TREC - Earnings call transcript Q3 2019

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Operator

Good day, and welcome to Trecora Resources Third Quarter 2019 Earnings Conference Call. [Operator instructions] And at this time, I would like to turn the call over to Mr. Jason Finkelstein from The Piacente Group, Inc. Please go ahead, Jason.

Jason Finkelstein

Thank you, operator, and good morning, everyone. Resources XXXX Trecora Conference the to Third Earnings Quarter Call. Welcome the release markets after was earnings wire yesterday distributed financial The the over services of the afternoon. close

Chief be on follow Chief Ahmad, management's which available Chris Controller, Quarles, Presenting for today Corporate Officer. in will prepared our also call President to remarks. our Financial and will will Executive Groves, Sami the Officer; addition session, Pat be question-and-answer

presentation started, I in statement. would like are the are review facts harbor this Litigation the Reform defined get to Statements Act safe forward-looking in of we that Securities as historical not XXXX. Before statements Private

Forward-looking based are November only this and expectations teleconference, as of X, XXXX. statements management's date of upon the beliefs

differ as Forward-looking risks filings Form projected. Company's statements subsequent recent involve are and others with that the most risks detail report XX-Q. to from annual as the materially Those uncertainties in well could in results discussed quarterly Form on greater those including reports Trecora's on and SEC, actual XX-K cause

today's certain purposes management financial only. measures for comparison During also non-GAAP will discuss call,

the a markets of earnings issued and results, of financial the measures please GAAP release of a definition close non-GAAP For see to afternoon. non-GAAP the yesterday reconciliation after financial financial

slide a the by accompanied that www.trecora.com. is webcast is available on presentation website, This Company's

this At Trecora's time, President over the call to turn and I'd to like Quarles. CEO, Pat

Pat Quarles

participating call. today's in and those Jason, all you, to Thank morning good

of as in the our I reshape to the I'll stake like remarks, as within action do, update business in my be continued the During company, well an specifically regarding would making pursuit progress discussing provide I overall before sale our execution to been our our the But AMAK. Company. excellence recent of we've

Al assets investors company, on and original closed Mining is mining today, stock new in Arabian joint developing Arabia. Kobra both is Masane Company, which owner XX% the As operates owns an call in AMAK, or Saudi Saudi existing Al for a background developer and Trecora and and

meaningful but Trecora's. a is AMAK in noncore of stake Our asset

X, be payable and with October of AMAK Trecora agreement, in interest well participating transaction to had Saudi we through announced terms equity as will this authorization. entire who entered the net purchase definitive is expenses. we Trecora existing agreement approximately into million net million in selling proceeds of certain for dollars. taxes Trecora's that our of AMAK, previously the a The repurchase expect U.S. $XX of U.S. and both Under cash as share interest. will in receive acquire On $XX be consideration shareholders equity transaction also and share sale its will

X% Trecora is $X.X has The to fourth of financing is has non-refundable targeted which conditions, million purchasers. subject from already necessary of assuming receipt approvals. government received XXXX a in all and closing no conditions approximately quarter and approvals deposit to close government sale, the of the

something that We're delay November no at government advancing point the expect transaction XX do the not processes the some this We to earlier. close the approvals fourth is indication that has This gain cited for sale be quarter. during from and will to able date the Company have we

transaction our reach is value this time. have debt to further will for reduction has and an shareholder the Upon towards capital achieved discussed some we monetize creation. commitment something have Company to asset, important quite target, that deploy close,

growth businesses greatly transaction of for a has of the after a outcome good AMAK this and believe achieves transaction Over enhancing improvement the restructuring for allowing we value significant focus shareholders. years, What that accomplished thus X opportunities. with past the a singular is operational company completion and will on its and our future upgrades, operating remain a

safety XXXX. We commercial progress the for beginning performance, improving shareholder at of reliability the value enhancing good We in in our the to our driving our driving and operations, out capturing improvement, year productivity focused priorities make set excellence. businesses. continue our of on We

earnings, achieved which flow, compares last quarter. third of improve results million expected These from $X.X priorities XX% dramatically to quarter, adjusted in debt our QX first enhance translated continuing operating they to excellent year, million X generation cash have a Trecora allowed consolidated have. the these for and year-over-year since $X.X success EBITDA further debt the in improved allow reduction along operations We our reduction, in year-over-year. increase into and cash this quarter for and meaningful

million $XX.X In of doubled repaid million $XXX.X million $XX.X million October. QX, an debt with same we to million cash for in operating we the compared compared our approximately approximately period This $XX in XXXX. in additional $X Year-to-date, current end XXXX. the debt to $X paid million nearly flow at brings to down outstanding have to

The providing company year. simultaneously delivered QX safe operations, the quarter. third of reliable products key to entire our no and year-to-date we and the are In our customers. to improving had our tied out include, drivers while results They at to high all improved laid across readability. during priorities safety We and turnaround enhancing QX, the beginning quality our accidents first,

Advanced discussed were which various electrical of the past. the network byproduct capture to run to Reformer ran in site improved anticipated upsets in for with allowed continue which Our we've related values QX, which the electrical ability the market. to Advanced through demonstrated Reformer, high reliability in vulnerabilities, The the at

on productivity concentrated opportunities. We also have capturing

elements. We continued and both challenging internal external cost

QX, and to which For gross rail storage example, savings fleet to significantly we in related contributed further reduction, improvements. margin realized

transition continued This to addition, quarter from helped maintenance. In reactive us planned in $XXX,XXX to save approximately alone. maintenance third we the

increases. higher saving cost annual 'XX allowed implemented freight rail Silsbee to had the QX the at cost addition, we In fully us and of our facility offset activities that reorganization

been Finally, excellence. pursuing commercial we've

costs, and QX. customer improving successful In improved price products assessing increase level. CX terms, after the at we are our in cutting our two on We margins sales ship profitability realized QX, a

performed our In business. addition, of organization processing of comprehensive a the commercial custom profitability review the existing

beginning we profitability implemented, enhance $XXX,XXX will estimate have As been a which result, by significant fee year. increases our next

tremendous months shown have X and In progress. XXXX of the summary, QX first

As far QX as

QX As we seeing far of typical are the demand reduction season. outlook, as

resulting XX, a The a significant operation. We to also has plant in at shutdown to plant severe returned tanks. Tuesday, on the of Silsbee experienced weather feedstock and one plant event our last damage October

recovery loss the and of volumes expect impact some we However, costs quarter. sale to

to our call I'll the Officer, Chief results. Now Sami for Financial detailed QX over year-to-date Ahmad, our and turn a of more discussion

Sami Ahmad

Pat, to Thanks, and good morning everyone.

thus accordance be will did, the allow allocation disciplined me as with use million sale interest. strategy. its us transaction AMAK sheet. capital to proceeds reduction, Trecora strengthening The our balance accelerate to with to of approximately Pat Let received from begin, of our the proceeds in expected the $XX intends substantially net debt

our of to in transaction leverage X.X completion the forma pro to expect following We be range. the the X.X

remaining and retaining world. exhaustive pay Aside the the and than than We our the Company mining buyers. a both financially sell of the process ownership metals an contacted potential mine. by and proceeds to that in potentially risk down, other conducted repurchases. includes ultimately exploring We some believe led lower alternatives, of to use options valuation it from a valuation We debt the fund for to deal strategically. at is to an and share They banks investment and we're significantly one existing choose XX excellent was because higher more the in at also shareholders leading outcome global the

to further transactions. but not the will close progresses, we specifically sale the towards, of the updates limit provide As

for was held-for-sale consolidated September as required in as periods in criteria statement consolidated investment of As the for all presented. and all balance discontinued reflected XX, the AMAK in at classification held-for-sale is the the operations met XXXX, sheet operations classified

from Now loss or to let's take our from closer and third XXXX. continuing net of operations was Net $X.X of per per the $X.X This compares look share. operations income million diluted negative quarter third operational a quarter continuing quarter third performance. in at diluted or the XXXX share a $X.XX million $X.XX in year-to-date

year, this first XXXX. share period or $X.X at net nine operations share income diluted per million from per $X.X continuing was Looking the or $X.XX million the $X.XX with for net income same months compared diluted of of

of $X.X compares $XX.X the for XX.X% year. quarter months first the million million, was this profit gross Gross last XXXX. profit an third margin and or that profit with Gross profit in same the period of compares XX.X% in a the representing million, $X.X third margin, in was million $XX.X with quarter gross and XXXX nine

continuing of $X.X with Consolidated operations operations from quarter third continuing year. same million in from operations X for million $XX.X period was last the $X.X million adjusted EBITDA adjusted compared a in $XX.X continuing EBITDA was year for first the the months period EBITDA million XXXX with from compared of same the Adjusted ago.

volumes. These in $X.X prime margins is volumes quarter EBITDA segment. million Now partially consolidated XXXX, and by explained sales offset compared The $X.X declined Petrochemical operating to of lower operations expenses wax million. from from and especially lower sales continuing second lower product to million decline $X.X the by higher were adjusted

by cumulative should have negatively quarter Additionally, income for adjusted of This continuing the third impacted Reformer primarily been This $XXX,XXX impact a amount was EBITDA to our EBITDA calculation XXXX no adjustment adjusted continuing from back adjustment from amortization. added year-to-date operations. to prior not periods license statements. related Advanced in consolidated of operations has

million more and by adjusted the for approximately driven consolidated which This nearly wax lower This Waxes and lower byproduct operations the revenues. costs, offset the $X.X better in primarily year-to-date about continuing from program resulted unit, volumes reliable of of In processing was at compared continuing as Advanced or the due same of by increased December margins, sales higher in result period increase cost labor custom XXXX operations Silsbee was driven months by operation was lower first X lower Reformer by adjusted partially reduction facility $X.X to from in EBITDA margins million implemented costs EBITDA feedstock EBITDA XXXX. a the in which XXXX, XX%. product significantly decline a Specialty the to business,

in as was as X Cash to XXXX of XXXX. performance the first flow substantially increase for months working $XX.X management. reflects million flow compared capital million the first months improved of The X operations operating in cash well operating $XX.X from as approximately

that included refunds. $X cash XXXX operating note flow should in approximately tax You million

benefits million XXXX period and for the the $X.X that General and million period were year. G&A other same third last administrative million were included compensation Hatim $XX.X to expenses the totaling of Mr. Recall year million G&A the expenses $X.X reversal Al-Khaldi about $X.X a for in in figure Year-to-date, to XXXX same the $XX.X compared million. certain ago. compared quarter

third was for Interest expense $X.X million. the quarter

in $X.X compared and to first million XXXX XXXX. X expense of months interest XXXX capitalized the million increase to due in rates For higher for to The in XXXX. XXXX, was interest compared year-to-date interest expense $X.X was

the $X.X first was of CapEx XXXX and million. CapEx quarter million approximately third months $X.X of for X the XXXX for was

year the as $XX pattern to be to for back full heavy. CapEx spending approximately million million the expect is We end $XX

of as $XX million. $X reduced with XX, million million $X by September Our availability October. was was revolver further balance in Revolver debt of

Consolidated this end $X.X cash at balance was and of million XX. second compares to June of the the XX, September quarter, million as $X.X

first X to third XXXX year. XX%, months Our XXXX continue of rate quarter effective expect and rest for the we was which the tax approximately

let starting segments, Petrochemicals. me business with you through our Specialty Now walk

in Third were large the XX.X to million second million, quarter was Canadian the continuing operations product Specialty unplanned segment an to we in saw decline third expected, a quarter. second sales quarter. had second unchanged oil the gallons the to Prime Petrochemical and sales gallons in was lower who sands, quarter. adjusted about compared which our quarter, million to EBITDA quarter volumes for Compared outage for XX.X from the $X.X the from customer a third

oil of as will well as to uncertainty remainder we the the see environment. crude government from the the pricing Canadian mandated the sands believe overall For sales production to headwinds continue XXXX, oil curtailments crude surrounding

third increase from volumes the sales to the of second up gallons million quarter million Byproduct X.X quarter in gallons, in XXXX. X.X

used feedstock you Byproduct recall costs. production it unit by maximize to to per in pricing was gallon $X.XX the meet -- hexane needs customer QX, expanded aromatics prime to Advanced quarter gallon product was for due certain margins to from Advanced Reformer per prime and to to feed. second feed expanded higher $X.XX producing the $X.XX lower products In utilizing more versus gallon per Reformer diverted may that as

Prime from lower in third XXXX compared margins feedstock to quarter the costs the second of benefited quarter.

X Slide declined in benchmark As per the quarter gasoline to in natural in $X.XX second $X.X gallon per pricing gallon the see the you presentation, third quarter. from earnings our from can

fuel feedstock costs, operating cash to lower to benefited lower gas labor addition from due and In lower costs lower we costs. costs

in $X.X Moving of which on negative adjusted Trecora had The based Waxes. $X.X Specialty is XXXX. facility in Specialty second operations continuing or at Chemical our to to Wax EBITDA from million million the compared Pasadena, TC third segment, of Texas quarter quarter

poorly driven wax feed feed ran decline suppliers. in third was The significant wax Two suppliers EBITDA in by the reduced quarter. from

U.S. as of on polyethylene byproducts Coast. polyethylene is facilities feed major producer production a produced based at wax certain Our Gulf the on result

XX declined volumes to the the X.X in quarter. sales third Wax X.X million million quarter second pounds million pounds from in pounds

second and Third wax quarter quarter of by supply. supply. disruptions our sequentially sales from wax in quarter. constrained the XX.X% sales Wax Customer by sales the was strong revenues decrease feed demand third wax were limited remained feed

the revenues processing were for were Custom hydrogenation/distillation the the relatively $X.X operation. second of negligible TC quarter quarter lack third million. at from due unchanged at the to from unit Revenues

the Now Quarles Pat turn call back on to for I'll views XXXX. over some

Pat Quarles

Thanks, Sami.

seen map more the like year. our year, remain Q&A, have to XXXX. strategy deliver I same. the this the believe will improvements has into road we've We provided in get a to Critically, we we just the Before about make comments to and few it coming

our our improve. commitment with hydrogenation the improved and improving safety expect processing delivery customer and revenues reliability, unit to We as wax operations

We productivity driving meaningfully approach our reduce disciplined and feedstock expect our costs. to of Silsbee logistics

of projects provides build typically fees the will our works. work we into We continuous renegotiated of a the begin plants processing benefit pipeline that other custom the I the small building growth self-funding also a opportunities mentioned within returns. improvement becomes that quick Commercially, of projects in and get and will provide facility. These scope of a

towards reduction and value transaction, of creation. on goal opportunities. a the while capital of this further With transaction, shareholder be the focus asset, our impending realizing to close having businesses deploy growth Trecora improvement have we debt achieving Post will monetizing will the our operating of singular AMAK targets, future

Thank I the Q&A. now to you. like operator to the for ask open call

Operator

from first Tanwanteng CJS Jon Our is Instructions] Securities. [Operator from question

Peter Lukas

It's Pete Lukas for John.

got the you biggest where EBITDA it mentioned your your You go sources left months you're really, over tracking of what year or upside but And the just we've year? behind in in the now for in be us? XX prepared could remarks, outlook downside if that would

Pat Quarles

of we When Sure. trending the range. Yes. towards last we we're end high about talked spoke, the

As the that built fourth that was kind normal expectation. we of were get into the into seasonality expecting and quarter, we

earlier Silsbee should come as site little severe I to a -- week, Although, had listen, that storm everybody's a we understanding. through last bit I talk for mentioned about and

the the a tornado. it wind Society Meteorological and was effectively identify tornado, equivalent it the water While impact didn't at effectively as a to from site

plants, communities, in trees and our down You can up see of has lost it resulted forth. It cleaned through so in roofs, which neighboring evidence did of loss some lots it X through and the the secondary our impact now. of containment, containment tanks X in been feed

the contractual that as able our It's But commitments, meet demand result, requirements. force meet were did we ensure running down. today. to off pushed majeure a some but But back contractual didn't our that to up we unit brought have -- declare we customers' a we and all of and

we So some demand. pushed

some of fourth that into first quarter. We quarter and the get it the to be back pushed of is to in some expect likely

we incurred some remediation damage of with then we'll that the incurred. the have And costs

we'll does that million continue we a on tangible uncertainty. the we're some And the it's so. us magnitude $X should the on don't that put numbers probably yet If recovery really don't site, at were good So so stage in give what around have have we work But or it, it number throughout round quarter. -- be. I to still to

area the really greatest that's see So right we of now. downside

see the steady, typical demand now. Otherwise, downside is seasonal area really has accommodating for the of that's side been business So profile. greatest we right steady,

Peter Lukas

update tracking next you so? as Gulf large you in the in had planned? And on online year projects these the us or the can And are previously polyethylene Great. the for timeline coming

Pat Quarles

you what portions flag units of year. ground, this ran But those these benefit it X had on depends we poke initiation. We right? But Well, the their from essentially, your all the during -- in date throughout start projects during of XXXX. year late up the sales what, saw,

We fill those also XXXX. during of volumes had first benefit for plants the

full next we're some that have startups because expect see for to kind new No for benefit new anticipating of those you'll plants. We year of the growth year. demand the

So our plants the on be really growth operation full year will this year. new based of

asset in U.S. up is think I major Shell XXXX. Pennsylvania, next that the which into the is comes

Operator

from Our FBR. Sherbetchyan Riley is Sarkis next from B. question

now Your open. line is

Sarkis Sherbetchyan

So the touch just business. want on to wax first

supply? sources So wax are you evaluating feed alternative for

Pat Quarles

We're as principally market. set been And say third initial waxes. of throughout down customers. We stage down of are. about that great year new kind a then right, Primarily their we've talking I'd product we translate The our talked to about, started of we've waxes it of into end-use to upgrading reception having a customers adhesive going the last purchasing introducing from qualifications. late and is path progress of produced base. kind We're hot-melt the the blended This and second, year. customer on-purpose

a All expect we through them buy. of continue that by to the year. them from profile, end continued to Really of all the more be qualification demand

would will been be step well opportunities. our has I greatest the as growth our supply guess support say of I diversify to that continuity of that kind base as feed both to and So

Sarkis Sherbetchyan

Good. further. And touching on that

break So to additional it perspective, year? you? expect second be ASPs by evaluations, the that or richer end of What and Would Can you be you third right? of stage Would from the kind ASP down? similar? either it volumes right, help would us

Pat Quarles

Sure.

So as our I've a than before, higher supply. cost feed this so is recognize base byproduct that said feed

points, say as will better. integrate These we margin higher be we better significantly start, it. are diluting into our but wouldn't price they're So this we feed as I

anticipate -- as expect as further for getting sales, value be you margin we new then starting we established So we're with established the have pretty overtime certainly think the that contribution And these good over products the but able would is get don't the we're and drive years performance the become profile I capture to better we would compelling really products. to with.

Sarkis Sherbetchyan

Good.

forward to Looking those updates.

comes question a match -- you as assets at TC as both capabilities TC had kind back bringing whole. assets the on the right what the that new Where built? and Next evaluating of as and are to of to were projects kind really guys in well the you bought

Pat Quarles

of Sure. a we today, encouraged quarter. before. we're we third the the the quarter. place the really we should behind. of by leader we middle -- quarter, right? but as tangible been the we've here have second And kind know behind, the answer finally by changes beginning at a changed We to of that site we're He and internally, some least to site Well, the And of team got starting in are where been there. reorganization candid the tangible exited third of is see driving kind new leadership I'm benefits

if quarter, confidence not of just the I both spoke introduced tell sites the you hydrogenation plan But reflect good improvement we Dick last on back did changes we at summer, those good So I of team, to. that now. at leadership to running by this new with Silsbee, development had we in TC. in as product -- uptake had are you -- really can support that we exited increasing we the the

project profile the now and up We good quality results, supply be a beginning here custom that processing qualifying to of our quarter. expect fourth to also of see the with we the in for stepped product very that

up a posted can big to fourth building step business. at destiny now that And numbers to we that results. a can't start But you the track control numbers, record TC in the third to out listen, the and more our starting demonstrate in think the in we're expect on see haven't quarter. expecting I'm I -- of track that get quarter I So You right? but we tell finally

nature now South of not the change on But South we're It the as at It's we assets I'm just as Hampton. confidence won't quickly in come business Hampton. having the of as to turn path quickly as to the improvement. the did increasing finally

Sarkis Sherbetchyan

And queue. in the TCI we're update forward in to looking Great. hop more on back Thanks for some the update. I'll future. the

Operator

Thank you. from Reagor question Instructions] Capital [Operator Joseph Partners. is Our ROTH next from

now is open. line Your

Joseph Reagor

question. the thanks for taking Hi,

-- thinking obviously I So here. you mean took how back over

a of bonuses? did you you Are quality guys review more cut some retain employees? you're staff, you right, made tough thinking on incentivize doing on some What anything guys term, both long safety operations, You are right? like Like got incentive that doing the your went that doing, is through, to to decisions. how directions, end there because now term long

Pat Quarles

And it right. the those be we then tell on I on, transparent be there's can really can have culture and there success a to Joe. of important and participate outcomes. critical entire what's That's and candidly, lot you that some with achieving we difficult. rewards that understanding It's is to with going all organization me aligned kind in -- involved that, the our of and change

depending you on And where that a a can from be in sit perspective. legacy different the thing Company

are moving seeking towards an and those results. together, we're all our that Company performance, So we view of kind on integrated alignment the for of outcomes rewarding then

-- So overnight. I direction. that. We appreciate in changes starting something not to move that's think But but we're that that

Joseph Reagor

weeds going to kind and in you this around? performance safety you the Okay. you turning into this a do going that get we're of said type we forward, are think that demonstrates gets future? moving issues. more of the know bit how of of little I no But down get that more statistics quarter industrial to Perhaps had statistics you're

Pat Quarles

to we So which the are year often typically, safety injury total Hampton probably rate, side. is the at for a looks at good the as for you occupational industry benchmark year. incident one TRIR, as This South free recordable know, least

brings TRIR, a to running X woman really really due there and man the Hampton. job we're focus every at the and that and South excellent, attention to So which is

behavior what culture It the that was incidents these always to of finger and the to occurred, as clearly cause analysis was set. find But TC. you accident trying root early quarter a with We a do, you is consistent I'm had we an when second the do, in result cut. at was that how not

that. about lot from learning's So We share the we a talk that.

an injury since. had haven't We

of TC our one with plant, X. nature just at below I scale the the something incident the is TRIR Just believe of

we our for there like be need companies So of to and striving be We running average. industry That's at size, about should perfection. X.XX. certainly kind at least

we improvements occupational on to So have some do side. the

I -- certainly occupational beyond we'll happened that we want talk that's lot. metrics about here, adds core to probably to to. candidly, may sure that not that that think a about beyond events impact talk be our incidents continue go getting value, metric it I'm that We that, the but speaking the

Joseph Reagor

Okay. And kinds then plant availability things or what other coverage, about things? those of overhead like

Pat Quarles

are publishing great management metrics. Yes, those that those all metrics, but of as the things I course, doubt look are, internally. be we investments at we'll Those

where talk have we you performance we're strategy I on that our our the execution, right? If things our around are EHS of think commitments metrics set And culture to performance outlined about our we're we commercially doing driving against about towards. what track and we what for those at monitor We and adoption business. earlier, our are those all striving really it's the develop productivity our of look -- internal So safety the expectations clear we further we are then routinely. and

Joseph Reagor

your What to it about I We haven't kind but what this go take really on. Okay. they when it on just been gears have decide it weighs to bit you year? they best seen there's competitor. Then can of get when to know the pricing. Historically, there much, and pricing talked there competitive South for the out one quite like they Hampton. comes haven't switching Obviously, landscape main actor to a

Pat Quarles

to Yes, little different have view. tend a I probably

don't sophisticated that a motive. irrational. also competitor is think being a competitor them I as view our I has profit

compete we each perniciously. I in meet the market and aggressively and think we other

like, try thoughtful Sometimes about of time them sure very to done they we've on same thoughtful time. more confident get I'm well. But I'm be to pretty we development we the as how for and aggressive the that from they're business, don't and things push to we our

Joseph Reagor

then one one. Okay. last And

big seasonality? either XXXX than be downtime Just half? to coming upgrades impact quarter of any Are others? that should the guys one at in going first we beyond changes is things there Or aware in or you a Anything plan normal or picture. more already the that are plants to starting the about

Pat Quarles

right that and that's I in from don't of the of a is a -- that and maintenance mode care But specific talked of we our I been think of now. we've hard tell ourselves to a what reactive have before. assets. plant working you company taking We're our guidance in transition terms will

a process. much, more transition plant over That last that maintenance. this by that And our quarter at we our well, all about has saw even that the were able candidly, way in $XXX,XXX maintenance to -- I advance. frankly saved planned past. to third planning routine it work of we year, essentially this efficient. process in makes much, major in the weren't of beyond maintenance turnarounds talked were the to year because us second terms that in the Dick the we also doing in You introduced that year And you much alone quarter over transitioning

two We with in how have for conversation having that XXXX. our be in that's the plans year. next amount a approaching We'll weeks. So do scope fair we're of Board

have So year for declare customers of that do to appropriately next a me scope that be and to of planning those we'll But it's doing. fair we what we exactly need be supplied for a amount course ensuring we'll keep premature during our little outages.

Operator

question from McCoy from next is Endowment. Sean Our Hallisey

is now line Your open.

Sean Hallisey

what a I X-part the plants to question. all rates to Congrats see production had as wondering AMAK. And kind of compared you the of that when rate South and of Hampton expect like for what one monetization optimal look to the I reach capacity? you'd kind was just utilization on rate?

Pat Quarles

Sure.

future capacity like to by a competitor So ample operating an classic rates commodity. we business to a that asset capacity don't our has we has of as ample future meet Frankly, believe growth. We think growth. business driven this meet have anticipated

the we variety into of purity range export for to great it that bring the competing provides depending value So about way for where of you a our product value and more if to to us, our on a a there's uses. of volumes our down supply go netback that end terms we all tend chain from go customers. of think in And polyethylene, the

tend a think to perspective. rate than we from it an proposition of from value operating So

Operator

Our from Management. next question is Tieton from Matt Dhane Capital

now is line Your open.

Matt Dhane

high some comments. projects hoping the was some the you of mentioned color capital there I return of tail around could add towards end that the you prepared

significant to bit being? at? this would detail Just hoping little pipeline more looking could there up a some additional a helpful. How Just what end you're be color get

Pat Quarles

Sure, Matt.

large can in So as it's returns. the focusing should plants on company very be we returns. is expense This how to of be on fairly that at all projects hits that that high there's has of in focused this terms know, and for be -- in projects -- done projects small done last always been quick -- the typical the operating have quick have years, several and

-- I So and think think I Dick and

the I to projects. these portfolio that page. are nice a there's able a -- of be We're pretty and we'll optimistic on same develop nice

have should why XXXX. couple relatively -- identified during Those start will clear a they're in executing small. quick be their we'll building probably things that be We XXXX. XXXX to in And be returns contribution

their the It's that are roles we're productivity things working or or of the type through your -- improve and mean and more system organization recognize And support But on. execution these to day-to-day organization can you plant. in make on of way to with that's a the like little of of operating we integration recapturing your thing like set the the continue drive because the up. capital, losses bit are just basics tanks that the engineering of things I your steam energy efficient

got we're or more now right get. that on confident. But big of time I I going million than getting over so fall is we've I'm can't think tell you It's of established. contribution to to the front-end -- going be that how $X

Matt Dhane

is I for products. Also a discuss focus much utilize polyethylene that opportunities be some you and/or In past, an if helpful on That's export export to there other places out today? on would here What too. Just curious. discussions want the How front color the things are seeing that on there helpful. prime could capacity and products. and 'XX was prime your I opportunity beyond? building the was to real different were about

Pat Quarles

Sure.

way the includes export recognize to sands. report got we oil you So

fairly would to what able it's our So volume. we've to numbers. ex-Canada fairly market hard generally oil the consistent But in while is maintain sands say seen a decline I been see in consistent export we've export

which really that differentiated on we tells in mix improved the you world has our So really strengths places of finding that our value the as is focused that are, those what our quality product.

selling So even plants, that's occasionally plants, Asia -- the polyethylene China much, much difficult. into oh, Middle East more polyethylene Southeast

world we've so the there. good continues rest had of to And And the success grow.

that that we or we're over identified Asia we're guys in in to new are with have there So will to we hopeful times. sales relationships that building projects plan participate Southeast those

high an the see I So of it our we as do and not of stay the cost plans chain direction. think supply our and we a value of in virtue growth important the it will goes component piece end in right us, it's is by It for of future but there.

Operator

to over turn questions. remarks. Pat call this time, the for no Quarles showing like At to I back am would I further closing

Pat Quarles

Gigi. you, Thank

this to in everyone. whose past help for so dedication want our and the women Silsbee Thank of had to week the week's our like interest to this been impacts of the just of progress last and in I'd return also who to storm on men you the today. mitigate thank contributed have evident operation. and company Trecora year, especially I and participating those thank So to call all you, your plant

Operator

participating. today's Ladies and concludes gentlemen, call. this Thank conference for you

You may now disconnect.

Trecora Resources (TREC) 9 Nov 192019 Q3 Earnings call transcript