sheet purposes using the fixed exchange rate. As of December 31, 2018 , 2017 and 2016 , foreign currency translation adjustments were not significant. |
Management Estimates | Management Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include allowance for doubtful accounts receivable and inventory obsolescence; assessment of impairment of our long-lived assets, goodwill, intangible assets and investments, litigation liabilities, post-retirement benefit obligations, guarantee obligations, environmental liabilities, income taxes and deferred tax valuation allowances. Actual results could differ from these estimates. |
Share-Based Compensation | Share-Based Compensation – We recognize share-based compensation of stock options granted based upon the fair value of options on the grant date using the Black-Scholes pricing model (see Note 15). Share-based compensation expense recognized during the period is based on the fair value of the portion of share-based payments awards that is ultimately expected to vest. Share-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2018 , 2017 , and 2016 includes compensation expense based on the estimated grant date fair value for awards that are ultimately expected to vest, and accordingly has been reduced for estimated forfeitures. Estimated forfeitures at the time of grant are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Guarantees | Guarantees – We may enter into agreements which contain features that meet the definition of a guarantee under FASB ASC 460 "Guarantees" (see Note 14). These arrangements create two types of obligations: a) We have a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and b) We have an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probable that one or more future events will occur, triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated. |
Fair Value | Fair Value – The carrying value of cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of variable rate long term debt and notes payable reflect recent market transactions and approximate carrying value. We used other observable inputs that would qualify as Level 2 inputs to make our assessment of the approximate fair value of our cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, other liabilities, notes payable and variable rate long term debt. The fair value of the derivative instruments are described below. We measure fair value by ASC Topic 820 Fair Value. ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard amends numerous accounting pronouncements but does not require any new fair value measurements of reported balances. ASC Topic 820 emphasizes that fair value, among other things, is based on exit price versus entry price, should include assumptions about risk such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. When considering the assumptions that market participants would use in pricing the asset or liability, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy prioritizes inputs used to measure fair value into three broad levels. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Derivatives | Derivatives – We record derivative instruments as either an asset or liability measured at fair value. Changes in the derivative instrument's fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument's gains and losses to offset related results on the hedged item in the income statement, to the extent effective, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. |
Income Taxes | Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized. Our estimate of the potential outcome of any uncertain tax issues is subject to management's assessment of relevant risks, facts, and circumstances existing at that time. We use a more likely than not threshold for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. To the extent that our assessment of such tax position changes, the change in estimate is recorded in the period in which the determination is made. We report tax-related interest and penalties as a component of income tax expense. On December 22, 2017, Public Law No. 115-97 known as the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA included a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. federal corporate income tax rate from a maximum of 35 percent to a flat 21 percent for tax years effective January 1, 2018. The TCJA also implemented a territorial tax system, provided for a one-time deemed repatriation tax on unrepatriated foreign earnings, eliminated the alternative minimum tax (AMT), made AMT credit carryforwards refundable, and permitted the acceleration of depreciation for certain assets placed into service after September 27, 2017. In addition the TJCA created prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. The Company has elected to recognize the income tax effects of the TCJA in its financial statements in accordance with Staff Accounting Bulletin 118 (SAB 118), which provides guidance for the application of ASC Topic 740 Income Taxes , in the reporting period in which the TCJA was signed into law. Under SAB 118 when a Company does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA it will recognize provisional amounts if a reasonable estimate can be made. If a reasonable estimate cannot be made then no impact is recognized for the effect of the TCJA. SAB 118 permits an up to one year measurement period to finalize the measurement of the impact of the TCJA. |
Reclassifications | Reclassifications – Certain reclassifications have been made to prior year balances to conform with the current year presentation. |
Subsequent Events | Subsequent Events – The Company has evaluated subsequent events through March 15, 2019 , the date that the consolidated financial statements were approved by management. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-9, Revenue from Contracts with Customers ("ASU 2014-9"). ASU 2014-9 supersedes the revenue recognition requirements of FASB Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and most industry-specific guidance throughout the Accounting Standards Codification, resulting in the creation of FASB ASC Topic 606, Revenue from Contracts with Customers . ASU 2014-9 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU provides alternative methods of retrospective adoption and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company completed its assessment of the impact of the adoption of ASU 2014-9 across all revenue streams. This included reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. We completed contract reviews and validated results of applying the new revenue guidance (Note 2). See Revenue Recognition policy note. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to ASC 842, Leases. ASU 2018-11 provided entities with an alternative modified transition method to elect not to recast the comparative periods presented when adopting ASC 842. The new standard provides a number of optional practical expedients in transition. The Company expects to elect: (1) the ‘package of practical expedients’, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs and (2) the use-of-hindsight. In addition, the new standard provides practical expedients for an entity’s ongoing accounting that the Company anticipates making, such as the (1) the election for certain classes of underlying asset to not separate non-lease components from lease components and (2) the election for short-term lease recognition exemption for all leases that qualify. The Company will adopt ASU 842 as of January 1, 2019, using the alternative modified transition method. In preparation of adopting ASC 842, the Company is implementing additional internal controls to enable future preparation of financial information in accordance with ASC 842. The Company has also substantially completed its evaluation of the impact on the Company’s lease portfolio. The Company believes the largest impact will be on the consolidated balance sheets for the accounting of rail cars, equipment and office leases, which represents a majority of its operating leases it has entered into as a lessee. These leases will be recognized under the new standard as right of use assets (“ROU”) operating lease liabilities. The Company will also be required to provide expanded disclosures for its leasing arrangements. As of December 31, 2018, the Company had approximately $ 18.1 million of undiscounted future minimum operating lease commitments that are not recognized on its consolidated balance sheets as determined under the current standard. For a lessee, the results of operations are not expected to significantly change after adoption of the new standard. While substantially complete, the Company is still in the process of finalizing its evaluation of the effect of ASU 842 on the Company’s financial statements and disclosures, including the determination of the Company’s incremental borrowing rate for each of the operating leases to estimate the interest rate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. The Company will finalize its accounting assessment and quantitative impact of the adoption during the first quarter of fiscal year 2019. In January 2017 the FASB issued ASU No. 2017-4, Intangibles – Goodwill and Other (Topic 350) . The amendments in ASU 2017-4 simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company has goodwill from prior business combination and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the year ended December 31, 2018 , the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company's goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company's financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. In February 2018 the FASB issued ASU No. 2018-2, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . ASU 2018-2 was issued to address the income tax accounting treatment of the stranded tax effects within other comprehensive income due to the prohibition of backward tracing due to an income tax rate change that was initially recorded in other comprehensive income due to the enactment of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017, which changed the Company's income tax rate from 35% to 21% . The amendments to the ASU changed US GAAP whereby an entity may elect to reclassify the stranded tax effect from accumulated other comprehensive income to retained earnings. The amendments of the ASU may be adopted in total or in part using a full retrospective or modified retrospective method. The amendments of the ASU are effective for periods beginning after December 15, 2018. The Company believes there will be no material impact to the consolidated financial statements as a result of this update. In June 2018, the FASB issued ASU No. 2018–07, Improvements to Nonemployee Share–Based Payment Accounting . ASU 2018–07 simplifies the accounting for share–based payments to nonemployees by aligning it with the accounting for share–based payments to employees, with certain exceptions. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is assessing the effect of ASU 2018–02 on its consolidated financial statements. |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Cash, Cash Equivalents and Short-Term Investments | Cash and cash equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Inventories | Inventories The components of inventories include mill stockpiles, precious metal doré, chemicals, and mining supplies. Inventories are stated at the lower of weighted-average cost or market. Costs of mill stockpiles inventory include labor and benefits, supplies, energy, depreciation, depletion, amortization, and other necessary costs incurred with the extraction and processing of ore. Corporate general and administrative costs are not included in inventory costs. Because it is generally impracticable to determine the minerals contained in mill stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to the mill stockpiles is based on surveyed volumes of mined material and daily production records. Expected mineral recovery rates from the mill stockpiles are determined by various metallurgical testing methods. |
Notes and Accounts Receivable | Accounts receivable We evaluate the collectability of our accounts receivable and the adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which the Company becomes aware. |
Plant, Pipeline and Equipment | Property and equipment Property and equipment is carried at cost less accumulated depreciation. Expenditures for replacements and improvements are capitalized. Costs related to periodic maintenance are expensed as incurred. Depletion of the mining assets is determined using the unit-of-production method based on total estimated proven and probable reserves. Depletion and amortization using the unit-of-production method is recorded upon extraction of the ore, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over their estimated useful lives ranging from 3 to 20 years. Borrowing costs that are directly attributable to the acquisition, construction or production of assets are capitalized as part of the cost of those assets. Assets under construction are capitalized in the construction in progress account. Upon completion, the cost of the related asset is transferred to the appropriate category of property and equipment. |
Long-Lived Assets Impairment | Asset impairment We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Long-lived assets are evaluated for impairment under the two-step model. When events or circumstance suggest impairment of long-lived assets, estimated undiscounted future net cash flows are calculated using future estimated commodity prices, proven and probable reserves, and estimated net proceeds from the disposition of assets on retirement, less operating, sustaining capital, and reclamation costs. If it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. Fair value is generally determined using valuation techniques such as estimated future cash flows. Because the cash flows used to assess recoverability of our long-lived assets and measure fair value of our mining operations require us to make several estimates and assumptions that are subject to risk and uncertainty, changes in these estimates and assumptions could result in the impairment of our long-lived asset values. |
Revenue Recognition and Shipping and Handling Costs | Revenue recognition We sell our products pursuant to sales contracts entered into with a customer who acts as an intermediary and resells our products to end users. Revenue is recognized when title and risk of loss pass to the customer and when collectability is reasonably assured. The passing of title and risk of loss to the customer is based on terms of the sales contract, generally upon shipment or delivery of product. Sales are recorded based on a provisional sales price or a final sales price calculated in accordance with the terms specified in the relevant sales contract. Under the long-established structure of sales agreements prevalent in the industry, the copper and zinc contained in concentrate is generally provisionally priced at the time of shipment. The provisional price received at the time of shipment is later adjusted to a final price based on quoted monthly average spot prices on the London Metal Exchange (LME) for a specified future month. We record revenues at the time of shipment (when title and risk of loss pass) based on then-current LME prices, and we account for any changes between the sales price recorded at the time of shipment and subsequent changes in the LME prices through the date of final pricing as gains or losses from a derivative embedded in the sales contract (a futures contract initiated at the date of shipment and settled upon the determination of the final price) which is bifurcated and separately accounted for at fair value. See Note 16. Revenues from concentrate sales are recorded net of treatment and refining charges. These allowances are a negotiated term of each contract. Treatment and refining charges represent payments or price adjustments to smelters and refiners and are either fixed, or in certain cases, vary with the price of metals (referred to as price participation). |
Environmental Liabilities | Environmental costs Environmental costs are expensed or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can reasonably be estimated. Ongoing compliance costs are expensed as incurred. |
Foreign Currency | Foreign currency Our functional currency is the Saudi Riyal (SR). In June 1986, the Saudi Riyal was officially pegged to the U.S. Dollar at a fixed exchange rate of 1 U.S. Dollar to 3.75 riyals. Foreign currency transactions are translated into Saudi Riyals at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rates prevailing at that date. Any gains and losses from settlement and translation of foreign currency transactions are included in the statement of operations. |
Management Estimates | Management estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation and amortization; zakat and income taxes; environmental obligations; reclamation and closure costs; estimates of recoverable materials in mill stockpiles; fair value of embedded derivatives; end-of-service indemnities; and asset impairment, including estimates used to derive future cash flows associated with those assets. Actual results could differ from these estimates. |
Income Taxes | Zakat and income tax We are subject to the Regulations of the General Authority of Zakat and Tax (GAZT) in the Kingdom of Saudi Arabia. Under these regulations, Zakat is payable at 2.5% on the basis of the portion of our Zakat base attributable to our Saudi stockholders, and income tax is payable at 20% on the portion of our taxable income attributable to our non-Saudi stockholders. Zakat and income tax are provided on an accrual basis. Any difference in the estimate is recorded when the final assessment is approved, at which time the provision is cleared. We account for deferred income taxes on non-Saudi owners utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the income tax basis of assets and liabilities, as measured by the effective tax rate. When appropriate, we evaluate the need for a valuation allowance based on a more likely than not threshold to reduce deferred tax assets to estimated recoverable amounts. We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We report tax-related interest and penalties as a component of Zakat and income tax expense. We recognized no material adjustment for unrecognized income tax liabilities. Zakat and income tax returns for the years from 2010 to 2017 are currently under review with GAZT. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior periods to conform with current year presentation. |
Subsequent Events | Subsequent events We have evaluated events and transactions subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through March 6, 2019, the date on which the financial statements were available to be issued. |
New Accounting Pronouncements | Recent accounting pronouncements In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the revenue recognition requirements of FASB Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and most industry-specific guidance throughout the Accounting Standards Codification, resulting in the creation of FASB ASC Topic 606, Revenue from Contracts with Customers. ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. For nonpublic companies this ASU provides alternative methods of retrospective adoption and is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of these amendments, although it does not expect the amendments to have a significant impact to the Company’s financial position or results of operation. In February 2016 the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and does not expect to early adopt. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above. |
Basis of Accounting | The accompanying financial statements have been prepared using U.S. generally accepted accounting principles. |
Development costs | Development costs Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources are charged to expense as incurred. Development costs are capitalized beginning after proven and probable reserves have been established. Development costs include costs incurred in mine pre-production activities undertaken to gain access to proven and probable reserves, including shafts, drifts, ramps, permanent excavations, infrastructure and removal of overburden. These costs are deferred net of the proceeds from the sale of any production during the development period and then amortized using an estimated unit-of-production method. If a mine is no longer considered economical, the accumulated costs are charged to the statement of operations in the year in which the determination is made. |
End-of-service indemnities | End-of-service indemnities Employee end-of-service benefits are accrued for the benefit of employees under the terms and conditions of Saudi Labor Law and Regulations and their employment contracts. End-of-service indemnities are provided for and accrued in the financial statements based on the respective employees' salaries and length of service. |
Pre-export Advances | Pre-export Advances At times we receive advances on a pre-export basis against a portion of our inventory on hand prior to shipment. These advances bear interest at 2.5% and are repaid from the proceeds from final concentrate sales. |
Leasing arrangements | Leasing arrangements We periodically lease operating equipment, facilities, and office buildings. Rentals payable under operating leases are charged to the statements of operations on a straight-line basis over the term of the relevant lease. For any capital leases, the present value of future minimum lease payments at the inception of the lease is reflected as an asset and a liability in the balance sheet. Amounts due within one year are classified as short-term liabilities and the remaining balance as long-term liabilities. Finance charges are charged to the statement of operations. |
Asset retirement obligations and costs | Asset retirement obligations and costs We record the fair value of our estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period in which the obligation is incurred. AROs associated with long-lived assets are those for which there is a legal obligation to settle under various laws, statues, or regulations. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of revenues. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated (primarily on a unit-of-production basis) over the asset’s respective useful life. Our AROs consist primarily of costs associated with mine reclamation and closure activities and are included in deferred mine closure costs on the accompanying balance sheets. At least annually, we review our ARO estimates for changes in the projected timing and changes in cost estimates and additional AROs incurred during the period. |
Fair Value Measurement | Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means; and Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). We did not have any significant transfers in or out of Levels 1, 2, or 3 in 2018 or 2017 . The embedded derivatives in our provisional sales contracts are considered Level 2 measurements. |
ACQUISITION OF B PLANT (Tables)
ACQUISITION OF B PLANT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Bargain of Purchase Gain | We recorded an $11.5 million bargain purchase gain on the transaction as calculated in the table below (in thousands). Cash paid $ 2,011 Estimated earnout liability 733 Purchase Price $ 2,744 Fixed assets at FMV Land 980 Site improvements 30 Buildings 1,350 Production equipment 11,933 14,293 Bargain purchase gain $ 11,549 |
TRADE RECEIVABLES (Tables)
TRADE RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Trade Receivables, net | Trade receivables, net, at December 31, consisted of the following: 2018 2017 (thousands of dollars) Trade receivables $ 27,564 $ 26,079 Less allowance for doubtful accounts (452 ) (300 ) Trade receivables, net $ 27,112 $ 25,779 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets at December 31 are summarized as follows: 2018 2017 (thousands of dollars) Prepaid license $ 2,419 $ 1,919 Spare parts 1,597 954 Other prepaid expenses and assets 648 772 Total $ 4,664 $ 3,645 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories include the following at December 31: 2018 2017 (thousands of dollars) Raw material $ 4,742 $ 3,703 Work in process 173 27 Finished products 11,624 14,720 Total inventory $ 16,539 $ 18,450 |
PLANT, PIPELINE AND EQUIPMENT (
PLANT, PIPELINE AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Plant, Pipeline and Equipment | Plant, pipeline and equipment include the following at December 31: 2018 2017 (thousands of dollars) Platinum catalyst $ 1,612 $ 1,612 Catalyst 3,131 779 Land 5,428 5,428 Plant, pipeline and equipment 253,905 186,946 Construction in progress 4,343 50,996 Total plant, pipeline and equipment 268,419 245,761 Less accumulated depreciation (73,762 ) (63,240 ) Net plant, pipeline and equipment $ 194,657 $ 182,521 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Finite-Lived Intangible Assets by Major Class | The following table summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands): December 31, 2018 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (4,775 ) $ 12,077 Non-compete agreements 94 (80 ) 14 Licenses and permits 1,471 (495 ) 976 Developed technology 6,131 (2,606 ) 3,525 24,548 (7,956 ) 16,592 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (7,956 ) $ 18,947 December 31, 2017 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (3,651 ) $ 13,201 Non-compete agreements 94 (61 ) 33 Licenses and permits 1,471 (390 ) 1,081 Developed technology 6,131 (1,993 ) 4,138 24,548 (6,095 ) 18,453 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (6,095 ) $ 20,808 |
Summary of Indefinite-Lived Intangible Assets by Major Class | The following table summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands): December 31, 2018 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (4,775 ) $ 12,077 Non-compete agreements 94 (80 ) 14 Licenses and permits 1,471 (495 ) 976 Developed technology 6,131 (2,606 ) 3,525 24,548 (7,956 ) 16,592 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (7,956 ) $ 18,947 December 31, 2017 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (3,651 ) $ 13,201 Non-compete agreements 94 (61 ) 33 Licenses and permits 1,471 (390 ) 1,081 Developed technology 6,131 (1,993 ) 4,138 24,548 (6,095 ) 18,453 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (6,095 ) $ 20,808 |
Schedule of Expected Future Amortization Expenses | Based on identified intangible assets that are subject to amortization as of December 31, 2018 , we expect future amortization expenses for each period to be as follows (in thousands): Total 2019 2020 2021 2022 2023 Thereafter Customer relationships $ 12,077 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 6,462 Non-compete agreements 14 14 — — — — — Licenses and permits 976 106 106 101 86 86 491 Developed technology 3,525 613 613 613 613 613 460 Total future amortization expense $ 16,592 $ 1,856 $ 1,842 $ 1,837 $ 1,822 $ 1,822 $ 7,413 |
INVESTMENT IN AL MASANE AL KO_2
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Results of Operation and Financial Position for AMAK | The summarized results of operation and financial position for AMAK are as follows: Results of Operations Years Ended December 31, 2018 2017 2016 (Thousands of Dollars) Sales $ 70,234 $ 36,435 $ 9,921 Cost of sales (68,084 ) (43,304 ) (27,132 ) Gross loss 2,150 (6,869 ) (17,211 ) General, administrative and other expenses 8,879 9,903 9,690 Loss from operations $ (6,729 ) $ (16,772 ) $ (26,901 ) Gain on settlement with former operator — — 17,425 Net loss $ (6,729 ) $ (16,772 ) $ (9,476 ) Depreciation and amortization 33,469 22,419 11,672 Net income before depreciation and amortization $ 26,740 $ 5,648 $ 2,196 Financial Position December 31, 2018 2017 (Thousands of Dollars) Current assets $ 44,093 $ 23,333 Noncurrent assets 212,291 237,875 Total assets $ 256,384 $ 261,208 Current liabilities $ 17,160 $ 24,439 Long term liabilities 77,366 68,837 Shareholders' equity 161,858 167,932 Total liabilities and equity $ 256,384 $ 261,208 |
Equity in Income or Loss of AMAK Reflected on Consolidated Statements | The equity in the income or loss of AMAK reflected on the consolidated statements of income for the years ended December 31, 2018 , 2017 , and 2016 , is comprised of the following: 2018 2017 2016 AMAK Net Loss $ (6,729 ) $ (16,772 ) $ (9,476 ) Zakat tax applicable to Saudi Arabian shareholders only — — 320 AMAK Net Loss before Saudi Arabian shareholders' portion of Zakat $ (6,729 ) $ (16,772 ) $ (9,156 ) Company's share of loss reported by AMAK (33.41% beginning July 10, 2016 and 35.25% prior to July 10, 2016) $ (2,248 ) $ (5,608 ) $ (2,826 ) Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK 1,347 1,347 1,347 Equity in loss of AMAK $ (901 ) $ (4,261 ) $ (1,479 ) |
Shareholders and Percentages Owned | The following table shows AMAK shareholders and percentages owned at December 31, 2018: Name Percentage Owned Various Saudi shareholders 46.73 % Trecora Resources 33.41 % Armico 19.86 % Total 100.00 % |
LONG-TERM DEBT AND LONG-TERM _2
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Long-term Obligations | Long-term debt and long-term obligations at December 31 are summarized as follows: 2018 2017 (thousands of dollars) Revolving facility $ 18,000 $ 35,000 Term loan facility 85,312 47,250 Acquisition loan — 17,333 Loan fees (830 ) (501 ) Total long-term debt 102,482 99,082 Less current portion including loan fees 4,194 8,061 Total long-term debt, less current portion including loan fees $ 98,288 $ 91,021 |
Schedule of Principal Payments of Long-term Debt | Principal payments of long-term debt for the next five years and thereafter ending December 31 are as follows: Year Ending December 31, Long-Term Debt (thousands of dollars) 2019 4,375 2020 4,375 2021 4,375 2022 4,375 2023 85,812 Total 103,312 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued liabilities at December 31 are summarized as follows: 2018 2017 (thousands of dollars) Accrued state taxes $ 210 $ 272 Accrued payroll 936 1,407 Accrued interest 31 30 Accrued officer compensation — 500 Accrued restructuring & severance expenses (Note 21) 1,221 — Accrued foreign taxes 802 — Other liabilities 2,239 1,752 Total $ 5,439 $ 3,961 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Property and Equipment Lease Payments | Future minimum property and equipment lease payments under the non-cancelable operating leases at December 31, 2018 , are as follows: Year Ending December 31, (thousands of dollars) 2019 $ 3,670 2020 3,583 2021 3,418 2022 3,107 2023 2,288 Thereafter 2,065 Total $ 18,131 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Status of Stock Option Awards and Warrants | A summary of the status of the Company’s stock option and warrant awards is as follows: Stock Options and Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Intrinsic Value (in thousands) Outstanding at January 1, 2018 1,323,587 $ 7.82 Granted — — Expired — — Exercised (377,757 ) 5.21 Forfeited (200,000 ) 3.40 Outstanding at December 31, 2018 745,830 $ 10.33 4.6 $ — Expected to vest — $ — 0.0 $ — Exercisable at December 31, 2018 745,830 $ 10.33 4.6 $ — |
Schedule of Nonvested Share Activity | A summary of the status of the Company's non-vested options that are expected to vest is presented below: Shares Weighted Average Grant-Date Fair Value Per Share Non-vested at January 1, 2018 325,000 $ 6.81 Granted — — Forfeited (200,000 ) 3.40 Vested (125,000 ) 12.26 Non-vested at December 31, 2018 — $ — |
Restricted Stock Units Activity | A summary of the status of the Company's restricted stock units activity is as follows: Shares of Restricted Stock Units Weighted Average Grant Date Price per Share Outstanding at January 1, 2018 387,702 $ 11.39 Granted 226,908 11.45 Forfeited (103,637 ) 11.39 Vested (105,298 ) 11.99 Outstanding at December 31, 2018 405,675 $ 11.27 Expected to vest 405,675 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for income taxes consisted of the following: Year ended December 31, 2018 2017 2016 (thousands of dollars) Current federal provision (benefit) $ (74 ) $ (1,202 ) $ 1,691 Current state provision 31 282 18 Deferred federal provision (benefit) (974 ) (6,320 ) 8,645 Deferred state provision 210 81 150 Income tax expense (benefit) $ (807 ) $ (7,159 ) $ 10,504 |
Schedule of Effective Income Tax Rate Reconciliation | The difference between the effective tax rate in income tax expense and the Federal statutory rate of 21% for the year ended December 31, 2018 , and 35% for the years ended December 31 2017 and 2016 , is as follows: 2018 2017 2016 (thousands of dollars) Income taxes at U.S. statutory rate $ (822 ) $ 3,885 $ 10,476 State taxes, net of federal benefit 234 235 285 Net operating loss carryback — (961 ) — Research and development credits (263 ) — — Permanent and other items 44 (11 ) (257 ) Deferred tax impact of US tax reform — (10,307 ) — Total tax expense (benefit) $ (807 ) $ (7,159 ) $ 10,504 |
Tax Effects of Temporary Differences | Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2018 2017 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (25,169 ) $ (17,014 ) Intangible assets (1,075 ) (778 ) Other assets (40 ) (4 ) Investment in AMAK (671 ) (1,023 ) Total deferred tax liabilities $ (26,955 ) $ (18,819 ) Deferred tax assets: Accounts receivable 238 198 Inventory 133 156 Mineral interests 226 226 Foreign tax credit 802 — Net operating loss carryforward 9,073 — Post-retirement benefits 79 252 Stock-based compensation 954 971 Gross deferred tax assets 11,505 1,803 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 11,279 $ 1,577 Net deferred tax liabilities $ (15,676 ) $ (17,242 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | We also separately identify our corporate overhead which includes financing and administrative activities such as legal, accounting, consulting, investor relations, officer and director compensation, corporate insurance, and other administrative costs. Year Ended December 31, 2018 Specialty Petrochemical Specialty Wax Corporate Consolidated (in thousands) Net revenues $ 249,679 $ 38,253 $ — $ 287,932 Operating profit (loss) before depreciation and amortization 23,021 1,949 (8,275 ) 16,695 Operating profit (loss) 14,089 (3,427 ) (8,327 ) 2,335 Profit (loss) before taxes 10,705 (4,660 ) (9,184 ) (3,139 ) Depreciation and amortization 8,932 5,376 50 14,358 Capital expenditures 22,431 2,854 — 25,285 Year Ended December 31, 2018 Specialty Petrochemical Specialty Wax Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 40,745 $ — $ — $ 40,745 Total assets 284,367 115,366 91,474 (161,239 ) 329,968 Year Ended December 31, 2017 Specialty Petrochemical Specialty Wax Corporate Consolidated (in thousands) Net revenues $ 210,381 $ 34,762 $ — $ 245,143 Operating profit (loss) before depreciation and amortization 36,511 (35 ) (7,413 ) 29,063 Operating profit (loss) 30,201 (4,624 ) (7,475 ) 18,102 Profit (loss) before taxes 27,852 (5,238 ) (11,764 ) 10,850 Depreciation and amortization 6,310 4,589 62 10,961 Capital expenditures 38 14,015 — 14,053 Year Ended December 31, 2017 Specialty Petrochemical Specialty Wax Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 42,606 $ — $ — $ 42,606 Total assets 265,213 117,579 97,880 (153,346 ) 327,326 |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Year ended December 31, 2018 2017 2016 (thousands of dollars) Net income (loss) $ (2,332 ) $ 18,009 $ 19,428 Basic earnings (loss) per common share: Weighted average shares outstanding 24,438 24,294 24,284 Per share amount (dollars) $ (0.10 ) $ 0.74 $ 0.80 Diluted earnings (loss) per common share: Weighted average shares outstanding 24,438 25,129 24,982 Per share amount (dollars) $ (0.10 ) $ 0.72 $ 0.78 Weighted average shares-denominator basic computation 24,438 24,294 24,284 Unvested restricted stock unit grant — 367 310 Effect of dilutive stock options — 468 388 Weighted average shares, as adjusted denominator diluted computation 24,438 25,129 24,982 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The quarterly results of operations shown below are derived from unaudited financial statements for the eight quarters ended December 31, 2018 (in thousands, except per share data, rounding may apply): Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 71,741 $ 68,106 $ 73,416 $ 74,669 $ 287,932 Gross profit 10,140 8,142 6,842 2,694 27,818 Net income (loss) 2,352 2,215 (1,609 ) (5,290 ) (2,332 ) Basic EPS (1) $ 0.10 $ 0.09 $ (0.07 ) $ (0.22 ) $ (0.10 ) Diluted EPS (1) $ 0.09 $ 0.09 $ (0.07 ) $ (0.22 ) $ (0.10 ) Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (2) Total Revenues $ 55,542 $ 62,115 $ 61,508 $ 65,978 $ 245,143 Gross profit 10,618 11,107 9,870 9,966 41,561 Net income 1,487 832 1,718 13,972 18,009 Basic EPS (1) $ 0.06 $ 0.03 $ 0.07 $ 0.58 $ 0.74 Diluted EPS (1) $ 0.06 $ 0.03 $ 0.07 $ 0.56 $ 0.72 (1) Basic and diluted earnings per share are computed independently for each of the quarters presented based on the weighted average number of common shares outstanding during that period. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share. (2) As discussed in Note 16 the TCJA changed the federal corporate income tax rates from 35% to 21% resulting in a benefit from deferred taxes of approximately $10.3 million . |
AMAK FINANCIAL STATEMENTS (Tabl
AMAK FINANCIAL STATEMENTS (Tables) - AMAK | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
Balance Sheets | Balance Sheets December 31, 2018 2017 (Expressed in Saudi Riyals) ASSETS Current assets: Cash and cash equivalents 31,510,496 32,325,537 Accounts receivable 16,235,035 8,213,816 Inventories 45,871,120 27,226,932 Advances to shareholders (Note 1) 52,562,028 — Advances to contractors and other 19,168,765 19,731,780 Total current assets 165,347,444 87,498,065 Non-current assets: Property and equipment, net 634,856,075 693,801,671 Development costs, net 155,281,525 191,528,180 Deferred mine closure costs 5,955,999 6,700,499 Total non-current assets 796,093,599 892,030,350 961,441,043 979,528,415 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities 28,756,945 22,672,618 Zakat and income tax liability 5,400,000 3,516,673 Due to shareholders — 453,816 Capital lease obligation, current portion 193,206 — Long-term debt, current portion 30,000,000 65,000,000 Total current liabilities 64,350,151 91,643,107 Non-current liabilities Provision for mine closure costs 16,063,136 15,519,938 Capital lease obligation, net of current portion 359,811 — Long-term debt, net of current portion and deferred finance costs 266,258,712 229,082,810 End-of-service indemnities 3,649,889 2,518,529 Deferred income taxes 3,792,785 11,017,714 Total non-current liabilities 290,124,333 258,138,991 Balance Sheets - (Continued) December 31, 2018 2017 (Expressed in Saudi Riyals) Commitments and contingencies (Note 14) Shareholders' equity Share capital 820,000 780,000 Share premium — 37,546 Accumulated deficit (213,033 ) (187,800 ) Total shareholders' equity 606,967 629,746 961,441 979,528 |
Statements of Operations | Statements of Operations December 31, 2018 2017 2016 (Expressed in Saudi Riyals) Revenues 263,377,273 136,629,881 37,202,504 Costs of revenues 255,313,296 162,388,373 101,743,839 Operating income (loss) 8,063,977 (25,758,492 ) (64,541,335 ) General and administrative expenses 29,475,998 28,299,733 26,957,555 Loss from operations (21,412,021 ) (54,058,225 ) (91,498,890 ) Other income (expense) Gain on forgiveness of liabilities and spare parts (Note 8) — — 65,345,250 Finance charges (5,969,821 ) (6,103,680 ) (6,043,410 ) Other income 323,575 893,524 260,953 (5,646,246 ) (5,210,156 ) 59,562,793 Loss before Zakat and income tax (27,058,267 ) (59,268,381 ) (31,936,097 ) Zakat and income tax benefit (expense) 1,824,929 (3,627,193 ) (3,596,244 ) Net loss (25,233,338 ) (62,895,574 ) (35,532,341 ) |
Statements of Changes in Shareholders' Equity | Statements of Changes in Shareholders' Equity (Expressed in Saudi Riyals) Retained Earnings Share Share (Accumulated Capital Premium Deficit) Total Balance at December 31, 2015 740,000,000 — (89,372,188 ) 650,627,812 Issuance of share capital and premium 40,000,000 37,546,420 — 77,546,420 Net loss — — (35,532,341 ) (35,532,341 ) Balance at December 31, 2016 780,000,000 37,546,420 (124,904,529 ) 692,641,891 Net loss — — (62,895,574 ) (62,895,574 ) Balance at December 31, 2017 780,000,000 37,546,420 (187,800,103 ) 629,746,317 Issuance of share premium — 2,453,580 — 2,453,580 Conversion of share premium to share capital 40,000,000 (40,000,000 ) — — Net loss — — (25,233,338 ) (25,233,338 ) Balance at December 31, 2018 820,000,000 — (213,033,441 ) 606,966,559 |
Statements of Cash Flows | Statements of Cash Flows December 31, 2018 2017 2016 (Expressed in Saudi Riyals) Cash flows from operating activities: Net loss (25,233,338 ) (62,895,574 ) (35,532,341 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 125,507,864 83,547,586 43,768,238 Accretion of deferred mine closure costs 543,198 524,829 507,081 Amortization of deferred finance costs 2,175,902 1,610,733 2,147,644 Gain on forgiveness of liabilities — — (65,345,250 ) Deferred income taxes (7,224,929 ) 417,966 1,718,258 Changes in operating assets and liabilities: Accounts receivable (8,021,219 ) (8,213,816 ) 28,351,618 Inventories (18,644,188 ) (11,351,752 ) 15,754,952 Advances to contractors and other 563,016 (3,944,995 ) (6,186,357 ) Accounts payable and accrued liabilities 6,084,327 9,638,009 3,511,632 Zakat and income tax liability 1,883,327 1,583,048 679,206 Pre-export advance payment — — (9,150,880 ) End-of-service indemnities 1,131,360 1,037,893 (264,797 ) Net cash provided by (used in) operating activities 78,765,320 11,953,927 (20,040,996 ) Cash flows from investing activities: Additions to property and equipment (28,945,309 ) (31,550,443 ) (29,246,001 ) Statements of Cash Flows - (Continued) December 31, 2018 2017 2016 (Expressed in Saudi Riyals) Cash flows from financing activities: Issuance of share capital and premium 2,453,580 — 75,092,840 Payments on capital lease obligations (72,788 ) — — Payments on long-term debt — (5,000,000 ) — Net advances from (to) shareholders (53,015,844 ) 403,147 299,231 Net cash provided by (used in) financing activities (50,635,052 ) (4,596,853 ) 75,392,071 Increase (decrease) in cash and cash equivalents (815,041 ) (24,193,369 ) 26,105,074 Cash and cash equivalents, beginning of year 32,325,537 56,518,906 30,413,832 Cash and cash equivalents, end of year 31,510,496 32,325,537 56,518,906 Supplemental cash flow information Cash paid for interest 3,927,778 3,686,000 3,895,766 Cash paid for Zakat and income tax 3,212,813 1,626,179 1,198,780 Supplemental disclosure of non-cash items Assets acquired through capital lease obligations 625,805 — — |
AMAK ORGANIZATION AND BUSINESS
AMAK ORGANIZATION AND BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Schedule of Ownership in Joint Stock Company | Except for Trecora and ARMICO, all other shareholders are Saudi nationals or companies wholly owned by Saudi nationals. Our ownership is as follows: Shares Ownership Percentage Saudi shareholders 38,349,184 46.8 Trecora (US Company) 27,402,876 33.4 ARMICO (Pan Arab Organization) 16,247,940 19.8 82,000,000 100.00 |
AMAK INVENTORIES (Tables)
AMAK INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory [Line Items] | |
Inventories | Inventories include the following at December 31: 2018 2017 (thousands of dollars) Raw material $ 4,742 $ 3,703 Work in process 173 27 Finished products 11,624 14,720 Total inventory $ 16,539 $ 18,450 |
AMAK | |
Inventory [Line Items] | |
Inventories | Inventories consisted of the following at: December 31, 2018 2017 Ore concentrates 17,020,657 12,118,132 Stockpile ore 19,134,297 9,417,626 Precious metal dore 2,159,192 — Explosives 1,134,728 485,668 Chemicals and other 6,422,246 5,205,506 45,871,120 27,226,932 |
AMAK ADVANCES TO CONTRACTORS _2
AMAK ADVANCES TO CONTRACTORS AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Advances to Contractors and Other | Advances to contractors and other consisted of the following at: December 31, 2018 2017 Advances to contractors 15,127,502 11,992,870 Prepaid expenses 1,196,218 4,385,449 Other miscellaneous advances and receivables 2,845,045 3,353,461 19,168,765 19,731,780 |
AMAK PROPERTY AND EQUIPMENT (Ta
AMAK PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | Plant, pipeline and equipment include the following at December 31: 2018 2017 (thousands of dollars) Platinum catalyst $ 1,612 $ 1,612 Catalyst 3,131 779 Land 5,428 5,428 Plant, pipeline and equipment 253,905 186,946 Construction in progress 4,343 50,996 Total plant, pipeline and equipment 268,419 245,761 Less accumulated depreciation (73,762 ) (63,240 ) Net plant, pipeline and equipment $ 194,657 $ 182,521 |
AMAK | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | Property and equipment, net consisted of the following at: December 31, 2018 2017 Buildings 191,041,157 191,041,157 Leasehold improvements 1,838,317 1,838,317 Heavy equipment 118,125,568 110,259,122 Motor vehicles 22,467,300 22,783,108 Civil works 15,662,671 15,582,921 Tailings dam 23,042,594 22,684,394 Plant and machinery 324,372,695 315,029,454 Mining assets – rehabilitation costs 98,894,826 98,894,826 Mining assets – underground development costs 267,128,896 254,832,012 Construction in progress 5,106,409 5,532,817 1,067,680,433 1,038,478,128 Less accumulated depreciation, depletion and amortization (432,824,358 ) (344,676,457 ) 634,856,075 693,801,671 |
AMAK DEVELOPMENT COSTS (Tables)
AMAK DEVELOPMENT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Development Costs, Net | Development costs, net consisted of the following at: December 31, 2018 2017 Cost 289,973,237 289,973,237 Accumulated amortization (134,691,712 ) (98,445,057 ) 155,281,525 191,528,180 |
AMAK ACCOUNTS PAYABLE, ACCRUE_2
AMAK ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following at: December 31, 2018 2017 Accounts payable and accrued liabilities 26,925,170 17,858,012 Other 381,763 2,802,493 Accrued salaries and payroll expenses 1,450,012 2,012,113 28,756,945 22,672,618 |
AMAK ZAKAT AND INCOME TAX (Tabl
AMAK ZAKAT AND INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
Components of Income Tax Benefit (Expense) | The provision for income taxes consisted of the following: Year ended December 31, 2018 2017 2016 (thousands of dollars) Current federal provision (benefit) $ (74 ) $ (1,202 ) $ 1,691 Current state provision 31 282 18 Deferred federal provision (benefit) (974 ) (6,320 ) 8,645 Deferred state provision 210 81 150 Income tax expense (benefit) $ (807 ) $ (7,159 ) $ 10,504 |
Tax Effects of Temporary Differences | Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2018 2017 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (25,169 ) $ (17,014 ) Intangible assets (1,075 ) (778 ) Other assets (40 ) (4 ) Investment in AMAK (671 ) (1,023 ) Total deferred tax liabilities $ (26,955 ) $ (18,819 ) Deferred tax assets: Accounts receivable 238 198 Inventory 133 156 Mineral interests 226 226 Foreign tax credit 802 — Net operating loss carryforward 9,073 — Post-retirement benefits 79 252 Stock-based compensation 954 971 Gross deferred tax assets 11,505 1,803 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 11,279 $ 1,577 Net deferred tax liabilities $ (15,676 ) $ (17,242 ) |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Components of Income Tax Benefit (Expense) | The components of Zakat and income tax benefit (expense) are as follows: Years ended December 31, 2018 2017 2016 Deferred income tax benefit 12,961,569 8,617,706 6,694,909 Change in valuation allowance (5,736,640 ) (9,035,670 ) (8,413,167 ) Current Zakat and income tax expense (5,400,000 ) (3,209,229 ) (1,877,986 ) Zakat and income tax benefit (expense) 1,824,929 (3,627,193 ) (3,596,244 ) |
Tax Effects of Temporary Differences | Tax effects of temporary differences that give rise to significant portions of non-Saudi owners deferred tax assets and deferred tax liabilities were as follows: December 31, 2018 2017 Deferred tax assets: Loss carryforward 42,194 42,884 Other 657 469 42,851 43,352 Deferred tax liabilities: Property and Equipment (7,806 ) (21,236 ) Net deferred tax asset 35,045 22,116 Valuation allowance (38,837 ) (33,134 ) Net deferred tax liability (3,793 ) (11,018 ) |
AMAK LONG-TERM DEBT (Tables)
AMAK LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Repayment Schedule | Principal payments of long-term debt for the next five years and thereafter ending December 31 are as follows: Year Ending December 31, Long-Term Debt (thousands of dollars) 2019 4,375 2020 4,375 2021 4,375 2022 4,375 2023 85,812 Total 103,312 |
AMAK | |
Debt Instrument [Line Items] | |
Summary of Long-Term Debts | Long-term debts are summarized as follows at: December 31, 2018 2017 SIDF loan agreement 305,000,000 305,000,000 Deferred finance charges (8,741,288 ) (10,917,190 ) Total debt 296,258,712 294,082,810 Less current portion 30,000,000 65,000,000 Total long-term debt, less current portion 266,258,712 229,082,810 |
Repayment Schedule | The repayment schedule is as follows: Years Ending December 31, 2019 30,000,000 2020 50,000,000 2021 60,000,000 2022 60,000,000 2023 70,000,000 Thereafter 35,000,000 305,000,000 |
AMAK END-OF-SERVICE INDEMNITI_2
AMAK END-OF-SERVICE INDEMNITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Change in End-of-Service Indemnities Provision | The change in the end-of-service indemnities provision is as follows: Years Ended December 31, 2018 2017 Balance, beginning of year 2,518,529 1,480,636 Provision for the year 1,347,418 1,375,024 Paid during the year (216,058 ) (337,131 ) Balance, end of year 3,649,889 2,518,529 |
AMAK ASSET RETIREMENT OBLIGAT_2
AMAK ASSET RETIREMENT OBLIGATIONS (Tables) - AMAK | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
Deferred Mine Closure Costs | Deferred mine closure costs consisted of the following at: December 31, 2018 2017 Cost 12,842,625 12,842,625 Accumulated amortization (6,886,626 ) (6,142,126 ) 5,955,999 6,700,499 |
Summary of Changes in Provision for Mine Closure Costs | A summary of changes in our provision for mine closure costs is as follows: Years Ended December 31, 2018 2017 2016 Balance, beginning of year 15,519,938 14,995,109 14,488,028 Accretion expense 543,198 524,829 507,081 Balance, end of year 16,063,136 15,519,938 14,995,109 |
AMAK GENERAL AND ADMINISTRATI_2
AMAK GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Summary of General and Administrative Expenses | A summary of general and administrative expenses is as follows: Years Ended December 31, 2018 2017 2016 Wages, salaries and related costs 17,036,965 14,837,901 10,195,511 Mine closure and environmental 1,287,698 1,641,580 1,623,831 Office expenses 9,287,218 6,589,090 5,491,679 Travel and accommodation 593,046 2,958,938 1,477,413 Professional fees 1,271,071 2,272,224 8,169,121 29,475,998 28,299,733 26,957,555 |
AMAK COMMITMENTS AND CONTINGE_2
AMAK COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |
Schedule of Future Minimum Property and Equipment Lease Payments | Future minimum property and equipment lease payments under the non-cancelable operating leases at December 31, 2018 , are as follows: Year Ending December 31, (thousands of dollars) 2019 $ 3,670 2020 3,583 2021 3,418 2022 3,107 2023 2,288 Thereafter 2,065 Total $ 18,131 |
AMAK | |
Loss Contingencies [Line Items] | |
Schedule of Future Minimum Property and Equipment Lease Payments | A summary of these commitments are as follows: Years Ending December 31, 2019 990,000 2020 990,000 2021 990,000 2022 990,000 2023 550,000 Thereafter 1,650,000 6,160,000 |
Schedule of Future Minimum Lease Payments for Capital Leases | The future minimum lease payments under the capital lease obligations are as follows for the years ending December 31,: 2019 250,526 2020 250,526 2021 147,558 Total minimum lease payments 648,610 Less deferred financial charges (95,593 ) Total capital lease obligations 553,017 Less: current portion of capital lease obligations 193,206 Total long term portion, net current portion 359,811 |
BUSINESS AND OPERATIONS OF TH_2
BUSINESS AND OPERATIONS OF THE COMPANY (Details) | Dec. 31, 2018 |
AMAK | |
Noncontrolling Interest [Line Items] | |
Ownership Percentage | 33.00% |
PEVM | |
Noncontrolling Interest [Line Items] | |
Ownership Percentage | 55.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)ر.س / $ | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)account | |
Accounting Policies [Abstract] | |||
Increase in allowance for doubtful accounts | $ 152,000 | $ 0 | $ 90,000 |
Receivable write-offs | $ 0 | $ 0 | $ 93,000 |
Number of accounts written off | account | 1 | ||
Imputed interest rates on outstanding notes | 4.00% | 4.00% | |
Notes receivable allowance | $ 0 | $ 0 | |
Employer percent of match | 100.00% | ||
Employer percent match of gross pay | 6.00% | ||
Vesting period under 401(k) plan | 2 years | ||
Matching contributions on behalf of employees | $ 1,502,000 | 1,412,000 | $ 1,195,000 |
Reduction in depreciation expense due to amortization of capitalize liability | $ 787,000 | $ 840,000 | $ 1,047,000 |
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 | ||
Undiscounted future minimum operating lease payments not recognized under current standard | $ 18,131,000 |
ACQUISITION OF B PLANT - Additi
ACQUISITION OF B PLANT - Additional Information (Details) $ in Thousands | May 02, 2016USD ($)a | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||
Cash paid in acquisition | $ 0 | $ 0 | $ 2,011 | |
Bargain purchase gain | $ 0 | $ 0 | $ 11,549 | |
BASF Facility | ||||
Business Acquisition [Line Items] | ||||
Cash paid in acquisition | $ 2,011 | |||
Acquisition transaction costs | 11 | |||
Earnout provision based upon revenue | $ 1,800 | |||
Area of real estate | a | 6.5 | |||
Bargain purchase gain | $ 11,549 |
ACQUISITION OF B PLANT - Purcha
ACQUISITION OF B PLANT - Purchase Price Allocation (Details) - USD ($) $ in Thousands | May 02, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Cash paid | $ 0 | $ 0 | $ 2,011 | |
Estimated earnout liability | 0 | 0 | 733 | |
Fixed assets at FMV | ||||
Bargain purchase gain | $ 0 | $ 0 | $ 11,549 | |
BASF Facility | ||||
Business Acquisition [Line Items] | ||||
Cash paid | $ 2,011 | |||
Estimated earnout liability | 733 | |||
Purchase Price | 2,744 | |||
Fixed assets at FMV | ||||
Land | 980 | |||
Site improvements | 30 | |||
Buildings | 1,350 | |||
Production equipment | 11,933 | |||
Total of Fixed assets at FMV | 14,293 | |||
Bargain purchase gain | $ 11,549 |
CONCENTRATIONS OF REVENUES AN_2
CONCENTRATIONS OF REVENUES AND CREDIT RISK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Accounts receivable | $ 27,112,000 | $ 25,779,000 | |
Amount owed to supplier for feedstock purchases | 4,700,000 | $ 8,500,000 | |
FDIC insured amount | $ 250,000 | ||
Supplier Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 100.00% | 100.00% | 99.00% |
Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 17.00% | 19.60% | 20.10% |
Revenue | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 35.40% | 20.80% | 23.50% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Accounts receivable | $ 11,000,000 | $ 5,800,000 |
TRADE RECEIVABLES (Details)
TRADE RECEIVABLES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Trade receivables | $ 27,564 | $ 26,079 |
Less allowance for doubtful accounts | (452) | (300) |
Trade receivables, net | $ 27,112 | $ 25,779 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid license | $ 2,419 | $ 1,919 |
Spare parts | 1,597 | 954 |
Other prepaid expenses and assets | 648 | 772 |
Total | $ 4,664 | $ 3,645 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 4,742 | $ 3,703 |
Work in process | 173 | 27 |
Finished products | 11,624 | 14,720 |
Total inventory | 16,539 | 18,450 |
Inventory products in transit | $ 4,100 | $ 3,700 |
PLANT, PIPELINE AND EQUIPMENT_2
PLANT, PIPELINE AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | $ 268,419 | $ 245,761 | |
Less accumulated depreciation | (73,762) | (63,240) | |
PLANT, PIPELINE, AND EQUIPMENT, NET | 194,657 | 182,521 | |
Interest capitalized for construction | 731 | 937 | $ 450 |
Capitalized labor costs | 2,307 | 4,344 | 2,889 |
Amortization included in cost of sales | 59 | 25 | $ 98 |
Platinum catalyst | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 1,612 | 1,612 | |
Catalyst | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 3,131 | 779 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 5,428 | 5,428 | |
Plant, pipeline and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 253,905 | 186,946 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | $ 4,343 | $ 50,996 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible assets subject to amortization (Definite-lived) | |||
Intangible assets subject to amortization, Gross | $ 24,548 | $ 24,548 | |
Accumulated Amortization | (7,956) | (6,095) | |
Intangible assets subject to amortization, Net | 16,592 | 18,453 | |
Intangible assets not subject to amortization (Indefinite-lived) | |||
Total, Gross | 26,903 | 26,903 | |
Total, Net | 18,947 | 20,808 | |
Amortization of intangible assets | 1,861 | 1,861 | $ 1,880 |
Emissions Allowance | |||
Intangible assets not subject to amortization (Indefinite-lived) | |||
Intangible assets not subject to amortization, Net | 197 | 197 | |
Trade name | |||
Intangible assets not subject to amortization (Indefinite-lived) | |||
Intangible assets not subject to amortization, Net | 2,158 | 2,158 | |
Customer relationships | |||
Intangible assets subject to amortization (Definite-lived) | |||
Intangible assets subject to amortization, Gross | 16,852 | 16,852 | |
Accumulated Amortization | (4,775) | (3,651) | |
Intangible assets subject to amortization, Net | 12,077 | 13,201 | |
Non-compete agreements | |||
Intangible assets subject to amortization (Definite-lived) | |||
Intangible assets subject to amortization, Gross | 94 | 94 | |
Accumulated Amortization | (80) | (61) | |
Intangible assets subject to amortization, Net | 14 | 33 | |
Licenses and permits | |||
Intangible assets subject to amortization (Definite-lived) | |||
Intangible assets subject to amortization, Gross | 1,471 | 1,471 | |
Accumulated Amortization | (495) | (390) | |
Intangible assets subject to amortization, Net | 976 | 1,081 | |
Developed technology | |||
Intangible assets subject to amortization (Definite-lived) | |||
Intangible assets subject to amortization, Gross | 6,131 | 6,131 | |
Accumulated Amortization | (2,606) | (1,993) | |
Intangible assets subject to amortization, Net | $ 3,525 | $ 4,138 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Expected Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
2019 | $ 1,856 | |
2020 | 1,842 | |
2021 | 1,837 | |
2022 | 1,822 | |
2023 | 1,822 | |
Thereafter | 7,413 | |
Intangible assets subject to amortization, Net | 16,592 | $ 18,453 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 1,123 | |
2020 | 1,123 | |
2021 | 1,123 | |
2022 | 1,123 | |
2023 | 1,123 | |
Thereafter | 6,462 | |
Intangible assets subject to amortization, Net | 12,077 | 13,201 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 14 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Intangible assets subject to amortization, Net | 14 | 33 |
Licenses and permits | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 106 | |
2020 | 106 | |
2021 | 101 | |
2022 | 86 | |
2023 | 86 | |
Thereafter | 491 | |
Intangible assets subject to amortization, Net | 976 | 1,081 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 613 | |
2020 | 613 | |
2021 | 613 | |
2022 | 613 | |
2023 | 613 | |
Thereafter | 460 | |
Intangible assets subject to amortization, Net | $ 3,525 | $ 4,138 |
INVESTMENT IN AL MASANE AL KO_3
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") (Details) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2018USD ($)ر.س / $shares | Jul. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2018USD ($)ر.س / $shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Oct. 31, 2018shares | Jul. 31, 2016ر.س / sharesshares | Jul. 30, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 | 3.75 | ||||||
Results of Operations [Abstract] | ||||||||
Operating income (loss) | $ 2,335,000 | $ 18,102,000 | $ 18,707,000 | |||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | ||||||||
Equity in loss of AMAK | (901,000) | (4,261,000) | (1,479,000) | |||||
Gain from equity issuance by AMAK | $ 0 | $ 0 | 3,168,000 | |||||
Common stock, shares outstanding (in shares) | shares | 24,500,000 | 24,500,000 | 24,300,000 | |||||
AMAK | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Investment in AMAK | $ 38,700,000 | $ 38,700,000 | $ 45,100,000 | |||||
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 | 3.75 | ||||||
Results of Operations [Abstract] | ||||||||
Sales | $ 70,234,000 | 36,435,000 | 9,921,000 | |||||
Cost of sales | (68,084,000) | (43,304,000) | (27,132,000) | |||||
Gross loss | 2,150,000 | (6,869,000) | (17,211,000) | |||||
General, administrative and other expenses | 8,879,000 | 9,903,000 | 9,690,000 | |||||
Operating income (loss) | (6,729,000) | (16,772,000) | (26,901,000) | |||||
Gain on settlement with former operator | 0 | 0 | 17,425,000 | |||||
Net loss | (6,729,000) | (16,772,000) | (9,476,000) | |||||
Depreciation and amortization | 33,469,000 | 22,419,000 | 11,672,000 | |||||
Net income before depreciation and amortization | 26,740,000 | 5,648,000 | 2,196,000 | |||||
Equity Method Investment, Summarized Financial Information [Abstract] | ||||||||
Current assets | $ 44,093,000 | 44,093,000 | 23,333,000 | |||||
Noncurrent assets | 212,291,000 | 212,291,000 | 237,875,000 | |||||
Total assets | 256,384,000 | 256,384,000 | 261,208,000 | |||||
Current liabilities | 17,160,000 | 17,160,000 | 24,439,000 | |||||
Long term liabilities | 77,366,000 | 77,366,000 | 68,837,000 | |||||
Shareholders' equity | 161,858,000 | 161,858,000 | 167,932,000 | |||||
Total liabilities and equity | $ 256,384,000 | 256,384,000 | 261,208,000 | |||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | ||||||||
AMAK Net Loss | (6,729,000) | (16,772,000) | (9,476,000) | |||||
Zakat tax applicable to Saudi Arabian shareholders only | 0 | 0 | 320,000 | |||||
AMAK Net Loss before Saudi Arabian shareholders' portion of Zakat | (6,729,000) | (16,772,000) | (9,156,000) | |||||
Company's share of loss reported by AMAK (33.41% beginning July 10, 2016 and 35.25% prior to July 10, 2016) | (2,248,000) | (5,608,000) | (2,826,000) | |||||
Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK | 1,347,000 | 1,347,000 | 1,347,000 | |||||
Equity in loss of AMAK | (901,000) | (4,261,000) | (1,479,000) | |||||
Gain upon formation of AMAK | $ 16,200,000 | |||||||
Issued to employees (in shares) | shares | 4,000,000 | |||||||
Percentage investment in AMAK | 100.00% | 33.44% | 100.00% | 33.44% | 35.25% | |||
Gain from equity issuance by AMAK | $ 3,200,000 | |||||||
Stock exchanged during period (in shares) | shares | 24,489 | |||||||
Approved repurchase amount (in shares) | shares | 2,500,000 | |||||||
Return on investment | $ 5,300,000 | |||||||
Percentage of shares to be repurchased | 10.00% | |||||||
Common stock, shares outstanding (in shares) | shares | 82,000,000 | 82,000,000 | ||||||
Amount receivable for unreimbursed travel expenses | $ 54,000 | $ 54,000 | 121,000 | |||||
Impairment charges recorded | $ 0 | $ 0 | $ 0 | |||||
AMAK | Various Saudi shareholders | ||||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | ||||||||
Percentage investment in AMAK | 46.73% | 46.73% | ||||||
AMAK | Trecora Resources | ||||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | ||||||||
Percentage investment in AMAK | 33.41% | 33.41% | ||||||
AMAK | Armico | ||||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | ||||||||
Percentage investment in AMAK | 19.86% | 19.86% | ||||||
Arab Mining Co | ||||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | ||||||||
Issued to employees (in shares) | shares | 3,750,000 | |||||||
Share price (in SR and dollars per share) | (per share) | $ 5.33 | ر.س 20.00 | ||||||
Reserved for future issuance (in shares) | shares | 250,000 | 250,000 | ||||||
Treasury Stock | ||||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | ||||||||
Stock exchanged during period (in shares) | shares | 65,000 |
MINERAL PROPERTIES IN THE UNI_2
MINERAL PROPERTIES IN THE UNITED STATES (Details) | 12 Months Ended | |
Dec. 31, 2018aClaimT | Aug. 31, 2001Claim | |
Mineral Industries Disclosures [Abstract] | ||
Number of patented mining claims in which PEVM has undivided interest | 48 | |
Number of unpatented mining claims in which PEVM has undivided interest | 5 | |
Area under patented and unpatented mining claims | a | 1,500 | |
Allocated mining capacity per day | T | 300 | |
Unpatented claims abandoned | 75 | |
Period when the property is unused | 35 years |
LONG-TERM DEBT AND LONG-TERM _3
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS - Additional Information (Details) | Jul. 31, 2018USD ($) | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018USD ($) | Jul. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||||||||
Outstanding debt | $ 102,482,000 | $ 99,082,000 | |||||||
Debt issuance costs | 830,000 | $ 501,000 | |||||||
ARC Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | 300,000 | ||||||||
ARC Agreement | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving commitments | $ 40,000,000 | ||||||||
ARC Agreement, Fourth Amendment | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | 900,000 | ||||||||
ARC Agreement, Fourth Amendment | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving commitments | $ 75,000,000 | ||||||||
Borrowed funds under the agreement | 18,000,000 | ||||||||
Available borrowings | $ 18,000,000 | ||||||||
Effective interest rate | 4.19% | ||||||||
ARC Agreement, Fourth Amendment | Minimum | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee | 0.20% | ||||||||
ARC Agreement, Fourth Amendment | Minimum | TOCCO | |||||||||
Debt Instrument [Line Items] | |||||||||
Consolidated leverage ratio | 4.75 | ||||||||
Consolidated fixed charge coverage ratio | 1.15 | ||||||||
ARC Agreement, Fourth Amendment | Minimum | LIBOR | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.25% | ||||||||
ARC Agreement, Fourth Amendment | Minimum | Base Rate | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.25% | ||||||||
ARC Agreement, Fourth Amendment | Maximum | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee | 0.375% | ||||||||
ARC Agreement, Fourth Amendment | Maximum | TOCCO | |||||||||
Debt Instrument [Line Items] | |||||||||
Consolidated leverage ratio | 1 | ||||||||
Consolidated fixed charge coverage ratio | 1 | ||||||||
ARC Agreement, Fourth Amendment | Maximum | LIBOR | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.50% | ||||||||
ARC Agreement, Fourth Amendment | Maximum | Base Rate | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.50% | ||||||||
Single Advance Term Loan | ARC Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate amount | 70,000,000 | ||||||||
Multiple Advance Term Loan | ARC Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate amount | $ 25 | ||||||||
Term Loan | ARC Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding debt | $ 60,400,000 | ||||||||
Term Loan | ARC Agreement, Fourth Amendment | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate amount | $ 87,500,000 | ||||||||
Outstanding debt | $ 84,500,000 | ||||||||
Optional increase in borrowing capacity | $ 50,000,000 | ||||||||
Forecast | ARC Agreement, Fourth Amendment | Minimum | TOCCO | |||||||||
Debt Instrument [Line Items] | |||||||||
Consolidated leverage ratio | 3.50 | 3.75 | 4 | 4.25 | |||||
Forecast | ARC Agreement, Fourth Amendment | Maximum | TOCCO | |||||||||
Debt Instrument [Line Items] | |||||||||
Consolidated leverage ratio | 1 | 1 | 1 | 1 |
LONG-TERM DEBT AND LONG-TERM _4
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS - Principal Payments of Long-term Debt (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2019 | $ 4,375 |
2020 | 4,375 |
2021 | 4,375 |
2022 | 4,375 |
2023 | 85,812 |
Total debt | $ 103,312 |
LONG-TERM DEBT AND LONG-TERM _5
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS - Components of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jul. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 103,312 | ||
Loan fees | 830 | $ 501 | |
Total debt | 102,482 | 99,082 | |
Less current portion | 4,194 | 8,061 | |
Total long-term debt, less current portion | 98,288 | 91,021 | |
ARC Agreement, Fourth Amendment | |||
Debt Instrument [Line Items] | |||
Loan fees | 900 | ||
ARC Agreement | |||
Debt Instrument [Line Items] | |||
Loan fees | 300 | ||
Term Loan | ARC Agreement, Fourth Amendment | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 85,312 | 47,250 | |
Total debt | 84,500 | ||
Term Loan | ARC Agreement | |||
Debt Instrument [Line Items] | |||
Total debt | $ 60,400 | ||
Acquisition Loan | ARC Agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 0 | 17,333 | |
Revolving Credit Facility | ARC Agreement, Fourth Amendment | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 18,000 | $ 35,000 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities [Abstract] | ||
Accrued state taxes | $ 210 | $ 272 |
Accrued payroll | 936 | 1,407 |
Accrued interest | 31 | 30 |
Accrued officer compensation | 0 | 500 |
Accrued restructuring & severance expenses (Note 21) | 1,221 | 0 |
Accrued foreign taxes | 802 | 0 |
Other liabilities | 2,239 | 1,752 |
Total | $ 5,439 | $ 3,961 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | 12 Months Ended | ||||||
Dec. 31, 2018USD ($)Railcar | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018SAR (ر.س)Railcar | Dec. 31, 2017SAR (ر.س) | Oct. 24, 2010USD ($) | Oct. 24, 2010SAR (ر.س) | |
Guarantor Obligations [Line Items] | |||||||
Undiscounted future minimum operating lease payments not recognized under current standard | $ 18,131,000 | ||||||
Rental expense of operating leases | 4,400,000 | $ 4,400,000 | $ 4,200,000 | ||||
Mine closure and environmental | $ 745,000 | 593,000 | $ 622,000 | ||||
Railroad Transportation Equipment | |||||||
Guarantor Obligations [Line Items] | |||||||
Number of railcars | Railcar | 346 | 346 | |||||
Undiscounted future minimum operating lease payments not recognized under current standard | $ 17,300,000 | ||||||
Term of lease commitment | 9 years | 9 years | |||||
Office Space in Sugar Land, TX | |||||||
Guarantor Obligations [Line Items] | |||||||
Undiscounted future minimum operating lease payments not recognized under current standard | $ 587,000 | ||||||
Other Machinery and Equipment | |||||||
Guarantor Obligations [Line Items] | |||||||
Undiscounted future minimum operating lease payments not recognized under current standard | 207,000 | ||||||
Saudi Industrial Development Fund Limited Guarantee | |||||||
Guarantor Obligations [Line Items] | |||||||
Loan guarantee | 41.00% | 41.00% | |||||
Principal amount of loan guaranteed | $ 88,000,000 | ر.س 330,000,000.0 | |||||
Amount of maximum exposure | $ 81,300,000 | $ 81,300,000 | ر.س 305,000,000 | ر.س 305,000,000 | $ 36,100,000 | ر.س 135,300,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future Minimum Property and Equipment Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 3,670 |
2020 | 3,583 |
2021 | 3,418 |
2022 | 3,107 |
2023 | 2,288 |
Thereafter | 2,065 |
Total | $ 18,131 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2012 | Jul. 31, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation | $ 1,753,000 | $ 2,707,000 | $ 2,552,000 | ||
Share-based compensation reclassified | 318,000 | ||||
Stock Option Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for issuance (in shares) | 1,000,000 | ||||
Unrecognized compensation costs related to non-vested share-based compensation | $ 0 | ||||
Stock Option Plans | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of expiration period | 10 years | ||||
Granted (in shares) | 0 | ||||
Weighted average grant date fair value (in dollars per share) | $ 0 | $ 0 | $ 0 | ||
Proceeds from stock options exercised | $ 912,000 | $ 25,000 | $ 11,000 | ||
Shares issued upon option and warrant exercise (in shares) | 268,000 | ||||
Fair value of options vested in period | $ 1,533,000 | ||||
Stock Option Plans | Stock Options and Warrants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issued during the period (in shares) | 0 | 0 | 0 | ||
Intrinsic value of options and warrants exercised | $ 2,630,000 | $ 164,000 | $ 237,000 | ||
Exercised in period (in shares) | 378,000 | ||||
Stock Option Plans | Mr. Hatem El Khalidi | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation reclassified | $ 680,000 | $ 0 | |||
Stock Option Plans | Common Stock | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options in the money (in shares) | 500,000 | ||||
The Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for issuance (in shares) | 1,500,000 | ||||
The Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs related to non-vested restricted share-based compensation | $ 2,500,000 | ||||
Weighted average period compensation cost expected to be recognized | 1 year 10 months 24 days | ||||
Minimum | Stock Option Plans | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Minimum | The Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 2 years 6 months | ||||
Maximum | Stock Option Plans | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Maximum | The Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Options and Warrant Awards (Details) - Stock Options and Warrants - Stock Option Plans $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Stock Options and Warrants | |
Outstanding at beginning of period (in shares) | shares | 1,323,587 |
Granted (in shares) | shares | 0 |
Expired (in shares) | shares | 0 |
Exercised (in shares) | shares | (377,757) |
Forfeited (in shares) | shares | (200,000) |
Outstanding at end of period (in shares) | shares | 745,830 |
Expected to vest (in shares) | shares | 0 |
Exercisable (in shares) | shares | 745,830 |
Weighted Average Exercise Price Per Share | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 7.82 |
Granted (in dollars per share) | $ / shares | 0 |
Expired (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 5.21 |
Forfeited (in dollars per share) | $ / shares | 3.40 |
Outstanding, end of period (in dollars per share) | $ / shares | 10.33 |
Expected to vest (in dollars per share) | $ / shares | 0 |
Exercisable (in dollars per share) | $ / shares | $ 10.33 |
Weighted Average Remaining Contractual Life | |
Outstanding, contractual life | 4 years 7 months 6 days |
Expected to vest, contractual life | 0 days |
Exercisable, contractual life | 4 years 7 months 6 days |
Intrinsic Value | |
Outstanding, intrinsic value | $ | $ 0 |
Expected to vest, intrinsic value | $ | 0 |
Exercisable, intrinsic value | $ | $ 0 |
SHARE-BASED COMPENSATION - Non-
SHARE-BASED COMPENSATION - Non-vested Options (Details) - Stock Option Plans - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | |||
Non-vested, beginning of period (in shares) | 325,000 | ||
Granted (in shares) | 0 | ||
Forfeited (in shares) | (200,000) | ||
Vested (in shares) | (125,000) | ||
Non-vested, end of period (in shares) | 0 | 325,000 | |
Weighted Average Grant-Date Fair Value Per Share | |||
Non-vested, at beginning of period (in dollars per share) | $ 6.81 | ||
Granted (in dollars per share) | 0 | $ 0 | $ 0 |
Forfeited (in dollars per share) | 3.40 | ||
Vested (in dollars per share) | 12.26 | ||
Non-vested, end of period (in dollars per share) | $ 0 | $ 6.81 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock and Restricted Stock Unit Awards (Details) - The Plan - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Shares of Restricted Stock Units | |
Outstanding, beginning of period (in shares) | 387,702 |
Granted (in shares) | 226,908 |
Forfeited (in shares) | (103,637) |
Vested (in shares) | (105,298) |
Outstanding, end of period (in shares) | 405,675 |
Expected to vest (in shares) | 405,675 |
Weighted Average Grant Date Price per Share | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 11.39 |
Granted (in dollars per share) | $ / shares | 11.45 |
Forfeited (in dollars per share) | $ / shares | 11.39 |
Vested (in dollars per share) | $ / shares | 11.99 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 11.27 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2018 | |
Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||
Current federal provision (benefit) | $ (74,000) | $ (1,202,000) | $ 1,691,000 | |
Current state provision | 31,000 | 282,000 | 18,000 | |
Deferred federal provision (benefit) | (974,000) | (6,320,000) | 8,645,000 | |
Deferred state provision | 210,000 | 81,000 | 150,000 | |
Zakat and income tax benefit (expense) | $ (807,000) | (7,159,000) | 10,504,000 | |
Income tax expense or liability in Saudi Arabia | $ 0 | $ 0 | $ 802,000 | |
Income taxes at U.S. statutory rate | 21.00% | 35.00% | 35.00% | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Income taxes at U.S. statutory rate | $ (822,000) | $ 3,885,000 | $ 10,476,000 | |
State taxes, net of federal benefit | 234,000 | 235,000 | 285,000 | |
Net operating loss carryback | 0 | (961,000) | 0 | |
Research and development credits | (263,000) | 0 | 0 | |
Permanent and other items | 44,000 | (11,000) | (257,000) | |
Deferred tax impact of US tax reform | 0 | (10,307,000) | 0 | |
Zakat and income tax benefit (expense) | (807,000) | (7,159,000) | $ 10,504,000 | |
Deferred tax liabilities: | ||||
Plant, pipeline and equipment | (25,169,000) | (17,014,000) | ||
Intangible assets | (1,075,000) | (778,000) | ||
Other assets | (40,000) | (4,000) | ||
Investment in AMAK | (671,000) | (1,023,000) | ||
Total deferred tax liabilities | (26,955,000) | (18,819,000) | ||
Deferred tax assets: | ||||
Accounts receivable | 238,000 | 198,000 | ||
Inventory | 133,000 | 156,000 | ||
Mineral interests | 226,000 | 226,000 | ||
Foreign tax credit | 802,000 | 0 | ||
Net operating loss carryforward | 9,073,000 | 0 | ||
Post-retirement benefits | 79,000 | 252,000 | ||
Stock-based compensation | 954,000 | 971,000 | ||
Gross deferred tax assets | 11,505,000 | 1,803,000 | ||
Valuation allowance | (226,000) | (226,000) | ||
Total net deferred tax assets | 11,279,000 | 1,577,000 | ||
Net deferred tax liabilities | (15,676,000) | (17,242,000) | ||
Change in valuation allowance | 0 | |||
Interest or penalties related to uncertain tax positions | $ 0 | $ 0 | ||
Scenario, Plan | ||||
Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||
Income taxes at U.S. statutory rate | 21.00% |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | Segment | 2 | ||||||||||
Net revenues | $ 74,669 | $ 73,416 | $ 68,106 | $ 71,741 | $ 65,978 | $ 61,508 | $ 62,115 | $ 55,542 | $ 287,932 | $ 245,143 | $ 212,399 |
Operating profit (loss) before depreciation and amortization | 16,695 | 29,063 | |||||||||
Operating profit (loss) | 2,335 | 18,102 | 18,707 | ||||||||
Profit (loss) before taxes | (3,139) | 10,850 | $ 29,932 | ||||||||
Depreciation and amortization | 14,358 | 10,961 | |||||||||
Capital expenditures | 25,285 | 14,053 | |||||||||
Goodwill and intangible assets, net | 40,745 | 42,606 | 40,745 | 42,606 | |||||||
Total assets | 329,968 | 327,326 | 329,968 | 327,326 | |||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 0 | 0 | |||||||||
Operating profit (loss) before depreciation and amortization | (8,275) | (7,413) | |||||||||
Operating profit (loss) | (8,327) | (7,475) | |||||||||
Profit (loss) before taxes | (9,184) | (11,764) | |||||||||
Depreciation and amortization | 50 | 62 | |||||||||
Capital expenditures | 0 | 0 | |||||||||
Goodwill and intangible assets, net | 0 | 0 | 0 | 0 | |||||||
Total assets | 91,474 | 97,880 | 91,474 | 97,880 | |||||||
Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill and intangible assets, net | 0 | 0 | 0 | 0 | |||||||
Total assets | (161,239) | (153,346) | (161,239) | (153,346) | |||||||
Specialty Petrochemical | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 249,679 | 210,381 | |||||||||
Operating profit (loss) before depreciation and amortization | 23,021 | 36,511 | |||||||||
Operating profit (loss) | 14,089 | 30,201 | |||||||||
Profit (loss) before taxes | 10,705 | 27,852 | |||||||||
Depreciation and amortization | 8,932 | 6,310 | |||||||||
Capital expenditures | 22,431 | 38 | |||||||||
Goodwill and intangible assets, net | 0 | 0 | 0 | 0 | |||||||
Total assets | 284,367 | 265,213 | 284,367 | 265,213 | |||||||
Specialty Wax | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 38,253 | 34,762 | |||||||||
Operating profit (loss) before depreciation and amortization | 1,949 | (35) | |||||||||
Operating profit (loss) | (3,427) | (4,624) | |||||||||
Profit (loss) before taxes | (4,660) | (5,238) | |||||||||
Depreciation and amortization | 5,376 | 4,589 | |||||||||
Capital expenditures | 2,854 | 14,015 | |||||||||
Goodwill and intangible assets, net | 40,745 | 42,606 | 40,745 | 42,606 | |||||||
Total assets | $ 115,366 | $ 117,579 | $ 115,366 | $ 117,579 |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income (loss) | $ (2,332) | $ 18,009 | $ 19,428 | ||||||||
Basic earnings (loss) per common share: | |||||||||||
Weighted average shares outstanding (in shares) | 24,438,000 | 24,294,000 | 24,284,000 | ||||||||
Per share amount (in dollars per share) | $ (0.22) | $ (0.07) | $ 0.09 | $ 0.10 | $ 0.58 | $ 0.07 | $ 0.03 | $ 0.06 | $ (0.10) | $ 0.74 | $ 0.80 |
Diluted earnings (loss) per common share: | |||||||||||
Weighted average shares outstanding (in shares) | 24,438,000 | 25,129,000 | 24,982,000 | ||||||||
Per share amount (in dollars per share) | $ (0.22) | $ (0.07) | $ 0.09 | $ 0.09 | $ 0.56 | $ 0.07 | $ 0.03 | $ 0.06 | $ (0.10) | $ 0.72 | $ 0.78 |
Weighted average shares outstanding (in shares) | 24,438,000 | 24,294,000 | 24,284,000 | ||||||||
Unvested restricted stock unit grant (in shares) | 0 | 367,000 | 310,000 | ||||||||
Effect of dilutive stock options (in shares) | 0 | 468,000 | 388,000 | ||||||||
Weighted average shares, as adjusted denominator diluted computation (in shares) | 24,438,000 | 25,129,000 | 24,982,000 | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Potential common stock shares issuable (in shares) | 745,830 | 1,323,587 | 1,348,437 | ||||||||
Restricted Stock Units | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Potential common stock shares issuable (in shares) | 397 | ||||||||||
Stock Options | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Potential common stock shares issuable (in shares) | 264 | ||||||||||
Treasury Stock | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Stock exchanged during period (in shares) | 65,000 | ||||||||||
AMAK | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Stock exchanged during period (in shares) | 24,489 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 74,669 | $ 73,416 | $ 68,106 | $ 71,741 | $ 65,978 | $ 61,508 | $ 62,115 | $ 55,542 | $ 287,932 | $ 245,143 | $ 212,399 |
Gross profit | 2,694 | 6,842 | 8,142 | 10,140 | 9,966 | 9,870 | 11,107 | 10,618 | 27,818 | 41,561 | 39,902 |
Net income (loss) | $ (5,290) | $ (1,609) | $ 2,215 | $ 2,352 | $ 13,972 | $ 1,718 | $ 832 | $ 1,487 | $ (2,332) | $ 18,009 | $ 19,428 |
Basic EPS (in dollars per share) | $ (0.22) | $ (0.07) | $ 0.09 | $ 0.10 | $ 0.58 | $ 0.07 | $ 0.03 | $ 0.06 | $ (0.10) | $ 0.74 | $ 0.80 |
Diluted EPS (in dollars per share) | $ (0.22) | $ (0.07) | $ 0.09 | $ 0.09 | $ 0.56 | $ 0.07 | $ 0.03 | $ 0.06 | $ (0.10) | $ 0.72 | $ 0.78 |
Change in tax rate, income tax benefit | $ 10,300 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Company Director | |||
Related Party Transaction [Line Items] | |||
Consulting fees | $ 28,000 | $ 27,000 | $ 33,000 |
Outstanding liability payable | 0 | 0 | |
Chairman of the Board | |||
Related Party Transaction [Line Items] | |||
Consulting fees | 94,000 | 74,000 | $ 73,000 |
Outstanding liability payable | $ 0 | $ 0 | |
Period of consulting agreement | 3 years |
RESTRUCTURING AND SEVERANCE E_2
RESTRUCTURING AND SEVERANCE EXPENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance expenses | $ 2,347 | $ 0 | $ 0 |
Accounts Payable and Accrued Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Amount of restructuring that remains unpaid | $ 1,200 |
POST-RETIREMENT OBLIGATIONS (De
POST-RETIREMENT OBLIGATIONS (Details) - Postretirement Benefits - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Mr. Hatem El Khalidi | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation arrangement with individual, amount of post-retirement obligation outstanding | $ 1,000 | $ (1,000) | |
Chief Executive Officer | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation arrangement with individual, amount of post-retirement obligation outstanding | $ 377 | 249 | |
Defined benefit plan, benefits paid | $ 18 | $ 16 |
VALUATION AND QUALIFYING ACCO_2
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | $ 225,622 | $ 376,037 | $ 376,037 |
Charged (credited) to earnings | 0 | (150,415) | 0 |
Deductions | 0 | 0 | 0 |
Ending balance | 225,622 | 225,622 | 376,037 |
SEC Schedule, 12-09, Allowance, Credit Loss | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | 300,000 | 300,000 | 210,000 |
Charged (credited) to earnings | 152,000 | 0 | 183,339 |
Deductions | 0 | 0 | (93,339) |
Ending balance | $ 452,000 | $ 300,000 | $ 300,000 |
AMAK FINANCIAL STATEMENTS - Bal
AMAK FINANCIAL STATEMENTS - Balance Sheets (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016USD ($) | Dec. 31, 2016SAR (ر.س) | Dec. 31, 2015USD ($) | Dec. 31, 2015SAR (ر.س) |
Current assets: | ||||||||
Cash and cash equivalents | $ | $ 6,735,000 | $ 3,028,000 | $ 8,389,000 | $ 18,623,000 | ||||
Accounts receivable | $ | 27,112,000 | 25,779,000 | ||||||
Inventories | $ | 16,539,000 | 18,450,000 | ||||||
Total current assets | $ | 55,232,000 | 56,486,000 | ||||||
Non-current assets: | ||||||||
Property and equipment, net | $ | 194,657,000 | 182,521,000 | ||||||
TOTAL ASSETS | $ | 329,968,000 | 327,326,000 | ||||||
Current liabilities: | ||||||||
Zakat and income tax liability | $ | 210,000 | 272,000 | ||||||
Capital lease obligation, current portion | $ | 193,206 | |||||||
Long-term debt, current portion | $ | 4,194,000 | 8,061,000 | ||||||
Total current liabilities | $ | 29,491,000 | 31,544,000 | ||||||
Non-current liabilities | ||||||||
Capital lease obligation, net of current portion | $ | 359,811 | |||||||
Long-term debt, net of current portion and deferred finance costs | $ | 98,288,000 | 91,021,000 | ||||||
Deferred income taxes | $ | 15,676,000 | 17,242,000 | ||||||
Commitments and contingencies (Note 14) | $ | ||||||||
Shareholders' equity | ||||||||
Share capital | $ | 2,463,000 | 2,451,000 | ||||||
Share premium | $ | 58,294,000 | 56,012,000 | ||||||
Accumulated deficit | $ | 124,123,000 | 126,455,000 | ||||||
Total Trecora Resources Stockholders' Equity | $ | 184,872,000 | 184,722,000 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | $ 329,968,000 | $ 327,326,000 | ||||||
AMAK | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | ر.س 31,510,496 | ر.س 32,325,537 | ر.س 56,518,906 | ر.س 30,413,832 | ||||
Accounts receivable | 16,235,035 | 8,213,816 | ||||||
Inventories | 45,871,120 | 27,226,932 | ||||||
Advances to shareholders (Note 1) | 52,562,028 | 0 | ||||||
Advances to contractors and other | 19,168,765 | 19,731,780 | ||||||
Total current assets | 165,347,444 | 87,498,065 | ||||||
Non-current assets: | ||||||||
Property and equipment, net | 634,856,075 | 693,801,671 | ||||||
Development costs, net | 155,281,525 | 191,528,180 | ||||||
Deferred mine closure costs | 5,955,999 | 6,700,499 | ||||||
Total non-current assets | 796,093,599 | 892,030,350 | ||||||
TOTAL ASSETS | 961,441,043 | 979,528,415 | ||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | 28,756,945 | 22,672,618 | ||||||
Zakat and income tax liability | 5,400,000 | 3,516,673 | ||||||
Due to shareholders | 0 | 453,816 | ||||||
Capital lease obligation, current portion | 193,206 | 0 | ||||||
Long-term debt, current portion | 30,000,000 | 65,000,000 | ||||||
Total current liabilities | 64,350,151 | 91,643,107 | ||||||
Non-current liabilities | ||||||||
Provision for mine closure costs | 16,063,136 | 15,519,938 | 14,995,109 | ر.س 14,488,028 | ||||
Capital lease obligation, net of current portion | 359,811 | 0 | ||||||
Long-term debt, net of current portion and deferred finance costs | 266,258,712 | 229,082,810 | ||||||
End-of-service indemnities | 3,649,889 | 2,518,529 | ر.س 1,480,636 | |||||
Deferred income taxes | 3,792,785 | 11,017,714 | ||||||
Total non-current liabilities | 290,124,333 | 258,138,991 | ||||||
Shareholders' equity | ||||||||
Share capital | 820,000,000 | 780,000,000 | ||||||
Share premium | 0 | 37,546,000 | ||||||
Accumulated deficit | (213,033,000) | (187,800,000) | ||||||
Total Trecora Resources Stockholders' Equity | 606,967,000 | 629,746,000 | ||||||
TOTAL LIABILITIES AND EQUITY | ر.س 961,441,000 | ر.س 979,528,000 |
AMAK FINANCIAL STATEMENTS - Sta
AMAK FINANCIAL STATEMENTS - Statements of Operations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016USD ($) | Dec. 31, 2016SAR (ر.س) | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Revenues | $ | $ 74,669 | $ 73,416 | $ 68,106 | $ 71,741 | $ 65,978 | $ 61,508 | $ 62,115 | $ 55,542 | $ 287,932 | $ 245,143 | $ 212,399 | |||
Costs of revenues | $ | 260,114 | 203,582 | 172,497 | |||||||||||
Gross Profit | $ | 2,694 | 6,842 | 8,142 | 10,140 | 9,966 | 9,870 | 11,107 | 10,618 | 27,818 | 41,561 | 39,902 | |||
General and administrative expenses | $ | 22,396 | 22,587 | 20,434 | |||||||||||
Operating income (loss) | $ | 2,335 | 18,102 | 18,707 | |||||||||||
Other income (expense) | ||||||||||||||
Finance charges | $ | (4,100) | (2,931) | (1,985) | |||||||||||
Total other income (expense) | $ | (5,474) | (7,252) | 11,225 | |||||||||||
Income (loss) before income tax expense | $ | (3,139) | 10,850 | 29,932 | |||||||||||
Zakat and income tax benefit (expense) | $ | 807 | 7,159 | (10,504) | |||||||||||
Net income (loss) attributable to Trecora Resources | $ | $ (5,290) | $ (1,609) | $ 2,215 | $ 2,352 | $ 13,972 | $ 1,718 | $ 832 | $ 1,487 | $ (2,332) | $ 18,009 | $ 19,428 | |||
AMAK | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Revenues | ر.س 263,377,273 | ر.س 136,629,881 | ر.س 37,202,504 | |||||||||||
Costs of revenues | 255,313,296 | 162,388,373 | 101,743,839 | |||||||||||
Gross Profit | 8,063,977 | (25,758,492) | (64,541,335) | |||||||||||
General and administrative expenses | 29,475,998 | 28,299,733 | 26,957,555 | |||||||||||
Operating income (loss) | (21,412,021) | (54,058,225) | (91,498,890) | |||||||||||
Other income (expense) | ||||||||||||||
Gain on forgiveness of liabilities and spare parts | 0 | 0 | 65,345,250 | |||||||||||
Finance charges | (5,969,821) | (6,103,680) | (6,043,410) | |||||||||||
Other income | 323,575 | 893,524 | 260,953 | |||||||||||
Total other income (expense) | (5,646,246) | (5,210,156) | 59,562,793 | |||||||||||
Income (loss) before income tax expense | (27,058,267) | (59,268,381) | (31,936,097) | |||||||||||
Zakat and income tax benefit (expense) | 1,824,929 | (3,627,193) | (3,596,244) | |||||||||||
Net income (loss) attributable to Trecora Resources | ر.س (25,233,338) | ر.س (62,895,574) | ر.س (35,532,341) |
AMAK FINANCIAL STATEMENTS - S_2
AMAK FINANCIAL STATEMENTS - Statements of Changes in Shareholders' Equity (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016USD ($) | Dec. 31, 2016SAR (ر.س) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | $ | $ 185,011 | $ 164,376 | $ 142,385 | |||
Issuance of share capital and premium | $ | 284 | (36) | 11 | |||
Net loss | $ | (2,332) | 18,009 | 19,428 | |||
Balance | $ | 185,161 | 185,011 | 164,376 | |||
Share Capital | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | $ | 2,451 | 2,451 | 2,416 | |||
Issuance of share capital and premium | $ | 2 | 3 | ||||
Balance | $ | 2,463 | 2,451 | 2,451 | |||
Share Premium | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | $ | 56,012 | 53,474 | 50,662 | |||
Issuance of share capital and premium | $ | 127 | (92) | (8) | |||
Balance | $ | 58,294 | 56,012 | 53,474 | |||
Retained Earnings (Accumulated Deficit) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | $ | 126,455 | 108,446 | 89,018 | |||
Net loss | $ | (2,332) | 18,009 | 19,428 | |||
Balance | $ | $ 124,123 | $ 126,455 | $ 108,446 | |||
AMAK | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | ر.س 629,746,317 | ر.س 692,641,891 | ر.س 650,627,812 | |||
Issuance of share capital and premium | 2,453,580 | 77,546,420 | ||||
Net loss | (25,233,338) | (62,895,574) | (35,532,341) | |||
Conversion of share premium to share capital | 0 | |||||
Balance | 606,966,559 | 629,746,317 | 692,641,891 | |||
AMAK | Share Capital | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | 780,000,000 | 780,000,000 | 740,000,000 | |||
Issuance of share capital and premium | 40,000,000 | |||||
Conversion of share premium to share capital | 40,000,000 | |||||
Balance | 820,000,000 | 780,000,000 | 780,000,000 | |||
AMAK | Share Premium | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | 37,546,420 | 37,546,420 | 0 | |||
Issuance of share capital and premium | 2,453,580 | 37,546,420 | ||||
Conversion of share premium to share capital | (40,000,000) | |||||
Balance | 0 | 37,546,420 | 37,546,420 | |||
AMAK | Retained Earnings (Accumulated Deficit) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance | (187,800,103) | (124,904,529) | (89,372,188) | |||
Net loss | (25,233,338) | (62,895,574) | (35,532,341) | |||
Balance | ر.س (213,033,441) | ر.س (187,800,103) | ر.س (124,904,529) |
AMAK FINANCIAL STATEMENTS - S_3
AMAK FINANCIAL STATEMENTS - Statements of Cash Flows (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016USD ($) | Dec. 31, 2016SAR (ر.س) | |
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | $ (5,290) | $ (1,609) | $ 2,215 | $ 2,352 | $ 13,972 | $ 1,718 | $ 832 | $ 1,487 | $ (2,332) | $ 18,009 | $ 19,428 | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||
Amortization of deferred finance costs | $ | 261 | 247 | 272 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | $ | (1,485) | (3,586) | (2,809) | |||||||||||
Inventories | $ | 1,911 | (579) | (2,067) | |||||||||||
Accounts payable and accrued liabilities | $ | 2,240 | 6,983 | 3,168 | |||||||||||
Net cash provided by operating activities | $ | 19,895 | 30,828 | 28,514 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Additions to property and equipment | $ | (25,285) | (51,584) | (38,484) | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Issuance of share capital and premium | $ | 0 | 25 | 11 | |||||||||||
Payments on long-term debt | $ | (15,354) | (10,417) | (6,250) | |||||||||||
Net cash provided by in financing activities | $ | 3,683 | 15,502 | 1,761 | |||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 3,707 | (5,361) | (10,234) | |||||||||||
Cash and cash equivalents at beginning of year | $ | $ 3,028 | $ 8,389 | 3,028 | 8,389 | 18,623 | |||||||||
Cash and cash equivalents at end of year | $ | $ 6,735 | $ 3,028 | 6,735 | 3,028 | 8,389 | |||||||||
Supplemental cash flow information | ||||||||||||||
Cash paid for interest | $ | 4,560 | 3,540 | 2,545 | |||||||||||
Cash paid for Zakat and income tax | $ | $ (4,182) | $ 92 | $ (1,630) | |||||||||||
AMAK | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | ر.س (25,233,338) | ر.س (62,895,574) | ر.س (35,532,341) | |||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 125,507,864 | 83,547,586 | 43,768,238 | |||||||||||
Accretion of deferred mine closure costs | 543,198 | 524,829 | 507,081 | |||||||||||
Amortization of deferred finance costs | 2,175,902 | 1,610,733 | 2,147,644 | |||||||||||
Gain on forgiveness of liabilities | 0 | 0 | (65,345,250) | |||||||||||
Deferred income taxes | (7,224,929) | 417,966 | 1,718,258 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | (8,021,219) | (8,213,816) | 28,351,618 | |||||||||||
Inventories | (18,644,188) | (11,351,752) | 15,754,952 | |||||||||||
Advances to contractors and other | 563,016 | (3,944,995) | (6,186,357) | |||||||||||
Accounts payable and accrued liabilities | 6,084,327 | 9,638,009 | 3,511,632 | |||||||||||
Zakat and income tax liability | 1,883,327 | 1,583,048 | 679,206 | |||||||||||
Pre-export advance payment | 0 | 0 | (9,150,880) | |||||||||||
End-of-service indemnities | 1,131,360 | 1,037,893 | (264,797) | |||||||||||
Net cash provided by operating activities | 78,765,320 | 11,953,927 | (20,040,996) | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Additions to property and equipment | (28,945,309) | (31,550,443) | (29,246,001) | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Issuance of share capital and premium | 2,453,580 | 0 | 75,092,840 | |||||||||||
Payments on capital lease obligations | (72,788) | 0 | 0 | |||||||||||
Payments on long-term debt | 0 | (5,000,000) | 0 | |||||||||||
Net advances from (to) shareholders | (53,015,844) | 403,147 | 299,231 | |||||||||||
Net cash provided by in financing activities | (50,635,052) | (4,596,853) | 75,392,071 | |||||||||||
Net increase (decrease) in cash and cash equivalents | (815,041) | (24,193,369) | 26,105,074 | |||||||||||
Cash and cash equivalents at beginning of year | 32,325,537 | 56,518,906 | 30,413,832 | |||||||||||
Cash and cash equivalents at end of year | 31,510,496 | 32,325,537 | 56,518,906 | |||||||||||
Supplemental cash flow information | ||||||||||||||
Cash paid for interest | 3,927,778 | 3,686,000 | 3,895,766 | |||||||||||
Cash paid for Zakat and income tax | 3,212,813 | 1,626,179 | 1,198,780 | |||||||||||
Supplemental disclosure of non-cash items | ||||||||||||||
Assets acquired through capital lease obligations | ر.س 625,805 | ر.س 0 | ر.س 0 |
AMAK ORGANIZATION AND BUSINES_2
AMAK ORGANIZATION AND BUSINESS - Narrative (Details) | May 22, 1993SAR (ر.س)km² | Dec. 31, 2018SAR (ر.س)shipmentshares | Dec. 31, 2017SAR (ر.س)shipmentshares | Dec. 31, 2016SAR (ر.س)ر.س / sharesshares | Dec. 31, 2015SAR (ر.س)shares | Dec. 31, 2013SAR (ر.س)ر.س / sharesshares | Dec. 31, 2011SAR (ر.س)ر.س / sharesshares | Oct. 31, 2018ر.س / sharesshares | Dec. 31, 2009SAR (ر.س)share_bundleshares |
Schedule of Equity Method Investments [Line Items] | |||||||||
Authorized capital (in shares) | shares | 40,000,000 | 40,000,000 | |||||||
Issued capital (in shares) | shares | 24,600,000 | 24,500,000 | |||||||
AMAK | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Authorized capital (in shares) | shares | 450,000,000 | ||||||||
Authorized capital, number of share bundles | share_bundle | 45,000,000 | ||||||||
Authorized capital, number of shares per bundle | shares | 10 | 10 | 10 | 10 | 10 | 10 | |||
Capital issued for cash (as a percent) | 50.00% | ||||||||
Capital issued for contribution of mining rights and assets (as a percent) | 50.00% | ||||||||
Increase to authorized share capital (SR) | ر.س 40,000,000 | ر.س 40,000,000 | ر.س 190,000,000 | ر.س 50,000,000 | ر.س 50,000,000 | ||||
Authorized share capital (SR) | ر.س 820,000,000 | ر.س 780,000,000 | ر.س 740,000,000 | ر.س 550,000,000 | ر.س 500,000,000 | ||||
Issued capital (in shares) | shares | 4,000,000 | 4,000,000 | 19,000,000 | 5,000,000 | 5,000,000 | ||||
Price per share (SR per share) | ر.س / shares | ر.س 20 | ر.س 30 | ر.س 28 | ||||||
Share premium (SR) | ر.س 35,092,840 | ر.س 100,000,000 | ر.س 90,000,000 | ||||||
Increase to share premium for shares that were previously issued (SR) | ر.س 2,453,580 | ||||||||
Approved repurchase amount (in shares) | shares | 2,500,000 | ||||||||
Approved repurchase price (SR per share) | ر.س / shares | ر.س 30 | ||||||||
Advances to shareholders (SR) | ر.س 52,562,028 | ر.س 0 | |||||||
Number of shipments of ore generated during the period | shipment | 4 | 2 | |||||||
Trecora | Loan payable | Loan due to the Ministry of Finance and National Economy | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Aggregate amount | ر.س 41,250,000 | ||||||||
Trecora | Al Masane mine | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Mining rights, term | 30 years | ||||||||
Mining rights, renewal period | 20 years | ||||||||
Area of mine (in square kilometers) | km² | 44 | ||||||||
Surface rental per square kilometer per year | ر.س 10,000 | ||||||||
Surface rental per year | ر.س 440,000 |
AMAK ORGANIZATION AND BUSINES_3
AMAK ORGANIZATION AND BUSINESS - Schedule of Ownership in Joint Stock Company (Details) - AMAK | Dec. 31, 2018shares |
Schedule of Equity Method Investments [Line Items] | |
Ownership Percentage | 33.00% |
Saudi shareholders,Trecora, and ARMICO | |
Schedule of Equity Method Investments [Line Items] | |
Shares | 82,000,000 |
Ownership Percentage | 100.00% |
Saudi shareholders | |
Schedule of Equity Method Investments [Line Items] | |
Shares | 38,349,184 |
Ownership Percentage | 46.80% |
Trecora (US Company) | |
Schedule of Equity Method Investments [Line Items] | |
Shares | 27,402,876 |
Ownership Percentage | 33.40% |
ARMICO (Pan Arab Organization) | |
Schedule of Equity Method Investments [Line Items] | |
Shares | 16,247,940 |
Ownership Percentage | 19.80% |
AMAK SUMMARY OF SIGNIFICANT A_2
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) ر.س in Thousands | 12 Months Ended | |||
Dec. 31, 2018SAR (ر.س)ر.س / $ | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016SAR (ر.س) | Jun. 30, 1986 | |
Property, Plant and Equipment [Line Items] | ||||
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 | |||
AMAK | ||||
Property, Plant and Equipment [Line Items] | ||||
Interest rate on pre-export advances | 2.50% | |||
Operating lease expense | ر.س | ر.س 1,619 | ر.س 1,454 | ر.س 442 | |
Zakat tax rate | 2.50% | |||
Non-Saudi tax rate | 20.00% | |||
AMAK | Riyals | ||||
Property, Plant and Equipment [Line Items] | ||||
Foreign exchange rate (SR per USD) | 3.75 | |||
AMAK | Other assets | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 3 years | |||
AMAK | Other assets | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 20 years |
AMAK LIQUIDITY AND CAPITAL RE_2
AMAK LIQUIDITY AND CAPITAL RESOURCES (Details) - AMAK | 12 Months Ended |
Dec. 31, 2018year | |
Schedule of Equity Method Investments [Line Items] | |
Number of consecutive years of net losses | 3 |
Mining assets – rehabilitation costs | |
Schedule of Equity Method Investments [Line Items] | |
Extension to life of mine | 2 years |
AMAK INVENTORIES (Details)
AMAK INVENTORIES (Details) $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) |
Inventory [Line Items] | ||||
Inventories | $ | $ 16,539 | $ 18,450 | ||
AMAK | ||||
Inventory [Line Items] | ||||
Inventories | ر.س 45,871,120 | ر.س 27,226,932 | ||
AMAK | Ore concentrates | ||||
Inventory [Line Items] | ||||
Inventories | 17,020,657 | 12,118,132 | ||
AMAK | Stockpile ore | ||||
Inventory [Line Items] | ||||
Inventories | 19,134,297 | 9,417,626 | ||
AMAK | Precious metal dore | ||||
Inventory [Line Items] | ||||
Inventories | 2,159,192 | 0 | ||
AMAK | Explosives | ||||
Inventory [Line Items] | ||||
Inventories | 1,134,728 | 485,668 | ||
AMAK | Chemicals and other | ||||
Inventory [Line Items] | ||||
Inventories | ر.س 6,422,246 | ر.س 5,205,506 |
AMAK ADVANCES TO CONTRACTORS _3
AMAK ADVANCES TO CONTRACTORS AND OTHER (Details) - AMAK - SAR (ر.س) | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | ||
Advances to contractors | ر.س 15,127,502 | ر.س 11,992,870 |
Prepaid expenses | 1,196,218 | 4,385,449 |
Other miscellaneous advances and receivables | 2,845,045 | 3,353,461 |
Advances to contractors and other | ر.س 19,168,765 | ر.س 19,731,780 |
AMAK PROPERTY AND EQUIPMENT (De
AMAK PROPERTY AND EQUIPMENT (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016SAR (ر.س) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017SAR (ر.س) | |
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | $ | $ 268,419 | $ 245,761 | |||||
Less accumulated depreciation | $ | (73,762) | (63,240) | |||||
PLANT, PIPELINE, AND EQUIPMENT, NET | $ | 194,657 | 182,521 | |||||
Depreciation, depletion and amortization expense | $ | 14,358 | 10,961 | |||||
Construction in progress | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | $ | $ 4,343 | $ 50,996 | |||||
AMAK | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | ر.س 1,067,680,433 | ر.س 1,038,478,128 | |||||
Less accumulated depreciation | (432,824,358) | (344,676,457) | |||||
PLANT, PIPELINE, AND EQUIPMENT, NET | 634,856,075 | 693,801,671 | |||||
Depreciation, depletion and amortization expense | ر.س 88,000,000 | ر.س 64,300,000 | ر.س 0 | ||||
AMAK | Buildings | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 191,041,157 | 191,041,157 | |||||
AMAK | Leasehold improvements | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 1,838,317 | 1,838,317 | |||||
AMAK | Heavy equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 118,125,568 | 110,259,122 | |||||
AMAK | Motor vehicles | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 22,467,300 | 22,783,108 | |||||
AMAK | Civil works | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 15,662,671 | 15,582,921 | |||||
AMAK | Tailings dam | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 23,042,594 | 22,684,394 | |||||
AMAK | Plant and machinery | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 324,372,695 | 315,029,454 | |||||
AMAK | Mining assets – rehabilitation costs | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 98,894,826 | 98,894,826 | |||||
AMAK | Mining assets – underground development costs | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 267,128,896 | 254,832,012 | |||||
AMAK | Construction in progress | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | ر.س 5,106,409 | ر.س 5,532,817 |
AMAK DEVELOPMENT COSTS (Details
AMAK DEVELOPMENT COSTS (Details) - AMAK - SAR (ر.س) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Cost | ر.س 289,973,237 | ر.س 289,973,237 |
Accumulated amortization | (134,691,712) | (98,445,057) |
Development costs, net | 155,281,525 | 191,528,180 |
Amortization expenses related to development costs | ر.س 36,250,000 | ر.س 18,200,000 |
AMAK ACCOUNTS PAYABLE, ACCRUE_3
AMAK ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES (Details) $ in Thousands | Mar. 31, 2016SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) |
Schedule of Equity Method Investments [Line Items] | |||||
Other | $ | $ 733 | $ 870 | |||
Spare parts included in property and equipment, net on the balance sheets | $ | 1,597 | 954 | |||
Total amounts of liabilities recorded | $ | $ 144,807 | $ 142,315 | |||
AMAK | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Accounts payable and accrued liabilities | ر.س 26,925,170 | ر.س 17,858,012 | |||
Other | 381,763 | 2,802,493 | |||
Accrued salaries and payroll expenses | 1,450,012 | 2,012,113 | |||
Accounts payable and accrued liabilities | ر.س 28,756,945 | ر.س 22,672,618 | |||
Payment received by CGM for rights to spare parts | ر.س 4,500,000 | ||||
Economic value of forfeited spare parts | 34,477,500 | ||||
Spare parts included in property and equipment, net on the balance sheets | 4,500,000 | ||||
Total amounts of liabilities recorded | ر.س 65,345,000 |
AMAK ZAKAT AND INCOME TAX - Com
AMAK ZAKAT AND INCOME TAX - Components of Income Tax Benefit (Expense) (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016USD ($) | Dec. 31, 2016SAR (ر.س) | |
Income Tax Disclosure [Line Items] | ||||||
Deferred income tax benefit | $ | $ 1,566 | $ 5,841 | $ (8,697) | |||
Zakat and income tax benefit (expense) | $ | $ (807) | $ (7,159) | $ 10,504 | |||
AMAK | ||||||
Income Tax Disclosure [Line Items] | ||||||
Deferred income tax benefit | ر.س 12,961,569 | ر.س 8,617,706 | ر.س 6,694,909 | |||
Change in valuation allowance | (5,736,640) | (9,035,670) | (8,413,167) | |||
Current Zakat and income tax expense | (5,400,000) | (3,209,229) | (1,877,986) | |||
Zakat and income tax benefit (expense) | ر.س (1,824,929) | ر.س 3,627,193 | ر.س 3,596,244 |
AMAK ZAKAT AND INCOME TAX - Nar
AMAK ZAKAT AND INCOME TAX - Narrative (Details) - AMAK - SAR (ر.س) ر.س in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | ||
Statutory rate for non-Saudi shareholders | 20.00% | |
Tax loss carryforwards | ر.س 210,970 | ر.س 214,418 |
AMAK ZAKAT AND INCOME TAX - Tax
AMAK ZAKAT AND INCOME TAX - Tax Effects of Temporary Differences (Details) ر.س in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) |
Deferred tax assets: | ||||
Loss carryforward | $ | $ 9,073 | $ 0 | ||
Gross deferred tax assets | $ | 11,505 | 1,803 | ||
Deferred tax liabilities: | ||||
Property and Equipment | $ | (25,169) | (17,014) | ||
Valuation allowance | $ | (226) | (226) | ||
Net deferred tax liabilities | $ | $ (15,676) | $ (17,242) | ||
AMAK | ||||
Deferred tax assets: | ||||
Loss carryforward | ر.س 42,194 | ر.س 42,884 | ||
Other | 657 | 469 | ||
Gross deferred tax assets | 42,851 | 43,352 | ||
Deferred tax liabilities: | ||||
Property and Equipment | (7,806) | (21,236) | ||
Net deferred tax asset | 35,045 | 22,116 | ||
Valuation allowance | (38,837) | (33,134) | ||
Net deferred tax liabilities | ر.س (3,793) | ر.س (11,018) |
AMAK LONG-TERM DEBT - Narrative
AMAK LONG-TERM DEBT - Narrative (Details) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016USD ($) | Dec. 31, 2016SAR (ر.س) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2010SAR (ر.س) | |
Debt Instrument [Line Items] | |||||||||
Loan fees | $ | $ 830 | $ 501 | |||||||
Amortization of loan fees | $ | $ 261 | $ 247 | $ 272 | ||||||
AMAK | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan fees | ر.س 8,741,288 | ر.س 10,917,190 | |||||||
Amortization of loan fees | ر.س 2,175,902 | ر.س 1,610,733 | ر.س 2,147,644 | ||||||
Secured Debt | Loan agreement with SIDF | AMAK | |||||||||
Debt Instrument [Line Items] | |||||||||
Collateralized loan agreement | ر.س 330,000,000 | ||||||||
Loan fees | ر.س 8,741,288 | ر.س 10,917,190 | |||||||
Amortization of loan fees | ر.س 1,639,000 | ر.س 1,611,000 | ر.س 2,148,000 |
AMAK LONG-TERM DEBT - Summary o
AMAK LONG-TERM DEBT - Summary of Long-Term Debts (Details) $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) |
Debt Instrument [Line Items] | ||||
SIDF loan agreement | $ | $ 103,312 | |||
Deferred finance charges | $ | (830) | $ (501) | ||
Total debt | $ | 102,482 | 99,082 | ||
Less current portion | $ | 4,194 | 8,061 | ||
Total long-term debt, less current portion | $ | $ 98,288 | $ 91,021 | ||
AMAK | ||||
Debt Instrument [Line Items] | ||||
SIDF loan agreement | ر.س | ر.س 305,000,000 | ر.س 305,000,000 | ||
Deferred finance charges | ر.س | (8,741,288) | (10,917,190) | ||
Total debt | ر.س | 296,258,712 | 294,082,810 | ||
Less current portion | ر.س | 30,000,000 | 65,000,000 | ||
Total long-term debt, less current portion | ر.س | ر.س 266,258,712 | ر.س 229,082,810 |
AMAK LONG-TERM DEBT - Repayment
AMAK LONG-TERM DEBT - Repayment Schedule (Details) $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017SAR (ر.س) |
Years Ending December 31, | |||
2019 | $ | $ 4,375 | ||
2020 | $ | 4,375 | ||
2021 | $ | 4,375 | ||
2022 | $ | 4,375 | ||
2023 | $ | 85,812 | ||
Total debt | $ | $ 103,312 | ||
AMAK | |||
Years Ending December 31, | |||
2019 | ر.س 30,000,000 | ||
2020 | 50,000,000 | ||
2021 | 60,000,000 | ||
2022 | 60,000,000 | ||
2023 | 70,000,000 | ||
Thereafter | 35,000,000 | ||
Total debt | ر.س 305,000,000 | ر.س 305,000,000 |
AMAK END-OF-SERVICE INDEMNITI_3
AMAK END-OF-SERVICE INDEMNITIES (Details) - AMAK - SAR (ر.س) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
End-Of-Service Indemnities [Roll Forward] | ||
Balance, beginning of year | ر.س 2,518,529 | ر.س 1,480,636 |
Provision for the year | 1,347,418 | 1,375,024 |
Paid during the year | (216,058) | (337,131) |
Balance, end of year | ر.س 3,649,889 | ر.س 2,518,529 |
AMAK ASSET RETIREMENT OBLIGAT_3
AMAK ASSET RETIREMENT OBLIGATIONS - Narrative (Details) - AMAK - SAR (ر.س) ر.س in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2012 | |
Schedule of Equity Method Investments [Line Items] | ||||
ARO recorded for deferred mine closure costs | ر.س 12,843 | |||
Amortization expense | ر.س 745 | ر.س 1,117 | ر.س 1,117 |
AMAK ASSET RETIREMENT OBLIGAT_4
AMAK ASSET RETIREMENT OBLIGATIONS - Deferred Mine Closure Costs (Details) - AMAK - SAR (ر.س) | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | ||
Cost | ر.س 12,842,625 | ر.س 12,842,625 |
Accumulated amortization | (6,886,626) | (6,142,126) |
Deferred mine closure costs, net | ر.س 5,955,999 | ر.س 6,700,499 |
AMAK ASSET RETIREMENT OBLIGAT_5
AMAK ASSET RETIREMENT OBLIGATIONS - Summary of Changes in Provision for Mine Closure Costs (Details) - AMAK - SAR (ر.س) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Balance, beginning of year | ر.س 15,519,938 | ر.س 14,995,109 | ر.س 14,488,028 |
Accretion expense | 543,198 | 524,829 | 507,081 |
Balance, end of year | ر.س 16,063,136 | ر.س 15,519,938 | ر.س 14,995,109 |
AMAK GENERAL AND ADMINISTRATI_3
AMAK GENERAL AND ADMINISTRATIVE EXPENSES (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016USD ($) | Dec. 31, 2016SAR (ر.س) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Mine closure and environmental | $ | $ 745 | $ 593 | $ 622 | |||
General and administrative expenses | $ | $ 22,396 | $ 22,587 | $ 20,434 | |||
AMAK | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Wages, salaries and related costs | ر.س 17,036,965 | ر.س 14,837,901 | ر.س 10,195,511 | |||
Mine closure and environmental | 1,287,698 | 1,641,580 | 1,623,831 | |||
Office expenses | 9,287,218 | 6,589,090 | 5,491,679 | |||
Travel and accommodation | 593,046 | 2,958,938 | 1,477,413 | |||
Professional fees | 1,271,071 | 2,272,224 | 8,169,121 | |||
General and administrative expenses | ر.س 29,475,998 | ر.س 28,299,733 | ر.س 26,957,555 |
AMAK COMMITMENTS AND CONTINGE_3
AMAK COMMITMENTS AND CONTINGENCIES - Operating Lease Obligations (Details) | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 3,670,000 |
2020 | 3,583,000 |
2021 | 3,418,000 |
2022 | 3,107,000 |
2023 | 2,288,000 |
Thereafter | 2,065,000 |
Total | $ 18,131,000 |
Mining assets – rehabilitation costs | |
Operating Leased Assets [Line Items] | |
Term of lease commitment | 30 years |
Term of lease renewal | 20 years |
Guyan | Mining assets – rehabilitation costs | |
Operating Leased Assets [Line Items] | |
Term of lease commitment | 20 years |
AMAK | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 990,000 |
2020 | 990,000 |
2021 | 990,000 |
2022 | 990,000 |
2023 | 550,000 |
Thereafter | 1,650,000 |
Total | $ 6,160,000 |
AMAK COMMITMENTS AND CONTINGE_4
AMAK COMMITMENTS AND CONTINGENCIES - Capital Lease Obligations (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 250,526 |
2020 | 250,526 |
2021 | 147,558 |
Total minimum lease payments | 648,610 |
Less deferred financial charges | (95,593) |
Total capital lease obligations | 553,017 |
Less: current portion of capital lease obligations | 193,206 |
Total long term portion, net current portion | $ 359,811 |