DELAWARE
|
75-1256622
|
(State or other jurisdiction of
|
(I.R.S. employer incorporation or
|
organization)
|
identification no.)
|
1650 Hwy 6 South, Suite 190
|
77478
|
Sugar Land, Texas
|
(Zip code)
|
(Address of principal executive offices)
|
|
||
|
||
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
20
|
||
31
|
||
31
|
||
|
||
32
|
||
32
|
||
32
|
SEPTEMBER 30,
2017
(unaudited)
|
DECEMBER 31,
2016
|
|||||||
ASSETS
|
(thousands of dollars)
|
|||||||
Current Assets
|
||||||||
Cash
|
$
|
4,219
|
$
|
8,389
|
||||
Trade receivables, net
|
22,738
|
22,193
|
||||||
Inventories
|
12,849
|
17,871
|
||||||
Prepaid expenses and other assets
|
3,276
|
3,511
|
||||||
Taxes receivable
|
3,764
|
3,983
|
||||||
Total current assets
|
46,846
|
55,947
|
||||||
Plant, pipeline and equipment
, net
|
172,048
|
140,009
|
||||||
Goodwill
|
21,798
|
21,798
|
||||||
Intangible assets, net
|
21,273
|
22,669
|
||||||
Investment in AMAK
|
44,225
|
49,386
|
||||||
Mineral properties in the United States
|
588
|
588
|
||||||
Other assets
|
21
|
87
|
||||||
TOTAL ASSETS
|
$
|
306,799
|
$
|
290,484
|
||||
LIABILITIES
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
12,381
|
$
|
13,306
|
||||
Current portion of derivative instruments
|
7
|
58
|
||||||
Accrued liabilities
|
6,304
|
2,017
|
||||||
Current portion of post-retirement benefit
|
308
|
316
|
||||||
Current portion of long-term debt
|
8,061
|
10,145
|
||||||
Current portion of other liabilities
|
1,131
|
870
|
||||||
Total current liabilities
|
28,192
|
26,712
|
||||||
Long-term debt
, net of current portion
|
81,011
|
73,107
|
||||||
Post-retirement benefit,
net of current portion
|
897
|
897
|
||||||
Other liabilities,
net of current portion
|
1,681
|
2,309
|
||||||
Deferred income taxes
|
24,654
|
23,083
|
||||||
Total liabilities
|
136,435
|
126,108
|
||||||
EQUITY
|
||||||||
Common stock
‑authorized 40 million shares of $.10 par value; issued 24.5 million in 2017 and 2016 and outstanding 24.3 million and 24.2 million shares in 2017 and 2016, respectively
|
2,451
|
2,451
|
||||||
Additional paid-in capital
|
55,344
|
53,474
|
||||||
Common stock in treasury, at cost
|
(203
|
)
|
(284
|
)
|
||||
Retained earnings
|
112,483
|
108,446
|
||||||
Total Trecora Resources Stockholders' Equity
|
170,075
|
164,087
|
||||||
Noncontrolling Interest
|
289
|
289
|
||||||
Total equity
|
170,364
|
164,376
|
||||||
TOTAL LIABILITIES AND EQUITY
|
$
|
306,799
|
$
|
290,484
|
THREE MONTHS ENDED
|
NINE MONTHS
ENDED
|
|||||||||||||||
SEPTEMBER 30,
|
SEPTEMBER 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
REVENUES
|
||||||||||||||||
Petrochemical and Product Sales
|
$
|
58,030
|
$
|
52,115
|
$
|
165,945
|
$
|
143,662
|
||||||||
Processing Fees
|
3,478
|
5,027
|
13,220
|
14,534
|
||||||||||||
61,508
|
57,142
|
179,165
|
158,196
|
|||||||||||||
OPERATING COSTS AND EXPENSES
|
||||||||||||||||
Cost of Sales and Processing
|
||||||||||||||||
(including depreciation and amortization of $2,565, $2,373, $7,311, and $6,620, respectively)
|
51,638
|
48,237
|
147,570
|
125,946
|
||||||||||||
GROSS PROFIT
|
9,870
|
8,905
|
31,595
|
32,250
|
||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||||||||||
General and Administrative
|
5,660
|
4,585
|
17,621
|
15,525
|
||||||||||||
Depreciation
|
245
|
192
|
655
|
556
|
||||||||||||
5,905
|
4,777
|
18,276
|
16,081
|
|||||||||||||
OPERATING INCOME
|
3,965
|
4,128
|
13,319
|
16,169
|
||||||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||||||
Interest Expense
|
(795
|
)
|
(568
|
)
|
(2,109
|
)
|
(1,803
|
)
|
||||||||
Bargain purchase gain from acquisition
|
--
|
--
|
--
|
11,549
|
||||||||||||
Equity in Earnings (Losses) of AMAK
|
(897
|
)
|
(2,089
|
)
|
(5,161
|
)
|
2,261
|
|||||||||
Gain from Additional Equity Issuance by AMAK
|
--
|
3,168
|
--
|
3,168
|
||||||||||||
Miscellaneous Income (Expense)
|
22
|
(72
|
)
|
(42
|
)
|
38
|
||||||||||
(1,670
|
)
|
439
|
(7,312
|
)
|
15,213
|
|||||||||||
INCOME BEFORE INCOME TAXES
|
2,295
|
4,567
|
6,007
|
31,382
|
||||||||||||
INCOME TAXES
|
577
|
1,768
|
1,970
|
11,107
|
||||||||||||
NET INCOME
|
1,718
|
2,799
|
4,037
|
20,275
|
||||||||||||
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
--
|
--
|
--
|
--
|
||||||||||||
NET INCOME ATTRIBUTABLE TO TRECORA RESOURCES
|
$
|
1,718
|
$
|
2,799
|
$
|
4,037
|
$
|
20,275
|
||||||||
Basic Earnings per Common Share
|
||||||||||||||||
Net Income Attributable to Trecora Resources (dollars)
|
$
|
0.07
|
$
|
0.12
|
$
|
0.17
|
$
|
0.83
|
||||||||
Basic Weighted Average Number of Common Shares Outstanding
|
24,304
|
24,223
|
24,267
|
24,304
|
||||||||||||
Diluted Earnings per Common Share
|
||||||||||||||||
Net Income Attributable to Trecora Resources (dollars)
|
$
|
0.07
|
$
|
0.11
|
$
|
0.16
|
$
|
0.81
|
||||||||
Diluted Weighted Average Number of Common Shares Outstanding
|
25,157
|
24,921
|
25,082
|
24,964
|
TRECORA RESOURCES STOCKHOLDERS
|
||||||||||||||||||||||||||||||||
COMMON STOCK
|
ADDITIONAL
PAID-IN
|
TREASURY
|
RETAINED
|
NON-
CONTROLLING
|
TOTAL
|
|||||||||||||||||||||||||||
SHARES
|
AMOUNT
|
CAPITAL
|
STOCK
|
EARNINGS
|
TOTAL
|
INTEREST
|
EQUITY
|
|||||||||||||||||||||||||
(thousands)
|
(thousands of dollars)
|
|||||||||||||||||||||||||||||||
JANUARY 1, 2017
|
24,222
|
$
|
2,451
|
$
|
53,474
|
$
|
(284
|
)
|
$
|
108,446
|
$
|
164,087
|
$
|
289
|
$
|
164,376
|
||||||||||||||||
Stock options
|
||||||||||||||||||||||||||||||||
Issued to Directors
|
-
|
-
|
90
|
-
|
-
|
90
|
-
|
90
|
||||||||||||||||||||||||
Issued to Employees
|
-
|
-
|
884
|
-
|
-
|
884
|
-
|
884
|
||||||||||||||||||||||||
Restricted Common Stock
|
||||||||||||||||||||||||||||||||
Issued to Directors
|
-
|
-
|
230
|
-
|
-
|
230
|
-
|
230
|
||||||||||||||||||||||||
Issued to Employees
|
-
|
-
|
801
|
-
|
-
|
801
|
-
|
801
|
||||||||||||||||||||||||
Common stock
|
||||||||||||||||||||||||||||||||
Issued to Directors
|
25
|
-
|
(79
|
)
|
25
|
-
|
(54
|
)
|
-
|
(54
|
)
|
|||||||||||||||||||||
Issued to Employees
|
56
|
-
|
(56
|
)
|
56
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
4,037
|
4,037
|
-
|
4,037
|
||||||||||||||||||||||||
September 30, 2017
|
24,303
|
$
|
2,451
|
$
|
55,344
|
$
|
(203
|
)
|
$
|
112,483
|
$
|
170,075
|
$
|
289
|
$
|
170,364
|
NINE MONTHS ENDED
|
||||||||
SEPTEMBER 30,
|
||||||||
2017
|
2016
|
|||||||
(thousands of dollars)
|
||||||||
OPERATING ACTIVITIES
|
||||||||
Net Income
|
$
|
4,037
|
$
|
20,275
|
||||
Adjustments to Reconcile Net Income
|
||||||||
To Net Cash Provided by Operating Activities:
|
||||||||
Depreciation
|
6,570
|
5,761
|
||||||
Amortization of Intangible Assets
|
1,396
|
1,415
|
||||||
Unrealized Gain on Derivative Instruments
|
(51
|
)
|
(89
|
)
|
||||
Share-based Compensation
|
2,005
|
1,882
|
||||||
Deferred Income Taxes
|
1,571
|
6,851
|
||||||
Postretirement Obligation
|
(8
|
)
|
186
|
|||||
Bargain purchase gain
|
-
|
(11,549
|
)
|
|||||
Equity in (earnings) losses of AMAK
|
5,161
|
(2,261
|
)
|
|||||
Gain from Additional Equity Issuance by AMAK
|
-
|
(3,168
|
)
|
|||||
Amortization of loan fees
|
154
|
213
|
||||||
Changes in Operating Assets and Liabilities:
|
||||||||
Increase in Trade Receivables
|
(545
|
)
|
(355
|
)
|
||||
Decrease in Taxes Receivable
|
218
|
4,094
|
||||||
(Increase) Decrease in Inventories
|
5,022
|
(2,573
|
)
|
|||||
(Increase) Decrease in Prepaid Expenses and Other Assets
|
387
|
(1,494
|
)
|
|||||
Increase in Accounts Payable and Accrued Liabilities
|
3,356
|
1,304
|
||||||
Increase (Decrease) in Other Liabilities
|
281
|
(418
|
)
|
|||||
Net Cash Provided by Operating Activities
|
29,554
|
20,074
|
||||||
INVESTING ACTIVITIES
|
||||||||
Additions to Plant, Pipeline and Equipment
|
(39,250
|
)
|
(25,860
|
)
|
||||
Cash paid for acquisition of BASF facility
|
-
|
(2,011
|
)
|
|||||
Advances to AMAK, net
|
(86
|
)
|
-
|
|||||
Cash Used in Investing Activities
|
(39,336
|
)
|
(27,871
|
)
|
||||
FINANCING ACTIVITIES
|
||||||||
Issuance of Common Stock
|
25
|
11
|
||||||
Payments related to tax withholding for stock-based compensation
|
(80
|
)
|
-
|
|||||
Addition to Long-Term Debt
|
14,000
|
3,000
|
||||||
Repayment of Long-Term Debt
|
(8,333
|
)
|
(6,250
|
)
|
||||
Net Cash Provided by (Used in) Financing Activities
|
5,612
|
(3,239
|
)
|
|||||
NET DECREASE IN CASH
|
(4,170
|
)
|
(11,036
|
)
|
||||
CASH AT BEGINNING OF PERIOD
|
8,389
|
18,623
|
||||||
CASH AND AT END OF PERIOD
|
$
|
4,219
|
$
|
7,587
|
(1)
|
TREC – Trecora Resources
|
(2)
|
TOCCO – Texas Oil & Chemical Co. II, Inc. – Wholly owned subsidiary of TREC and parent of SHR and TC
|
(3)
|
SHR – South Hampton Resources, Inc. – Petrochemical segment and parent of GSPL
|
(4)
|
GSPL – Gulf State Pipe Line Co, Inc. – Pipeline support for the petrochemical segment
|
(5)
|
TC – Trecora Chemical, Inc. – Specialty wax segment
|
(6)
|
AMAK – Al Masane Al Kobra Mining Company – Mining equity investment – 33% ownership
|
(7)
|
PEVM – Pioche Ely Valley Mines, Inc. – Inactive mine - 55% ownership
|
As Originally
Reported
|
As Retrospectively
Adjusted
|
|||||||
(in thousands)
|
||||||||
Deferred income tax asset, current
|
$
|
1,615
|
$
|
-
|
||||
Total current assets
|
57,562
|
55,947
|
||||||
Total assets
|
292,099
|
290,484
|
||||||
Deferred income tax liability, noncurrent
|
24,698
|
23,083
|
||||||
Total liabilities
|
127,723
|
126,108
|
||||||
Total liabilities and equity
|
292,099
|
290,484
|
September 30, 2017
|
December 31, 2016
|
|||||||
(thousands of dollars)
|
||||||||
Trade receivables
|
$
|
23,038
|
$
|
22,493
|
||||
Less allowance for doubtful accounts
|
(300
|
)
|
(300
|
)
|
||||
Trade receivables, net
|
$
|
22,738
|
$
|
22,193
|
September 30, 2017
|
December 31, 2016
|
|||||||
(thousands of dollars)
|
||||||||
Prepaid license
|
$
|
1,919
|
$
|
1,919
|
||||
Prepaid catalyst
|
55
|
187
|
||||||
Prepaid insurance
|
255
|
797
|
||||||
Other prepaid expenses and assets
|
1,047
|
608
|
||||||
Total
|
$
|
3,276
|
$
|
3,511
|
September 30, 2017
|
December 31, 2016
|
|||||||
(thousands of dollars)
|
||||||||
Raw material
|
$
|
2,390
|
$
|
3,627
|
||||
Work in process
|
66
|
12
|
||||||
Finished products
|
9,960
|
14,232
|
||||||
Spare parts
|
433
|
-
|
||||||
Total inventory
|
$
|
12,849
|
$
|
17,871
|
September 30, 2017
|
December 31, 2016
|
|||||||
(thousands of dollars)
|
||||||||
Platinum catalyst metal
|
$
|
1,612
|
$
|
1,612
|
||||
Land
|
5,428
|
5,376
|
||||||
Plant, pipeline and equipment
|
183,472
|
154,107
|
||||||
Construction in progress
|
42,930
|
33,391
|
||||||
Total plant, pipeline and equipment
|
233,442
|
194,486
|
||||||
Less accumulated depreciation
|
(61,394
|
)
|
(54,477
|
)
|
||||
Net plant, pipeline and equipment
|
$
|
172,048
|
$
|
140,009
|
September 30, 2017
|
||||||||||||
Intangible assets subject to amortization
(Definite-lived)
|
Gross
|
Accumulated
Amortization
|
Net
|
|||||||||
Customer relationships
|
$
|
16,852
|
$
|
(3,370
|
)
|
$
|
13,482
|
|||||
Non-compete agreements
|
94
|
(57
|
)
|
37
|
||||||||
Licenses and permits
|
1,471
|
(364
|
)
|
1,107
|
||||||||
Developed technology
|
6,131
|
(1,839
|
)
|
4,292
|
||||||||
24,548
|
(5,630
|
)
|
18,918
|
|||||||||
Intangible assets not subject to amortization
(Indefinite-lived)
|
||||||||||||
Emissions Allowance
|
197
|
-
|
197
|
|||||||||
Trade name
|
2,158
|
-
|
2,158
|
|||||||||
Total
|
$
|
26,903
|
$
|
(5,630
|
)
|
$
|
21,273
|
December 31, 2016
|
||||||||||||
Intangible assets subject to amortization
(Definite-lived)
|
Gross
|
Accumulated
Amortization
|
Net
|
|||||||||
Customer relationships
|
$
|
16,852
|
$
|
(2,527
|
)
|
$
|
14,325
|
|||||
Non-compete agreements
|
94
|
(43
|
)
|
51
|
||||||||
Licenses and permits
|
1,471
|
(285
|
)
|
1,186
|
||||||||
Developed technology
|
6,131
|
(1,379
|
)
|
4,752
|
||||||||
24,548
|
(4,234
|
)
|
20,314
|
|||||||||
Intangible assets not subject to amortization
(Indefinite-lived)
|
||||||||||||
Emissions Allowance
|
197
|
-
|
197
|
|||||||||
Trade name
|
2,158
|
-
|
2,158
|
|||||||||
Total
|
$
|
26,903
|
$
|
(4,234
|
)
|
$
|
22,669
|
Remainder of
2017
|
2018
|
2019
|
2020
|
2021
|
Thereafter
|
|||||||||||||||||||
Customer relationships
|
$
|
282
|
$
|
1,123
|
$
|
1,123
|
$
|
1,123
|
1,123
|
$
|
8,710
|
|||||||||||||
Non-compete agreements
|
5
|
19
|
12
|
-
|
-
|
-
|
||||||||||||||||||
Licenses and permits
|
26
|
106
|
106
|
106
|
106
|
656
|
||||||||||||||||||
Developed technology
|
153
|
613
|
613
|
613
|
613
|
1,687
|
||||||||||||||||||
Total future amortization expense
|
$
|
466
|
$
|
1,861
|
$
|
1,854
|
$
|
1,842
|
$
|
1,842
|
$
|
11,053
|
Three Months Ended
September 30, 2017
|
Three Months Ended
September 30, 2016
|
|||||||||||||||||||||||
Per Share
|
Per Share
|
|||||||||||||||||||||||
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
|||||||||||||||||||
Basic Net Income per Share:
|
||||||||||||||||||||||||
Net Income Attributable to Trecora Resources
|
$
|
1,718
|
24,304
|
$
|
0.07
|
$
|
2,799
|
24,223
|
$
|
0.12
|
||||||||||||||
Unvested restricted stock grant
|
379
|
304
|
||||||||||||||||||||||
Dilutive stock options outstanding
|
474
|
394
|
||||||||||||||||||||||
Diluted Net Income per Share:
|
||||||||||||||||||||||||
Net Income Attributable to Trecora Resources
|
$
|
1,718
|
25,157
|
$
|
0.07
|
$
|
2,799
|
24,921
|
$
|
0.11
|
Nine Months Ended
September 30, 2017
|
Nine Months Ended
September 30, 2016
|
|||||||||||||||||||||||
Per Share
|
Per Share
|
|||||||||||||||||||||||
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
|||||||||||||||||||
Basic Net Income per Share:
|
||||||||||||||||||||||||
Net Income Attributable to Trecora Resources
|
$
|
4,037
|
24,267
|
$
|
0.17
|
$
|
20,275
|
24,304
|
$
|
0.83
|
||||||||||||||
Unvested restricted stock grant
|
360
|
297
|
||||||||||||||||||||||
Dilutive stock options outstanding
|
455
|
363
|
||||||||||||||||||||||
Diluted Net Income per Share:
|
||||||||||||||||||||||||
Net Income Attributable to Trecora Resources
|
$
|
4,037
|
25,082
|
$
|
0.16
|
$
|
20,275
|
24,964
|
$
|
0.81
|
September 30, 2017
|
December 31, 2016
|
|||||||
(thousands of dollars)
|
||||||||
Accrued property taxes
|
$
|
2,188
|
$
|
-
|
||||
Accrued payroll
|
1,563
|
1,097
|
||||||
Accrued officer compensation
|
900
|
-
|
||||||
Accrued shortfall fees
|
586
|
-
|
||||||
Other
|
1,067
|
920
|
||||||
Total
|
$
|
6,304
|
$
|
2,017
|
For Fiscal Quarter Ending
|
Maximum Consolidated Leverage Ratio
|
March 31, 2017
|
4.00 to 1.00
|
June 30, 2017
|
4.25 to 1.00
|
September 30, 2017
|
3.75 to 1.00
|
December 31, 2017
|
3.50 to 1.00
|
March 31, 2018 and each fiscal quarter thereafter
|
3.25 to 1.00
|
For Fiscal Quarter Ending
|
Minimum Consolidated Fixed Charge Coverage Ratio
|
March 31, 2017
|
1.10 to 1.00
|
June 30, 2017
|
1.05 to 1.00
|
September 30, 2017
|
1.05 to 1.00
|
December 31, 2017
|
1.10 to 1.00
|
March 31, 2018 and each fiscal quarter thereafter
|
1.25 to 1.00
|
Level
|
Consolidated Leverage Ratio
|
LIBOR Margin
|
Base Rate Margin
|
Commitment Fee
|
1
|
Less than 1.50 to 1.00
|
2.00%
|
1.00%
|
0.25%
|
2
|
Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00
|
2.25%
|
1.25%
|
0.25%
|
3
|
Greater than or equal to 2.00 to 1.00 but less than 3.00 to 1.00
|
2.50%
|
1.50%
|
0.375%
|
4
|
Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00
|
2.75%
|
1.75%
|
0.375%
|
5
|
Greater than or equal to 3.50 to 1.00
|
3.00%
|
2.00%
|
0.375%
|
September 30, 2017
|
December 31, 2016
|
|||||||
Acquisition loan
|
$
|
49,000
|
$
|
56,000
|
||||
Term loan
|
17,666
|
19,000
|
||||||
Revolving facility
|
23,000
|
9,000
|
||||||
Total
|
89,666
|
84,000
|
||||||
Less debt issuance costs
|
594
|
748
|
||||||
Carrying balance of debt
|
$
|
89,072
|
$
|
83,252
|
Fair Value Measurements Using
|
||||||||||||||||
September 30, 2017
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Interest rate swap
|
$
|
7
|
-
|
$
|
7
|
-
|
Fair Value Measurements Using
|
||||||||||||||||
December 31, 2016
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Interest rate swap
|
$
|
58
|
-
|
$
|
58
|
-
|
September 30, 2017
|
December 31, 2016
|
|||||||
Fair value of interest rate swap - liability
|
$
|
7
|
$
|
58
|
Shares of Restricted
Stock Units
|
Weighted Average Grant Date Price per
Share
|
|||||||
Outstanding at January 1, 2017
|
350,891
|
$
|
11.44
|
|||||
Granted
|
127,281
|
$
|
11.40
|
|||||
Forfeited
|
(21,201
|
)
|
$
|
10.52
|
||||
Vested
|
(78,362
|
)
|
$
|
12.00
|
||||
Outstanding at September 30, 2017
|
378,608
|
$
|
11.37
|
Number of
Stock
Options & Warrants
|
Weighted Average Exercise Price per
Share
|
Weighted
Average
Remaining
Contractual
Life
|
||||||||||
Outstanding at January 1, 2017
|
1,348,437
|
$
|
7.79
|
|||||||||
Granted
|
--
|
--
|
||||||||||
Exercised
|
(14,350
|
)
|
2.90
|
|||||||||
Expired
|
--
|
--
|
||||||||||
Cancelled
|
--
|
--
|
||||||||||
Forfeited
|
--
|
--
|
||||||||||
Outstanding at September 30, 2017
|
1,334,087
|
$
|
7.84
|
4.5
|
||||||||
Exercisable at September 30, 2017
|
989,087
|
$
|
8.19
|
4.8
|
Three Months Ended September 30, 2017
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Product sales
|
$
|
52,440
|
$
|
5,590
|
$
|
-
|
$
|
58,030
|
||||||||
Processing fees
|
1,519
|
1,959
|
-
|
3,478
|
||||||||||||
Total revenues
|
53,959
|
7,549
|
-
|
61,508
|
||||||||||||
Operating profit (loss) before depreciation and amortization
|
9,319
|
(587
|
)
|
(1,957
|
)
|
6,775
|
||||||||||
Operating profit (loss)
|
7,735
|
(1,795
|
)
|
(1,975
|
)
|
3,965
|
||||||||||
Profit (loss) before taxes
|
7,149
|
(1,975
|
)
|
(2,879
|
)
|
2,295
|
||||||||||
Depreciation and amortization
|
1,584
|
1,208
|
18
|
2,810
|
||||||||||||
Capital expenditures
|
9,426
|
1,991
|
-
|
11,417
|
Nine Months Ended September 30, 2017
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Product sales
|
$
|
147,339
|
$
|
18,606
|
$
|
-
|
$
|
165,945
|
||||||||
Processing fees
|
5,078
|
8,142
|
-
|
13,220
|
||||||||||||
Total revenues
|
152,417
|
26,748
|
-
|
179,165
|
||||||||||||
Operating profit (loss) before depreciation and amortization
|
26,294
|
969
|
(5,978
|
)
|
21,285
|
|||||||||||
Operating profit (loss)
|
21,610
|
(2,264
|
)
|
(6,027
|
)
|
13,319
|
||||||||||
Profit (loss) before taxes
|
19,750
|
(2,534
|
)
|
(11,209
|
)
|
6,007
|
||||||||||
Depreciation and amortization
|
4,684
|
3,233
|
49
|
7,966
|
||||||||||||
Capital expenditures
|
27,203
|
12,047
|
-
|
39,250
|
Three Months Ended September 30, 2016
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Product sales
|
$
|
47,250
|
$
|
4,865
|
$
|
-
|
$
|
52,115
|
||||||||
Processing fees
|
2,909
|
2,118
|
-
|
5,027
|
||||||||||||
Total revenues
|
50,159
|
6,983
|
-
|
57,142
|
||||||||||||
Operating profit (loss) before depreciation and amortization
|
7,813
|
118
|
(1,238
|
)
|
6,693
|
|||||||||||
Operating profit (loss)
|
6,366
|
(987
|
)
|
(1,251
|
)
|
4,128
|
||||||||||
Profit (loss) before taxes
|
5,812
|
(1,063
|
)
|
(182
|
)
|
4,567
|
||||||||||
Depreciation and amortization
|
1,447
|
1,105
|
13
|
2,565
|
||||||||||||
Capital expenditures
|
5,411
|
4,066
|
-
|
9,477
|
Nine Months Ended September 30, 2016
|
||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Consolidated
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Product sales
|
$
|
129,076
|
$
|
14,585
|
$
|
-
|
$
|
143,661
|
||||||||
Processing fees
|
6,769
|
7,766
|
-
|
14,535
|
||||||||||||
Total revenues
|
135,845
|
22,351
|
-
|
158,196
|
||||||||||||
Operating profit (loss) before depreciation and amortization
|
25,699
|
2,774
|
(5,128
|
)
|
23,345
|
|||||||||||
Operating profit (loss)
|
21,488
|
(171
|
)
|
(5,148
|
)
|
16,169
|
||||||||||
Profit before taxes*
|
19,696
|
11,427
|
259
|
31,382
|
||||||||||||
Depreciation and amortization
|
4,211
|
2,945
|
20
|
7,176
|
||||||||||||
Capital expenditures
|
16,812
|
11,059
|
-
|
27,871
|
September 30, 2017
|
||||||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Eliminations
|
Consolidated
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Goodwill and intangible assets, net
|
$
|
-
|
$
|
43,071
|
$
|
-
|
$
|
-
|
$
|
43,071
|
||||||||||
Total assets
|
246,679
|
116,494
|
94,747
|
(151,121
|
)
|
306,799
|
Year Ended December 31, 2016
|
||||||||||||||||||||
Petrochemical
|
Specialty Wax
|
Corporate
|
Eliminations
|
Consolidated
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Goodwill and intangible assets, net
|
$
|
-
|
$
|
44,467
|
$
|
-
|
$
|
-
|
$
|
44,467
|
||||||||||
Total assets
|
219,376
|
113,676
|
106,428
|
(148,996
|
)
|
290,484
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(Thousands of Dollars)
|
||||||||||||||||
Sales
|
$
|
9,709
|
$
|
318
|
$
|
11,965
|
$
|
9,921
|
||||||||
Gross loss
|
(1,307
|
)
|
(4,747
|
)
|
(11,515
|
)
|
(7,556
|
)
|
||||||||
General, administrative and other expenses
|
2,382
|
2,463
|
6,942
|
6,986
|
||||||||||||
Loss from operations
|
$
|
(3,689
|
)
|
$
|
(7,210
|
)
|
$
|
(18,457
|
)
|
$
|
(14,542
|
)
|
||||
Gain on settlements with former operator
|
-
|
-
|
-
|
17,440
|
||||||||||||
Net income (loss)
|
$
|
(3,689
|
)
|
$
|
(7,210
|
)
|
$
|
(18,457
|
)
|
$
|
2,898
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(Thousands of Dollars)
|
||||||||||||||||
Net income (loss) before depreciation and amortization
|
$
|
2,525
|
$
|
(4,021
|
)
|
$
|
(1,577
|
)
|
$
|
11,504
|
September 30,
|
December 31,
|
|||||||
2017
|
2016
|
|||||||
(Thousands of Dollars)
|
||||||||
Current assets
|
$
|
22,839
|
$
|
22,860
|
||||
Noncurrent assets
|
247,335
|
251,741
|
||||||
Total assets
|
$
|
270,174
|
$
|
274,601
|
||||
Current liabilities
|
$
|
26,315
|
$
|
8,005
|
||||
Long term liabilities
|
78,265
|
82,546
|
||||||
Shareholders' equity
|
165,594
|
184,050
|
||||||
$
|
270,174
|
$
|
274,601
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(Thousands of Dollars)
|
||||||||||||||||
AMAK Net Income (Loss)
|
$
|
(3,689
|
)
|
$
|
(7,210
|
)
|
$
|
(18,457
|
)
|
$
|
2,898
|
|||||
Zakat tax applicable to Saudi Arabian shareholders only
|
-
|
-
|
-
|
320
|
||||||||||||
AMAK Net Income (Loss) before Saudi Arabian shareholders' portion of Zakat
|
$
|
(3,689
|
)
|
$
|
(7,210
|
)
|
$
|
(18,457
|
)
|
$
|
3,218
|
|||||
Company's share of income (loss) reported by AMAK
|
$
|
(1,234
|
)
|
$
|
(2,426
|
)
|
$
|
(6,172
|
)
|
$
|
1,250
|
|||||
Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK
|
337
|
337
|
1,011
|
1,011
|
||||||||||||
Equity in earnings (loss) of AMAK
|
$
|
(897
|
)
|
$
|
(2,089
|
)
|
$
|
(5,161
|
)
|
$
|
2,261
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(Thousands of Dollars)
|
||||||||||||||||
Net Income
|
$
|
1,718
|
$
|
2,799
|
$
|
4,037
|
$
|
20,275
|
||||||||
Interest expense
|
795
|
568
|
2,109
|
1,803
|
||||||||||||
Depreciation and amortization
|
2,810
|
2,565
|
7,966
|
7,176
|
||||||||||||
Income tax expense
|
577
|
1,768
|
1,970
|
11,107
|
||||||||||||
EBITDA
|
$
|
5,900
|
$
|
7,700
|
$
|
16,082
|
$
|
40,361
|
||||||||
Share-based compensation
|
716
|
608
|
2,005
|
1,882
|
||||||||||||
Bargain purchase gain on BASF acquisition
|
-
|
-
|
-
|
(11,549
|
)
|
|||||||||||
Gain from additional equity issuance by AMAK
|
-
|
(3,168
|
)
|
-
|
(3,168
|
)
|
||||||||||
Equity in (earnings) losses of AMAK
|
897
|
2,089
|
5,161
|
(2,261
|
)
|
|||||||||||
Adjusted EBITDA
|
$
|
7,513
|
$
|
7,229
|
$
|
23,248
|
$
|
25,265
|
||||||||
Net Income
|
$
|
1,718
|
$
|
2,799
|
$
|
4,037
|
$
|
20,275
|
||||||||
Equity in (earnings) losses of AMAK
|
$
|
897
|
$
|
2,089
|
$
|
5,161
|
$
|
(2,261
|
)
|
|||||||
Gain from additional equity issuance by AMAK
|
-
|
(3,168
|
)
|
-
|
(3,168
|
)
|
||||||||||
Bargain purchase gain on BASF acquisition
|
-
|
-
|
-
|
(11,549
|
)
|
|||||||||||
Total of equity in (earnings) losses of AMAK and bargain
purchase gain on BASF acquisition
|
897
|
(1,079
|
)
|
5,161
|
(16,978
|
)
|
||||||||||
Taxes at statutory rate of 35%
|
314
|
378
|
1,806
|
5,943
|
||||||||||||
Tax effected equity in (earnings) losses of AMAK and bargain
purchase gain on BASF acquisition
|
583
|
(701
|
)
|
3,355
|
(11,035
|
)
|
||||||||||
Adjusted Net Income
|
$
|
2,301
|
$
|
2,098
|
$
|
7,392
|
$
|
9,240
|
September 30, 2017
|
December 31, 2016
|
September 30, 2016
|
||||||||||
Days sales outstanding in accounts receivable
|
34.6
|
38.2
|
34.3
|
|||||||||
Days sales outstanding in inventory
|
19.6
|
30.2
|
31.8
|
|||||||||
Days sales outstanding in accounts payable
|
18.9
|
22.9
|
16.0
|
|||||||||
Days of working capital
|
35.4
|
45.5
|
50.2
|
2017
|
2016
|
|||||||
Net cash provided by (used in)
|
(thousands of dollars)
|
|||||||
Operating activities
|
$
|
29,554
|
$
|
20,074
|
||||
Investing activities
|
(39,336
|
)
|
(27,871
|
)
|
||||
Financing activities
|
5,612
|
(3,239
|
)
|
|||||
Decrease in cash
|
$
|
(4,170
|
)
|
$
|
(11,036
|
)
|
||
Cash
|
$
|
4,219
|
$
|
7,587
|
·
|
Inventory decreased approximately $5.0 million
(due to an effort to decrease inventory on hand at both facilities and downtime associated with the hurricane which impacted production)
as compared to an increase of approximately $2.6 million
in 2016 (due to lower sales volume);
|
·
|
Prepaid expenses and other assets decreased approximately $0.4 million (primarily due to a reduction in prepaid insurance due to a finance arrangement) as compared to an increase of approximately $1.3 million in 2016 (due primarily to an increase in prepaid insurance because of higher premiums based upon our higher asset base); and
|
·
|
Accounts payable and accrued liabilities increased $3.4 million (due to an increase in construction expenditures) as compared to an increase of approximately $1.3 million in 2016 (also due to increased construction expenditures).
|
·
|
Income tax receivable decreased $0.2 million (due to an adjustment to current taxes related to the change to the LIFO method for inventory valuation) as compared to a decrease of approximately $4.1 million in 2016 (due to the overpayment being applied to 2016 estimated taxes).
|
2017
|
2016
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Petrochemical Product Sales
|
$
|
52,440
|
$
|
47,250
|
$
|
5,190
|
11.0
|
%
|
||||||||
Processing
|
1,519
|
2,909
|
(1,390
|
)
|
(47.8
|
%)
|
||||||||||
Gross Revenue
|
$
|
53,959
|
$
|
50,159
|
$
|
3,800
|
7.6
|
%
|
||||||||
Volume of Sales (gallons)
|
||||||||||||||||
Petrochemical Products
|
22,353
|
20,665
|
1,688
|
8.2
|
%
|
|||||||||||
Prime Product Sales
|
16,681
|
15,818
|
863
|
5.5
|
%
|
|||||||||||
Cost of Sales
|
$
|
43,424
|
$
|
41,531
|
$
|
1,893
|
4.6
|
%
|
||||||||
Gross Margin
|
19.5
|
%
|
17.2
|
%
|
2.3
|
%
|
13.5
|
%
|
||||||||
Total Operating Expense**
|
15,040
|
16,686
|
(1,646
|
)
|
(9.9
|
%)
|
||||||||||
Natural Gas Expense**
|
1,106
|
992
|
114
|
11.5
|
%
|
|||||||||||
Operating Labor Costs**
|
4,412
|
4,084
|
328
|
8.0
|
%
|
|||||||||||
Transportation Costs**
|
6,051
|
6,701
|
(650
|
)
|
(9.7
|
%)
|
||||||||||
General & Administrative Expense
|
2,595
|
2,105
|
490
|
23.3
|
%
|
|||||||||||
Depreciation and Amortization*
|
1,584
|
1,447
|
137
|
9.5
|
%
|
|||||||||||
Capital Expenditures
|
$
|
9,426
|
$
|
5,411
|
$
|
4,015
|
74.2
|
%
|
2017
|
2016
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Product Sales
|
$
|
5,590
|
$
|
4,864
|
$
|
726
|
14.9
|
%
|
||||||||
Processing
|
1,959
|
2,119
|
(160
|
)
|
(7.6
|
%)
|
||||||||||
Gross Revenue
|
$
|
7,549
|
$
|
6,983
|
$
|
566
|
8.1
|
%
|
||||||||
Volume of wax sales (thousand pounds)
|
8,036
|
8,248
|
(212
|
)
|
(2.6
|
%)
|
||||||||||
Cost of Sales
|
$
|
8,216
|
$
|
6,708
|
$
|
1,508
|
22.5
|
%
|
||||||||
Gross Margin
|
(8.8
|
%)
|
4.0
|
%
|
(12.8
|
%)
|
(320.0
|
%)
|
||||||||
General & Administrative Expense
|
1,107
|
1,238
|
(131
|
)
|
(10.6
|
%)
|
||||||||||
Depreciation and Amortization*
|
1,208
|
1,105
|
103
|
9.3
|
%
|
|||||||||||
Capital Expenditures
|
$
|
1,991
|
$
|
4,066
|
$
|
(2,075
|
)
|
(51.0
|
%)
|
2017
|
2016
|
Change
|
%Change
|
|||||||||||||
(in thousands)
|
||||||||||||||||
General & Administrative Expense
|
$
|
1,957
|
$
|
1,238
|
$
|
719
|
58.1
|
%
|
||||||||
Equity in earnings (losses) of AMAK
|
(897
|
)
|
(2,089
|
)
|
1,192
|
(57.1
|
%)
|
|||||||||
Gain from additional equity issuance by AMAK
|
-
|
3,168
|
(3,168
|
)
|
(100.0
|
%)
|
Three Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
(thousands of dollars)
|
||||||||
Sales
|
$
|
9,709
|
$
|
318
|
||||
Gross loss
|
1,307
|
4,747
|
||||||
General, administrative and other expenses
|
2,382
|
2,463
|
||||||
Net loss
|
$
|
3,689
|
$
|
7,210
|
2017
|
2016
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Petrochemical Product Sales
|
$
|
147,339
|
$
|
129,076
|
$
|
18,263
|
14.1
|
%
|
||||||||
Processing
|
5,078
|
6,769
|
(1,691
|
)
|
(25.0
|
%)
|
||||||||||
Gross Revenue
|
$
|
152,417
|
$
|
135,845
|
$
|
16,572
|
12.2
|
%
|
||||||||
Volume of Sales (gallons)
|
||||||||||||||||
Petrochemical Products
|
60,512
|
58,018
|
2,494
|
4.3
|
%
|
|||||||||||
Prime Product Sales
|
46,867
|
44,018
|
2,849
|
6.5
|
%
|
|||||||||||
Cost of Sales
|
$
|
122,351
|
$
|
107,067
|
$
|
15,284
|
14.3
|
%
|
||||||||
Gross margin
|
19.7
|
%
|
21.2
|
%
|
(1.5
|
%)
|
(6.9
|
%)
|
||||||||
Total Operating Expense**
|
43,161
|
43,527
|
(366
|
)
|
(0.8
|
%)
|
||||||||||
Natural Gas Expense**
|
3,545
|
2,405
|
1,140
|
47.4
|
%
|
|||||||||||
Operating Labor Costs**
|
11,688
|
11,893
|
(205
|
)
|
(1.7
|
%)
|
||||||||||
Transportation Costs**
|
18,314
|
17,850
|
464
|
2.6
|
%
|
|||||||||||
General & Administrative Expense
|
7,914
|
6,821
|
1,093
|
16.0
|
%
|
|||||||||||
Depreciation and Amortization*
|
4,684
|
4,211
|
473
|
11.2
|
%
|
|||||||||||
Capital Expenditures
|
$
|
27,203
|
$
|
16,812
|
$
|
10,391
|
61.8
|
%
|
2017
|
2016
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
Product Sales
|
$
|
18,606
|
$
|
14,585
|
$
|
4,021
|
27.6
|
%
|
||||||||
Processing
|
8,142
|
7,766
|
376
|
4.8
|
%
|
|||||||||||
Gross Revenue
|
$
|
26,748
|
$
|
22,351
|
$
|
4,397
|
19.7
|
%
|
||||||||
Volume of wax sales (thousand pounds)
|
28,281
|
24,126
|
4,155
|
17.2
|
%
|
|||||||||||
Cost of Sales
|
$
|
25,219
|
$
|
18,880
|
$
|
6,339
|
33.6
|
%
|
||||||||
Gross Margin
|
5.7
|
%
|
15.5
|
%
|
(9.8
|
%)
|
(63.2
|
%)
|
||||||||
General & Administrative Expense
|
3,729
|
3,582
|
147
|
4.1
|
%
|
|||||||||||
Depreciation and Amortization*
|
3,233
|
2,945
|
288
|
9.8
|
%
|
|||||||||||
Capital Expenditures
|
$
|
12,047
|
$
|
11,059
|
$
|
988
|
8.9
|
%
|
2017
|
2016
|
Change
|
%Change
|
|||||||||||||
(thousands of dollars)
|
||||||||||||||||
General & Administrative Expense
|
$
|
5,978
|
$
|
5,128
|
$
|
850
|
16.6
|
%
|
||||||||
Equity in earnings (losses) of AMAK
|
(5,161
|
)
|
2,261
|
(7,422
|
)
|
(328.3
|
%)
|
|||||||||
Gain from additional equity issuance by AMAK
|
-
|
3,168
|
(3,168
|
)
|
(100.0
|
%)
|
Nine Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
(thousands of dollars)
|
||||||||
Sales
|
$
|
11,965
|
$
|
9,921
|
||||
Gross loss
|
(11,515
|
)
|
(7,556
|
)
|
||||
General, administrative and other expenses
|
6,942
|
6,986
|
||||||
Loss from operations
|
(18,457
|
)
|
(14,542
|
)
|
||||
Gain on settlement with former operator
|
-
|
17,440
|
||||||
Net income (loss)
|
$
|
(18,457
|
)
|
$
|
2,898
|
(a)
|
Evaluation of disclosure controls and procedures
. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934) and determined that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to the material weakness in internal control over financial reporting as described below.
|
(b)
|
Changes in internal control
. Other than the efforts discussed immediately above in "Remediation of Material Weakness in Internal Control over Financial Reporting", there was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
|
Exhibit
Number
|
Description
|
10(a)
|
Third Amendment to Amended and Restated Credit Agreement
dated as of July 25, 2017, among Texas Oil & Chemical Co. II, Inc. and certain subsidiaries and Bank of America, N.A. as administrative agent (incorporated by reference to Exhibit 99.2 to the Company's Form 8-K filed on July 27, 2017 (file No. 001-33926))
|
Form of Trecora Resources Stock and Incentive Plan Restricted Stock Unit Agreement
|
|
Form of Trecora Resources Stock and Incentive Plan Amended and Restated Restricted Stock Unit Agreement
|
|
31.1
**
|
Certification of Chief Executive Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934
|
31.2
**
|
Certification of Chief Financial Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934
|
32.1
**
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
**
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Schema Document
|
101.CAL*
|
XBRL Taxonomy Calculation Linkbase Document
|
101.LAB*
|
XBRL Taxonomy Label Linkbase Document
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
1. |
I have reviewed this quarterly report on Form 10-Q of Trecora Resources;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant's internal control over financial reporting.
|
5. |
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's independent registered public accounting firm and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1. |
I have reviewed this quarterly report on Form 10-Q of Trecora Resources;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant's internal control over financial reporting.
|
5. |
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's independent registered public accounting firm and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Percentage of Restricted Stock Units to Vest
|
Vesting Date
|
TRECORA RESOURCES
By:
Name:
Title:
Date:
|
HOLDER
By:
Name:
______________________________
Date:
|
TRECORA RESOURCES
By:
Name:
Title:
Date:
|
HOLDER
By:
Name:
______________________________
Date:
|
Number of Restricted Stock Units Subject to this Agreement**
|
Percentage of Restricted Stock Units to Vest*
|
Vesting Date
|
Original Date of Grant***
|