☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 2020
OR
|
||||
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period from ___________ to ________ |
Delaware
(State or other jurisdiction of incorporation or organization)
|
75-1256622
(I.R.S. Employer
Identification No.)
|
||||
1650 Hwy 6 S, Suite 190
Sugar Land, TX
(Address of principal executive offices)
|
77478
(Zip code)
|
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $0.10 per share | TREC | New York Stock Exchange |
Large accelerated filer ☐
|
Accelerated filer ý
|
||||
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
||||
Emerging growth company ☐
|
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
(thousands of dollars, except per share information) | |||||||||||||||||||||||||||||
Revenues | $ | 208,626 | $ | 258,959 | $ | 287,932 | $ | 245,143 | $ | 212,399 | |||||||||||||||||||
Income (loss) from continuing operations | 4,966 | (12,884) | (1,728) | 21,512 | 17,559 | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 26,209 | (2,090) | (604) | (3,503) | 1,869 | ||||||||||||||||||||||||
Net income (loss) | 31,175 | (14,974) | (2,332) | 18,009 | 19,428 | ||||||||||||||||||||||||
Basic income (loss) per common share: | |||||||||||||||||||||||||||||
Income (loss) from continuing operations (dollars) | 0.20 | (0.52) | (0.07) | 0.89 | 0.72 | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax (dollars) | 1.06 | (0.08) | (0.02) | (0.14) | 0.08 | ||||||||||||||||||||||||
Net income (loss) (dollars) | 1.26 | (0.61) | (0.10) | 0.74 | 0.80 | ||||||||||||||||||||||||
Diluted income (loss) per common share: | |||||||||||||||||||||||||||||
Income (loss) from continuing operations (dollars) | 0.20 | (0.52) | (0.07) | 0.86 | 0.70 | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax (dollars) | 1.03 | (0.08) | (0.02) | (0.14) | 0.07 | ||||||||||||||||||||||||
Net income (loss) (dollars) | 1.23 | (0.61) | (0.10) | (0.72) | 0.78 | ||||||||||||||||||||||||
EBITDA from continuing operations (1) | 19,642 | 4,890 | 16,084 | 29,176 | 40,310 | ||||||||||||||||||||||||
Adjusted EBITDA from continuing operations (1) | 21,593 | 31,041 | 20,168 | 31,880 | 31,313 | ||||||||||||||||||||||||
Total Assets | 316,833 | 301,819 | 329,968 | 327,326 | 290,484 | ||||||||||||||||||||||||
Current portion of long-term debt | 4,194 | 4,194 | 4,194 | 8,061 | 10,145 | ||||||||||||||||||||||||
Total long-term debt obligations | 41,901 | 79,095 | 98,288 | 91,021 | 73,107 |
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
Net income (loss) | $ | 31,175 | $ | (14,974) | $ | (2,332) | $ | 18,009 | $ | 19,428 | |||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 26,209 | (2,090) | (604) | (3,503) | 1,869 | ||||||||||||||||||||||||
Income (loss) from continuing operations | 4,966 | (12,884) | (1,728) | 21,512 | 17,559 | ||||||||||||||||||||||||
Interest expense | 2,491 | 5,139 | 4,100 | 2,931 | 1,981 | ||||||||||||||||||||||||
Derivative (gains) losses on interest rate swap | — | — | — | (3) | 4 | ||||||||||||||||||||||||
Depreciation and amortization | 16,148 | 16,201 | 14,358 | 10,961 | 9,777 | ||||||||||||||||||||||||
Income tax (benefit) expense* | (3,963) | (3,566) | (646) | (6,228) | 10,989 | ||||||||||||||||||||||||
EBITDA from continuing operations | 19,642 | 4,890 | 16,084 | 29,173 | 40,310 | ||||||||||||||||||||||||
Share-based compensation** | 1,912 | 1,319 | 1,422 | 2,707 | 2,552 | ||||||||||||||||||||||||
Loss on disposal of assets | 39 | 680 | — | — | — | ||||||||||||||||||||||||
Impairment of goodwill and certain intangibles | — | 24,152 | — | — | — | ||||||||||||||||||||||||
Bargain purchase gain | — | — | — | — | (11,549) | ||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | 315 | — | — | ||||||||||||||||||||||||
Restructuring and severance expenses | — | — | 2,347 | — | — | ||||||||||||||||||||||||
Adjusted EBITDA from continuing operations | $ | 21,593 | $ | 31,041 | $ | 20,168 | $ | 31,880 | $ | 31,313 |
December 31, 2020 | December 31, 2019 | December 31, 2018 | |||||||||||||||
Days sales outstanding in accounts receivable | 40.0 | 37.1 | 34.4 | ||||||||||||||
Days sales outstanding in inventory | 20.5 | 19.2 | 21.0 | ||||||||||||||
Days sales outstanding in accounts payable | 22.9 | 20.6 | 24.2 | ||||||||||||||
Days of working capital | 37.7 | 35.7 | 31.1 |
2020 | 2019 | 2018 | |||||||||||||||
Net cash provided by (used in) | (in thousands) | ||||||||||||||||
Operating activities | $ | 25,565 | $ | 25,121 | $ | 19,895 | |||||||||||
Investing activities | 55,329 | (6,031) | (19,871) | ||||||||||||||
Financing activities | (31,375) | (19,680) | 3,683 | ||||||||||||||
Increase (decrease) in cash and equivalents | $ | 49,519 | $ | (590) | $ | 3,707 | |||||||||||
Cash and cash equivalents | 55,664 | 6,145 | 6,735 |
Payments due by period | |||||||||||||||||||||||||||||
Contractual Obligations | Total |
Less than
1 year |
1-3 years | 3-5 years | More than 5 years | ||||||||||||||||||||||||
(thousands of dollars) | |||||||||||||||||||||||||||||
Operating Lease Obligations | $ | 14,898 | $ | 3,703 | $ | 6,758 | $ | 3,355 | $ | 1,082 | |||||||||||||||||||
Purchase Obligations | 9,799 | 9,799 | — | — | — | ||||||||||||||||||||||||
Long-Term Debt Obligations | 46,563 | 4,375 | 42,188 | — | — | ||||||||||||||||||||||||
Total | $ | 71,260 | $ | 17,877 | $ | 48,946 | $ | 3,355 | $ | 1,082 |
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(thousands of dollars) | |||||||||||||||||||||||
Specialty Petrochemicals Product Sales | $ | 167,054 | $ | 218,743 | $ | (51,689) | (23.6) | % | |||||||||||||||
Processing | 5,296 | 5,568 | (272) | (4.9) | % | ||||||||||||||||||
Gross Revenue | $ | 172,350 | $ | 224,311 | $ | (51,961) | (23.2) | % | |||||||||||||||
Volume of Sales (gallons) | |||||||||||||||||||||||
Specialty Petrochemicals Products | 75,101 | 84,780 | (9,679) | (11.4) | % | ||||||||||||||||||
Prime Products Sales | 61,650 | 68,099 | (6,449) | (9.5) | % | ||||||||||||||||||
By-product Sales | 13,451 | 16,681 | (3,230) | (19.4) | % | ||||||||||||||||||
Cost of Sales | $ | 145,166 | $ | 184,666 | $ | (39,500) | (21.4) | % | |||||||||||||||
Gross Margin | 15.8 | % | 17.7 | % | (1.9) | % | |||||||||||||||||
Total Operating Expense* | 70,224 | 72,206 | (1,982) | (2.7) | % | ||||||||||||||||||
Natural Gas Expense* | 3,737 | 4,800 | (1,063) | (22.1) | % | ||||||||||||||||||
Operating Labor Costs* | 16,138 | 14,222 | 1,916 | 13.5 | % | ||||||||||||||||||
Transportation Costs* | 22,181 | 28,270 | (6,089) | (21.5) | % | ||||||||||||||||||
General & Administrative Expense | 10,618 | 10,650 | (32) | (0.3) | % | ||||||||||||||||||
Depreciation** | 10,611 | 10,556 | 55 | 0.5 | % | ||||||||||||||||||
Capital Expenditures | 11,334 | 6,955 | 4,379 | 63.0 | % |
2020 | 2019 | Change | % Change | ||||||||||||||||||||
(thousands of dollars) | |||||||||||||||||||||||
Product Sales | $ | 25,321 | $ | 24,571 | $ | 750 | 3.1 | % | |||||||||||||||
Processing | 10,955 | 10,078 | 877 | 8.7 | % | ||||||||||||||||||
Gross Revenue | $ | 36,276 | $ | 34,649 | $ | 1,627 | 4.7 | % | |||||||||||||||
Volume of specialty waxes sales (pounds) | 36,387 | 34,369 | 2,018 | 5.9 | % | ||||||||||||||||||
Cost of Sales | $ | 34,782 | $ | 35,778 | $ | (996) | (2.8) | % | |||||||||||||||
Gross Margin (Loss) | 4.1 | % | (3.3) | % | 7.4 | % | |||||||||||||||||
General & Administrative Expense* | 5,160 | 4,546 | 614 | 13.5 | % | ||||||||||||||||||
Impairment of Goodwill and Certain Intangibles | — | 24,152 | (24,152) | (100.0) | % | ||||||||||||||||||
Depreciation and Amortization** | 5,522 | 5,593 | (71) | (1.3) | % | ||||||||||||||||||
Capital Expenditures | 1,995 | 3,124 | (1,129) | (36.1) | % |
2020 | 2019 | Change | %Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
General & Administrative Expense | $ | 9,125 | $ | 9,190 | $ | (65) | (0.7) | % |
2020 | 2019 | Change | %Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Equity in earnings (losses) of AMAK | $ | 702 | $ | (986) | $ | 1,688 | 171.2 | % |
Exhibit
Number |
Description | ||||
24* | |||||
31.1* | |||||
31.2* | |||||
32* | |||||
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 | ||||
104* | Cover Page Interactive Data File (formatted as inline XBRL and included as Exhibit 101) |
TRECORA RESOURCES
|
||||||||
Dated: March 09, 2021 |
By:
|
/s/ Patrick Quarles
|
||||||
Patrick Quarles
|
||||||||
Chief Executive Officer and President
|
Signature | Title | ||||
/s/ Patrick Quarles
Patrick Quarles
|
Chief Executive Officer, President and Director
(principal executive officer) |
||||
/s/ Sami Ahmad
Sami Ahmad
|
Chief Financial Officer
(principal financial officer) |
||||
/s/ Christopher Groves
Christopher Groves
|
Corporate Controller
(principal accounting officer) |
||||
/s/ Karen A. Twitchell
Karen A. Twitchell
|
Chair of the Board and Director | ||||
/s/ Gary K. Adams
Gary K. Adams
|
Director | ||||
/s/ Pamela R. Butcher
Pamela R. Butcher
|
Director | ||||
/s/ Nicholas Carter
Nicholas Carter
|
Director | ||||
/s/ Adam C. Peakes
Adam C. Peakes
|
Director | ||||
/s/ Janet S. Roemer
Janet S. Roemer
|
Director |
TRECORA RESOURCES AND SUBSIDIARIES | |||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
For the years ended December 31,
|
|||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(thousands of dollars) | |||||||||||||||||
Revenues | |||||||||||||||||
Product sales | $ | 192,375 | $ | 243,314 | $ | 269,780 | |||||||||||
Processing fees | 16,251 | 15,645 | 18,152 | ||||||||||||||
208,626 | 258,959 | 287,932 | |||||||||||||||
Operating costs and expenses | |||||||||||||||||
Cost of sales and processing (including depreciation and amortization of $15,300, $15,361, and $13,618, respectively)
|
179,948 | 220,444 | 260,114 | ||||||||||||||
Gross Profit | 28,678 | 38,515 | 27,818 | ||||||||||||||
General and Administrative Expenses | |||||||||||||||||
General and administrative | 24,892 | 24,386 | 22,532 | ||||||||||||||
Impairment of goodwill and certain intangibles (Note 10) | — | 24,152 | — | ||||||||||||||
Restructuring and severance (Note 21) | — | — | 2,347 | ||||||||||||||
Depreciation | 848 | 840 | 740 | ||||||||||||||
25,740 | 49,378 | 25,619 | |||||||||||||||
Operating income (loss) | 2,938 | (10,863) | 2,199 | ||||||||||||||
Other expenses | |||||||||||||||||
Interest expense | 2,491 | 5,139 | 4,100 | ||||||||||||||
Loss on extinguishment of debt | — | — | 315 | ||||||||||||||
Loss on disposal of assets | 39 | 680 | — | ||||||||||||||
Miscellaneous (income) expense | (595) | (232) | 158 | ||||||||||||||
1,935 | 5,587 | 4,573 | |||||||||||||||
Income (loss) from continuing operations before income tax benefit | 1,003 | (16,450) | (2,374) | ||||||||||||||
Income tax benefit | 3,963 | 3,566 | 646 | ||||||||||||||
Income (loss) from continuing operations | 4,966 | (12,884) | (1,728) | ||||||||||||||
Income (loss) from discontinued operations, net of tax | 26,209 | (2,090) | (604) | ||||||||||||||
Net income (loss) | $ | 31,175 | $ | (14,974) | $ | (2,332) | |||||||||||
Basic income (loss) per common share: | |||||||||||||||||
Net income (loss) from continuing operations (dollars) | $ | 0.20 | $ | (0.52) | $ | (0.07) | |||||||||||
Net income (loss) from discontinued operations, net of tax (dollars) | $ | 1.06 | $ | (0.08) | $ | (0.02) | |||||||||||
Net income (loss) (dollars) | $ | 1.26 | $ | (0.61) | $ | (0.10) | |||||||||||
Basic weighted average number of common shares outstanding | 24,802 | 24,698 | 24,438 | ||||||||||||||
Diluted income (loss) per common share: | |||||||||||||||||
Net income (loss) from continuing operations (dollars) | $ | 0.20 | $ | (0.52) | $ | (0.07) | |||||||||||
Net income (loss) from discontinued operations, net of tax (dollars) | $ | 1.03 | $ | (0.08) | $ | (0.02) | |||||||||||
Net income (loss) (dollars) | $ | 1.23 | $ | (0.61) | $ | (0.10) | |||||||||||
Diluted weighted average number of common shares outstanding | 25,356 | 24,698 | 24,438 |
TRECORA RESOURCES STOCKHOLDERS | |||||||||||||||||||||||||||||||||||||||||||||||
Additional | Non- | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-In | Treasury | Retained | Controlling | Total | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Stock | Earnings | Total | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||
(thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
January 1, 2018 | 24,311 | $ | 2,451 | $ | 56,012 | $ | (196) | $ | 126,455 | $ | 184,722 | $ | 289 | $ | 185,011 | ||||||||||||||||||||||||||||||||
Stock options | |||||||||||||||||||||||||||||||||||||||||||||||
Issued to Directors | — | — | (10) | — | — | (10) | — | (10) | |||||||||||||||||||||||||||||||||||||||
Issued to Employees | — | — | 154 | — | — | 154 | — | 154 | |||||||||||||||||||||||||||||||||||||||
Cancellations (see Note 15) | — | — | (680) | — | — | (680) | — | (680) | |||||||||||||||||||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||
Issued to Directors | — | — | 338 | — | — | 338 | — | 338 | |||||||||||||||||||||||||||||||||||||||
Issued to Employees | — | — | 1,939 | — | — | 1,939 | — | 1,939 | |||||||||||||||||||||||||||||||||||||||
Common stock | |||||||||||||||||||||||||||||||||||||||||||||||
Issued to Directors | 188 | 10 | 489 | 89 | — | 588 | — | 588 | |||||||||||||||||||||||||||||||||||||||
Issued to Employees | 183 | 2 | 127 | 155 | — | 284 | — | 284 | |||||||||||||||||||||||||||||||||||||||
Stock Exchange | (65) | — | (66) | (65) | — | (131) | — | (131) | |||||||||||||||||||||||||||||||||||||||
Warrants exercised | 9 | — | (9) | 9 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Net Loss | — | — | — | — | (2,332) | (2,332) | — | (2,332) | |||||||||||||||||||||||||||||||||||||||
December 31, 2018 | 24,626 | $ | 2,463 | $ | 58,294 | $ | (8) | $ | 124,123 | $ | 184,872 | $ | 289 | $ | 185,161 | ||||||||||||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||
Issued to Directors | — | — | 353 | — | — | 353 | — | 353 | |||||||||||||||||||||||||||||||||||||||
Issued to Employees | — | — | 883 | — | — | 883 | — | 883 | |||||||||||||||||||||||||||||||||||||||
Common stock | |||||||||||||||||||||||||||||||||||||||||||||||
Issued to Directors | 20 | 1 | — | 8 | — | 9 | — | 9 | |||||||||||||||||||||||||||||||||||||||
Issued to Employees | 104 | 11 | — | — | — | 11 | — | 11 | |||||||||||||||||||||||||||||||||||||||
Net Loss | — | — | — | — | (14,974) | (14,974) | — | (14,974) | |||||||||||||||||||||||||||||||||||||||
December 31, 2019 | 24,750 | $ | 2,475 | $ | 59,530 | $ | — | $ | 109,149 | $ | 171,154 | $ | 289 | $ | 171,443 | ||||||||||||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||
Issued to Directors | — | — | 1,369 | — | — | 1,369 | — | 1,369 | |||||||||||||||||||||||||||||||||||||||
Issued to Employees | — | — | 420 | — | — | 420 | — | 420 | |||||||||||||||||||||||||||||||||||||||
Common stock | |||||||||||||||||||||||||||||||||||||||||||||||
Issued to Directors | 56 | 5 | (5) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issued to Employees | 27 | 3 | (3) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | 31,175 | 31,175 | — | 31,175 | |||||||||||||||||||||||||||||||||||||||
December 31, 2020 | 24,833 | $ | 2,483 | $ | 61,311 | $ | — | $ | 140,324 | $ | 204,118 | $ | 289 | $ | 204,407 |
TRECORA RESOURCES AND SUBSIDIARIES
|
|||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||||||||
For the years ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(thousands of dollars) | |||||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||
Net Income (Loss) | $ | 31,175 | $ | (14,974) | $ | (2,332) | |||||||||||
Income (Loss) from Discontinued Operations | 26,209 | (2,090) | (604) | ||||||||||||||
Income (Loss) from Continuing Operations | $ | 4,966 | $ | (12,884) | $ | (1,728) | |||||||||||
Adjustments to reconcile Income (Loss) from Continuing Operations to Net Cash Provided by Operating Activities: | |||||||||||||||||
Depreciation and Amortization
|
14,306 | 14,345 | 12,497 | ||||||||||||||
Amortization of Intangible Assets
|
1,842 | 1,856 | 1,861 | ||||||||||||||
Stock-based Compensation
|
1,912 | 1,250 | 1,753 | ||||||||||||||
Deferred Income Taxes
|
14,553 | (2,993) | (1,377) | ||||||||||||||
Postretirement Obligation
|
(7) | (38) | (825) | ||||||||||||||
Bad Debt Expense (Recoveries)
|
— | (23) | 152 | ||||||||||||||
Amortization of Loan Fees
|
181 | 181 | 261 | ||||||||||||||
Loss on Extinguishment of Debt
|
— | — | 315 | ||||||||||||||
Loss on Disposal of Assets | 39 | 680 | — | ||||||||||||||
Impairment of Goodwill and Certain Intangibles
|
— | 24,152 | — | ||||||||||||||
Changes in Operating Assets and Liabilities: | |||||||||||||||||
(Increase) Decrease in Trade Receivables
|
1,018 | 816 | (1,485) | ||||||||||||||
(Increase) Decrease in Taxes Receivable
|
(2,606) | — | 5,401 | ||||||||||||||
Decrease in Inventories | 680 | 2,914 | 1,911 | ||||||||||||||
(Increase) Decrease in Prepaid Expenses and Other Assets
|
(2,403) | (304) | (1,222) | ||||||||||||||
Increase (Decrease) in Other Liabilities | (5,739) | 581 | 33 | ||||||||||||||
Increase (Decrease) in Accounts Payable and Accrued Liabilities
|
831 | (4,944) | 2,202 | ||||||||||||||
Net Cash Provided by Operating Activities - Continuing Operations
|
29,573 | 25,589 | 19,749 | ||||||||||||||
Net Cash (Used in) Provided by Operating Activities - Discontinued Operations
|
(4,008) | (468) | 146 | ||||||||||||||
Net Cash Provided by Operating Activities
|
25,565 | 25,121 | 19,895 | ||||||||||||||
INVESTING ACTIVITIES | |||||||||||||||||
Additions to Plant, Pipeline and Equipment
|
(13,351) | (10,079) | (25,285) | ||||||||||||||
Proceeds from PEVM
|
150 | 27 | — | ||||||||||||||
Net Cash Used in Investing Activities - Continuing Operations
|
(13,201) | (10,052) | (25,285) | ||||||||||||||
Net Cash Provided by Investing Activities - Discontinued Operations | 68,530 | 4,021 | 5,414 | ||||||||||||||
Net Cash Provided by (Used in) Investing Activities | 55,329 | (6,031) | (19,871) | ||||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||
Net Cash (Paid) Received Related to Stock-Based Compensation
|
(123) | (305) | 860 | ||||||||||||||
Additions to CARES Act, PPP Loans | 6,123 | — | — | ||||||||||||||
Additions to Long-Term Debt
|
20,000 | 2,000 | 18,177 | ||||||||||||||
Repayment of Long-Term Debt
|
(57,375) | (21,375) | (15,354) | ||||||||||||||
Net Cash (Used in) Provided by Financing Activities
|
(31,375) | (19,680) | 3,683 | ||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 49,519 | (590) | 3,707 | ||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
6,145 | 6,735 | 3,028 |
TRECORA RESOURCES AND SUBSIDIARIES
|
|||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||||||||
For the years ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(thousands of dollars) | |||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 55,664 | $ | 6,145 | $ | 6,735 | |||||||||||
Supplemental disclosure of cash flow information:
|
|||||||||||||||||
Cash payments for interest | $ | 2,266 | $ | 4,731 | $ | 4,560 | |||||||||||
Cash payments (net of refunds) for taxes | $ | (11,069) | $ | 53 | $ | (4,182) | |||||||||||
Supplemental disclosure of non-cash items:
|
|||||||||||||||||
Capital expansion amortized to depreciation expense | $ | 821 | $ | 792 | $ | 787 | |||||||||||
Cash held in escrow by AMAK | $ | 1,877 | $ | — | $ | — | |||||||||||
Foreign taxes paid by AMAK | $ | 270 | $ | — | $ | — | |||||||||||
Stock exchange (Notes 10 & 18) | $ | — | $ | — | $ | 131 |
Trade receivables, net, at December 31, consisted of the following: | |||||||||||
2020 | 2019 | ||||||||||
(thousands of dollars) | |||||||||||
Trade receivables | $ | 25,601 | $ | 26,749 | |||||||
Less allowance for doubtful accounts | (300) | (429) | |||||||||
Trade receivables, net | $ | 25,301 | $ | 26,320 |
Inventories include the following at December 31: | |||||||||||
2020 | 2019 | ||||||||||
(thousands of dollars) | |||||||||||
Raw material | $ | 2,580 | $ | 2,100 | |||||||
Work in process | 138 | 142 | |||||||||
Finished products | 10,227 | 11,382 | |||||||||
Total inventory | $ | 12,945 | $ | 13,624 |
Years Ended December 31, | ||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
(thousands of dollars) | ||||||||||||||||||||
Saudi administration and transaction expenses | $ | (2,452) | $ | (187) | $ | 136 | ||||||||||||||
Equity in earnings (losses) of AMAK | 702 | (986) | (901) | |||||||||||||||||
Gain (loss) on sale of equity interest | 34,926 | (1,473) | — | |||||||||||||||||
Income (loss) from discontinued operations before taxes | 33,176 | (2,646) | (765) | |||||||||||||||||
Tax (expense) benefit | (6,967) | 556 | 161 | |||||||||||||||||
Income (loss) from discontinued operations, net of tax | $ | 26,209 | $ | (2,090) | $ | (604) |
Results of Operations | Nine Months Ended September 30, | Year Ended December 31, | ||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
(thousands of dollars) | ||||||||||||||||||||
Sales | $ | 62,633 | $ | 78,350 | $ | 70,234 | ||||||||||||||
Cost of sales | (55,728) | (69,620) | (68,084) | |||||||||||||||||
Gross profit | 6,905 | 8,730 | 2,150 | |||||||||||||||||
Selling, general, and administrative | (4,985) | (13,047) | (7,860) | |||||||||||||||||
Operating income (loss) | 1,920 | (4,317) | (5,710) | |||||||||||||||||
Other (expense) income | (346) | 558 | 86 | |||||||||||||||||
Finance and interest expense | (1,211) | (1,450) | (1,592) | |||||||||||||||||
Income (loss) before Zakat and income taxes | 363 | (5,209) | (7,216) | |||||||||||||||||
Zakat and income tax (expense) benefit | (490) | (1,801) | 487 | |||||||||||||||||
Net loss | $ | (127) | $ | (7,010) | $ | (6,729) |
Financial Position | September 30, | December 31, | ||||||||||||
2020 | 2019 | |||||||||||||
(thousands of dollars) | ||||||||||||||
Current assets | $ | 29,799 | $ | 45,354 | ||||||||||
Noncurrent assets | 209,814 | 196,564 | ||||||||||||
Total assets | $ | 239,613 | $ | 241,918 | ||||||||||
Current liabilities | $ | 40,919 | $ | 27,645 | ||||||||||
Long term liabilities | 79,122 | 79,348 | ||||||||||||
Stockholders' equity | 119,572 | 134,925 | ||||||||||||
$ | 239,613 | $ | 241,918 |
Prepaid expenses and other assets at December 31 are summarized as follows: | |||||||||||
2020 | 2019 | ||||||||||
(thousands of dollars) | |||||||||||
Prepaid license | $ | 403 | $ | 1,209 | |||||||
Prepaid insurance | 4,241 | — | |||||||||
Spare parts | 2,376 | 1,857 | |||||||||
Insurance receivable | — | 1,148 | |||||||||
Cash held by AMAK (see Note 6) | 1,877 | — | |||||||||
Other prepaid expenses and assets | 301 | 733 | |||||||||
Total | $ | 9,198 | $ | 4,947 |
Plant, pipeline and equipment include the following at December 31: | |||||||||||
2020 | 2019 | ||||||||||
(thousands of dollars) | |||||||||||
Platinum catalyst | $ | 1,580 | $ | 1,580 | |||||||
Catalyst | 4,325 | 4,095 | |||||||||
Land | 5,428 | 5,428 | |||||||||
Plant, pipeline and equipment | 270,149 | 258,651 | |||||||||
Construction in progress | 6,422 | 5,052 | |||||||||
Total plant, pipeline and equipment | 287,904 | 274,806 | |||||||||
Less accumulated depreciation | (100,800) | (85,887) | |||||||||
Net plant, pipeline and equipment | $ | 187,104 | $ | 188,919 |
December 31, | ||||||||||||||
($ in thousands) | Classification in the Consolidated Statements of Operations | 2020 | 2019 | 2018 | ||||||||||
Operating lease cost (a) | Cost of sales, exclusive of depreciation and amortization | $ | 4,088 | $ | 4,361 | $ | — | |||||||
Operating lease cost (a) | Selling, general and administrative | 137 | 137 | — | ||||||||||
Total operating lease cost | $ | 4,225 | $ | 4,498 | $ | — | ||||||||
Finance lease cost: | ||||||||||||||
Amortization of right-of-use assets | Depreciation | — | — | — | ||||||||||
Interest on lease liabilities | Interest Expense | — | — | — | ||||||||||
Total finance lease cost | $ | — | $ | — | $ | — | ||||||||
Total lease cost | $ | 4,225 | $ | 4,498 | $ | — | ||||||||
(a) Short-term lease costs were approximately $0.5 million, $0.1 million and nil as of December 31, 2020, 2019 and 2018, respectively.
|
December 31, | ||||||||||||||
($ in thousands) | Classification on the Consolidated Balance Sheets | 2020 | 2019 | |||||||||||
Assets: | ||||||||||||||
Operating | Operating lease assets | $ | 10,528 | $ | 13,512 | |||||||||
Finance | Property, plant, and equipment | — | — | |||||||||||
Total leased assets | $ | 10,528 | $ | 13,512 | ||||||||||
Liabilities: | ||||||||||||||
Current | ||||||||||||||
Operating | Current portion of operating lease liabilities | $ | 3,195 | $ | 3,174 | |||||||||
Finance | Short-term debt and current portion of long-term debt | — | — | |||||||||||
Noncurrent | ||||||||||||||
Operating | Operating lease liabilities | 7,333 | 10,338 | |||||||||||
Finance | Long-term debt | — | — | |||||||||||
Total lease liabilities | $ | 10,528 | $ | 13,512 |
December 31, | |||||||||||||||||
($ in thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
Operating cash flows used for operating leases | $ | 3,713 | $ | 4,389 | $ | — | |||||||||||
Operating cash flows used for finance leases | — | — | — | ||||||||||||||
Financing cash flows used for finance leases | — | — | — | ||||||||||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
Operating leases | $ | 206 | $ | 81 | $ | — | |||||||||||
Finance leases | — | — | — |
December 31, | ||||||||
2020 | 2019 | |||||||
Weighted-average remaining lease term (in years): | ||||||||
Operating leases | 3.7 | 4.5 | ||||||
Finance leases | 0.0 | 0.0 | ||||||
Weighted-average discount rate: | ||||||||
Operating leases | 4.5 | % | 4.5 | % | ||||
Finance leases | — | % | — | % |
($ in thousands) | Operating Leases | Finance Leases | ||||||
2020 | $ | 3,590 | $ | — | ||||
2021 | 3,268 | — | ||||||
2022 | 2,376 | — | ||||||
2023 | 1,062 | — | ||||||
2024 | 991 | — | ||||||
Thereafter | 117 | — | ||||||
Total lease payments | $ | 11,404 | $ | — | ||||
Less: Interest | 876 | — | ||||||
Total lease obligations | $ | 10,528 | $ | — |
December 31, 2020 | |||||||||||||||||
Intangible assets subject to amortization
(Definite-lived) |
Gross |
Accumulated
Amortization |
Net | ||||||||||||||
Customer relationships | $ | 16,852 | $ | (7,022) | $ | 9,830 | |||||||||||
Non-compete agreements | 94 | (94) | — | ||||||||||||||
Licenses and permits | 1,471 | (707) | 764 | ||||||||||||||
Developed technology | 6,131 | (3,832) | 2,299 | ||||||||||||||
Total | $ | 24,548 | $ | (11,655) | $ | 12,893 |
December 31, 2019 | |||||||||||||||||
Intangible assets subject to amortization
(Definite-lived) |
Gross |
Accumulated
Amortization |
Net | ||||||||||||||
Customer relationships | $ | 16,852 | $ | (5,898) | $ | 10,954 | |||||||||||
Non-compete agreements | 94 | (94) | — | ||||||||||||||
Licenses and permits | 1,471 | (601) | 870 | ||||||||||||||
Developed technology | 6,131 | (3,219) | 2,912 | ||||||||||||||
Total | $ | 24,548 | $ | (9,812) | $ | 14,736 |
Total | 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | |||||||||||||||||||||||||||||||||||
Customer relationships | $ | 9,830 | $ | 1,123 | $ | 1,123 | $ | 1,123 | $ | 1,123 | $ | 1,123 | $ | 4,215 | |||||||||||||||||||||||||||
Licenses and permits | 764 | 101 | 86 | 86 | 86 | 86 | 319 | ||||||||||||||||||||||||||||||||||
Developed technology | 2,299 | 613 | 613 | 613 | 460 | — | — | ||||||||||||||||||||||||||||||||||
Total future amortization expense | $ | 12,893 | $ | 1,837 | $ | 1,822 | $ | 1,822 | $ | 1,669 | $ | 1,209 | $ | 4,534 |
Accrued liabilities at December 31 are summarized as follows: | |||||||||||
2020 | 2019 | ||||||||||
(thousands of dollars) | |||||||||||
Accrued state taxes | $ | 125 | $ | — | |||||||
Accrued payroll | 2,282 | 1,250 | |||||||||
Accrued royalties | 260 | 273 | |||||||||
Accrued officer compensation | 1,053 | 1,687 | |||||||||
Accrued professional expenses | 559 | 1,000 | |||||||||
Accrued foreign taxes | 1,054 | — | |||||||||
Other liabilities | 1,524 | 1,532 | |||||||||
Total | $ | 6,857 | $ | 5,742 |
2020 | 2019 | 2018 | |||||||||||||||
(thousands of dollars) | |||||||||||||||||
Income taxes at U.S. statutory rate | $ | 211 | $ | (3,455) | $ | (661) | |||||||||||
State taxes, net of federal benefit | 71 | 256 | 234 | ||||||||||||||
Net operating loss carryback | (4,655) | — | — | ||||||||||||||
Research and development credits | (518) | (203) | (263) | ||||||||||||||
Permanent and other items | 928 | (164) | 44 | ||||||||||||||
Total tax expense (benefit) | $ | (3,963) | $ | (3,566) | $ | (646) |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(thousands of dollars) | |||||||||||
Deferred tax liabilities: | |||||||||||
Plant, pipeline and equipment | $ | (31,119) | $ | (29,227) | |||||||
Other assets | (31) | (32) | |||||||||
Operating lease asset | (2,211) | (2,838) | |||||||||
Total deferred tax liabilities | $ | (33,361) | $ | (32,097) | |||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforward | — | 11,685 | |||||||||
Intangible assets | 3,396 | 3,699 | |||||||||
Operating lease liability | 2,211 | 2,838 | |||||||||
Stock-based compensation | 956 | 1,093 | |||||||||
Investment in AMAK | — | 589 | |||||||||
Accounts receivable | 65 | 240 | |||||||||
Mineral interests | 226 | 226 | |||||||||
Interest expense carryforward | — | 211 | |||||||||
General business credit | — | 140 | |||||||||
Inventory | 146 | 111 | |||||||||
Post-retirement benefits | 70 | 71 | |||||||||
Charitable contributions | — | 45 | |||||||||
Gross deferred tax assets | 7,070 | 20,948 | |||||||||
Valuation allowance | (226) | (226) | |||||||||
Total net deferred tax assets | $ | 6,844 | $ | 20,722 | |||||||
Net deferred tax liabilities | $ | (26,517) | $ | (11,375) |
Year Ended December 31, 2020 | |||||||||||||||||||||||
Specialty Petrochemicals | Specialty Waxes | Corporate | Consolidated | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net revenues | $ | 172,350 | $ | 36,276 | $ | — | $ | 208,626 | |||||||||||||||
Operating income (loss) before depreciation and amortization | 26,438 | 1,762 | (9,114) | 19,086 | |||||||||||||||||||
Operating income (loss) | 15,827 | (3,760) | (9,129) | 2,938 | |||||||||||||||||||
Income (loss) from continuing operations before taxes | 13,294 | (3,606) | (8,685) | 1,003 | |||||||||||||||||||
Depreciation and amortization | 10,611 | 5,522 | 16 | 16,149 | |||||||||||||||||||
Capital expenditures | 11,334 | 2,017 | — | 13,351 |
Year Ended December 31, 2020 | |||||||||||||||||||||||||||||
Specialty Petrochemicals | Specialty Waxes | Corporate | Eliminations | Consolidated | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Intangible assets, net | $ | — | $ | 12,893 | $ | — | $ | — | $ | 12,893 | |||||||||||||||||||
Total assets | 298,198 | 83,108 | 127,260 | (191,733) | 316,833 |
Year Ended December 31, 2019 | |||||||||||||||||||||||
Specialty Petrochemicals | Specialty Waxes | Corporate | Consolidated | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net revenues | $ | 224,311 | $ | 34,648 | $ | — | $ | 258,959 | |||||||||||||||
Operating income (loss) before depreciation and amortization | 38,860 | (24,333) | (9,190) | 5,337 | |||||||||||||||||||
Operating income (loss) | 28,304 | (29,925) | (9,242) | (10,863) | |||||||||||||||||||
Income (loss) from continuing operations before taxes | 23,993 | (31,164) | (9,279) | (16,450) | |||||||||||||||||||
Depreciation and amortization | 10,556 | 5,593 | 52 | 16,201 | |||||||||||||||||||
Capital expenditures | 6,955 | 3,124 | — | 10,079 |
Year Ended December 31, 2019 | |||||||||||||||||||||||||||||
Specialty Petrochemicals | Specialty Waxes | Corporate | Eliminations | Consolidated | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Intangible assets, net | $ | — | $ | 14,736 | $ | — | $ | — | $ | 14,736 | |||||||||||||||||||
Total assets | 289,546 | 88,245 | 90,203 | (166,175) | 301,819 |
Year ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(thousands of dollars, except per share amounts) | |||||||||||||||||
Net Income per Common Share - Continuing Operations
|
|||||||||||||||||
Net income (loss) from continuing operations | $ | 4,966 | $ | (12,884) | $ | (1,728) | |||||||||||
Basic income (loss) from continuing operations per common share: | |||||||||||||||||
Weighted average shares outstanding | 24,802 | 24,698 | 24,438 | ||||||||||||||
Per share amount (dollars) | $ | 0.20 | $ | (0.52) | $ | (0.07) | |||||||||||
Diluted income (loss) from continuing operations per common share: | |||||||||||||||||
Weighted average shares outstanding | 25,356 | 24,698 | 24,438 | ||||||||||||||
Per share amount (dollars) | $ | 0.20 | $ | (0.52) | $ | (0.07) | |||||||||||
Weighted average shares-denominator
basic computation |
24,802 | 24,698 | 24,438 | ||||||||||||||
Unvested restricted stock unit grant | 554 | — | — | ||||||||||||||
Weighted average shares, as adjusted
denominator diluted computation |
25,356 | 24,698 | 24,438 | ||||||||||||||
Net Income per Common Share - Discontinued Operations | |||||||||||||||||
Net income (loss) from discontinued operations | $ | 26,209 | $ | (2,090) | $ | (604) | |||||||||||
Basic income (loss) from discontinued operations per common share: | |||||||||||||||||
Weighted average shares outstanding | 24,802 | 24,698 | 24,438 | ||||||||||||||
Per share amount (dollars) | $ | 1.06 | $ | (0.08) | $ | (0.02) | |||||||||||
Diluted income (loss) from discontinued operations per common share: | |||||||||||||||||
Weighted average shares outstanding | 25,356 | 24,698 | 24,438 | ||||||||||||||
Per share amount (dollars) | $ | 1.03 | $ | (0.08) | $ | (0.02) | |||||||||||
Weighted average shares-denominator
basic computation |
24,802 | 24,698 | 24,438 | ||||||||||||||
Unvested restricted stock unit grant | 554 | — | — | ||||||||||||||
Weighted average shares, as adjusted
denominator diluted computation |
25,356 | 24,698 | 24,438 | ||||||||||||||
Net Income per Common Share | |||||||||||||||||
Net income (loss) | $ | 31,175 | $ | (14,974) | $ | (2,332) | |||||||||||
Basic income (loss) per common share: | |||||||||||||||||
Weighted average shares outstanding | 24,802 | 24,698 | 24,438 | ||||||||||||||
Per share amount (dollars) | $ | 1.26 | $ | (0.61) | $ | (0.10) | |||||||||||
Diluted income (loss) per common share: | |||||||||||||||||
Weighted average shares outstanding | 25,356 | 24,698 | 24,438 | ||||||||||||||
Per share amount (dollars) | $ | 1.23 | $ | (0.61) | $ | (0.10) | |||||||||||
Weighted average shares-denominator
basic computation |
24,802 | 24,698 | 24,438 | ||||||||||||||
Unvested restricted stock unit grant | 554 | — | — | ||||||||||||||
Effect of dilutive stock options | — | — | — | ||||||||||||||
Weighted average shares, as adjusted
denominator diluted computation |
25,356 | 24,698 | 24,438 |
Year Ended December 31, 2020 | |||||||||||||||||||||||||||||
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Total | |||||||||||||||||||||||||
Revenues | $ | 62,067 | $ | 40,674 | $ | 47,747 | $ | 58,138 | $ | 208,626 | |||||||||||||||||||
Gross profit | 8,078 | 6,167 | 8,457 | 5,976 | 28,678 | ||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 5,863 | $ | (1,859) | $ | 1,108 | $ | (146) | $ | 4,966 | |||||||||||||||||||
Net income (loss) from discontinued operations, net of tax | 4,857 | (2) | 21,324 | 30 | 26,209 | ||||||||||||||||||||||||
Net income (loss) | 10,720 | (1,861) | 22,432 | (116) | 31,175 | ||||||||||||||||||||||||
Basic EPS (1) from continuing operations | $ | 0.24 | $ | (0.07) | $ | 0.04 | $ | (0.01) | $ | 0.20 | |||||||||||||||||||
Basic EPS (1) from discontinued operations | 0.20 | — | 0.86 | — | 1.06 | ||||||||||||||||||||||||
Basic EPS (1) | 0.44 | (0.07) | 0.90 | (0.01) | 1.26 | ||||||||||||||||||||||||
Diluted EPS (1) from continuing operations | $ | 0.23 | $ | (0.07) | $ | 0.04 | $ | (0.01) | $ | 0.20 | |||||||||||||||||||
Diluted EPS (1) from discontinued operations | 0.19 | — | 0.84 | — | 1.03 | ||||||||||||||||||||||||
Diluted EPS (1) | 0.42 | (0.07) | 0.88 | (0.01) | 1.23 |
Year Ended December 31, 2019 | |||||||||||||||||||||||||||||
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Total | |||||||||||||||||||||||||
Revenues | $ | 65,155 | $ | 69,371 | $ | 62,715 | $ | 61,718 | $ | 258,959 | |||||||||||||||||||
Gross profit | 10,073 | 10,565 | 9,567 | 8,310 | 38,515 | ||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 1,797 | $ | 2,476 | $ | 1,583 | $ | (18,740) | $ | (12,884) | |||||||||||||||||||
Net income (loss) from discontinued operations, net of tax | (46) | (72) | (1,002) | (970) | (2,090) | ||||||||||||||||||||||||
Net income (loss) | 1,751 | 2,404 | 581 | (19,710) | (14,974) | ||||||||||||||||||||||||
Basic EPS (1) from continuing operations | $ | 0.07 | $ | 0.10 | $ | 0.06 | $ | (0.76) | $ | (0.52) | |||||||||||||||||||
Basic EPS (1) from discontinued operations | — | — | (0.04) | (0.04) | (0.08) | ||||||||||||||||||||||||
Basic EPS (1) | 0.07 | 0.10 | 0.02 | (0.80) | (0.61) | ||||||||||||||||||||||||
Diluted EPS (1) from continuing operations | $ | 0.07 | $ | 0.10 | $ | 0.06 | $ | (0.76) | $ | (0.52) | |||||||||||||||||||
Diluted EPS (1) from discontinued operations | — | — | (0.04) | (0.04) | (0.08) | ||||||||||||||||||||||||
Diluted EPS (1) | 0.07 | 0.10 | 0.02 | (0.80) | (0.61) |
Description |
Beginning
balance |
Charged
(credited) to earnings |
Deductions |
Ending
balance |
||||||||||||||||||||||
ALLOWANCE FOR DEFERRED
TAX ASSET |
||||||||||||||||||||||||||
December 31, 2018 | 225,622 | — | — | 225,622 | ||||||||||||||||||||||
December 31, 2019 | 225,622 | — | — | 225,622 | ||||||||||||||||||||||
December 31, 2020 | 225,622 | — | — | 225,622 |
Description |
Beginning
balance |
Charged
to earnings |
Deductions |
Ending
balance |
||||||||||||||||||||||
ALLOWANCE FOR DOUBTFUL
ACCOUNTS |
||||||||||||||||||||||||||
December 31, 2018 | 300,000 | 152,000 | — | 452,000 | ||||||||||||||||||||||
December 31, 2019 | 452,000 | (23,000) | — | 429,000 | ||||||||||||||||||||||
December 31, 2020 | 429,000 | — | (129,000) | 300,000 |
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September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
(Expressed in Saudi Riyals) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | 29,452,821 | 52,244,794 | |||||||||
Restricted cash (Note 1) | 7,935,905 | — | |||||||||
Accounts receivable, net | 8,688,925 | 29,643,472 | |||||||||
Inventories | 45,017,824 | 35,277,340 | |||||||||
Advances to shareholders (Note 1) | — | 2,859,341 | |||||||||
Advances to contractors and other | 20,650,315 | 50,053,018 | |||||||||
Total current assets | 111,745,790 | 170,077,965 | |||||||||
Non-current assets: | |||||||||||
Property and equipment, net | 683,014,705 | 610,634,432 | |||||||||
Development costs, net | 98,939,725 | 121,267,664 | |||||||||
Deferred mine closure costs | 4,849,249 | 5,211,505 | |||||||||
Total non-current assets | 786,803,679 | 737,113,601 | |||||||||
898,549,469 | 907,191,566 | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities | 38,499,280 | 40,418,619 | |||||||||
Zakat and income tax liability | 14,966,681 | 10,932,026 | |||||||||
Capital lease obligation, current portion | 2,479,480 | 2,318,301 | |||||||||
Long-term debt, current portion | 97,500,000 | 50,000,000 | |||||||||
Total current liabilities | 153,445,441 | 103,668,946 | |||||||||
Non-current liabilities | |||||||||||
Provision for mine closure costs | 17,030,905 | 16,625,347 | |||||||||
Capital lease obligation, net of current portion | 2,022,518 | 3,898,002 | |||||||||
Long-term debt, net of current portion and | |||||||||||
deferred finance costs | 271,626,947 | 267,933,847 | |||||||||
End-of-service indemnities | 6,029,921 | 4,880,892 | |||||||||
Deferred income taxes | — | 4,217,658 | |||||||||
Total non-current liabilities | 296,710,291 | 297,555,746 |
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
(Expressed in Saudi Riyals) | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Shareholders' equity | |||||||||||
Share capital | 820,000,000 | 820,000,000 | |||||||||
Share premium | (131,808,900) | (74,713,350) | |||||||||
Accumulated deficit | (239,797,363) | (239,319,776) | |||||||||
Total shareholders' equity | 448,393,737 | 505,966,874 | |||||||||
898,549,469 | 907,191,566 |
2020 | 2019 | 2018 | |||||||||||||||
(Expressed in Saudi Riyals) | |||||||||||||||||
Revenues | 234,872,562 | 293,811,329 | 263,377,273 | ||||||||||||||
Costs of revenues | 208,980,004 | 279,645,705 | 255,313,296 | ||||||||||||||
Operating income | 25,892,558 | 14,165,624 | 8,063,977 | ||||||||||||||
General and administrative expenses | 18,693,047 | 30,355,423 | 29,475,998 | ||||||||||||||
Income (loss) from operations | 7,199,511 | (16,189,799) | (21,412,021) | ||||||||||||||
Other income (expense) | |||||||||||||||||
Finance charges | (4,539,975) | (5,436,532) | (5,969,821) | ||||||||||||||
Other income (expense) (Note 1) | (1,300,258) | 2,091,152 | 323,575 | ||||||||||||||
(5,840,233) | (3,345,380) | (5,646,246) | |||||||||||||||
Income (loss )before Zakat and income tax | 1,359,278 | (19,535,179) | (27,058,267) | ||||||||||||||
Zakat and income tax (expense) benefit | (1,836,865) | (6,751,156) | 1,824,929 | ||||||||||||||
Net loss | (477,587) | (26,286,335) | (25,233,338) |
(Expressed in Saudi Riyals) | |||||||||||||||||||||||||||||
Retained | |||||||||||||||||||||||||||||
Earnings | |||||||||||||||||||||||||||||
Share | Share | Treasury | (Accumulated | ||||||||||||||||||||||||||
Capital | Premium | Stock at cost | Deficit) | Total | |||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
Share repurchase (Note 1) | — | — | (74,713,350) | — | (74,713,350) | ||||||||||||||||||||||||
Net loss | — | — | — | (26,286,335) | (26,286,335) | ||||||||||||||||||||||||
Balance at December 31, 2019 | 820,000,000 | — | (74,713,350) | (239,319,776) | 505,966,874 | ||||||||||||||||||||||||
Share repurchase (Note 1) | — | — | (57,095,550) | — | (57,095,550) | ||||||||||||||||||||||||
Net loss | — | — | — | (477,587) | (477,587) | ||||||||||||||||||||||||
Balance at September 30, 2020 | 820,000,000 | — | (131,808,900) | (239,797,363) | 448,393,737 |
2020 | 2019 | 2018 | |||||||||||||||
(Expressed in Saudi Riyals) | |||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net loss | (477,587) | (26,286,335) | (25,233,338) | ||||||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||||||||
Depreciation and amortization | 77,148,251 | 113,949,259 | 125,507,864 | ||||||||||||||
Accretion of deferred mine closure costs | 405,558 | 562,211 | 543,198 | ||||||||||||||
Amortization of deferred finance costs | 1,193,100 | 1,675,135 | 2,175,902 | ||||||||||||||
Deferred income taxes | (4,217,658) | 424,873 | (7,224,929) | ||||||||||||||
Forfeiture of non-refundable deposit | 1,429,670 | — | — | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivable | 20,954,547 | (13,408,437) | (8,021,219) | ||||||||||||||
Inventories | (9,740,484) | 10,593,780 | (18,644,188) | ||||||||||||||
Advances to contractors and other | 29,402,704 | (30,884,252) | 563,016 | ||||||||||||||
Accounts payable and accrued liabilities | (1,919,339) | 11,661,674 | 6,084,327 | ||||||||||||||
Zakat and income tax liability | 4,034,655 | 5,532,026 | 1,883,327 | ||||||||||||||
End-of-service indemnities | 1,149,029 | 1,231,003 | 1,131,360 | ||||||||||||||
Net cash provided by operating activities | 119,362,446 | 75,050,937 | 78,765,320 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Additions to property and equipment | (126,838,330) | (48,246,282) | (28,945,309) | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Issuance of share capital and premium | — | — | 2,453,580 | ||||||||||||||
Payments on capital lease obligations | (1,714,305) | (1,059,694) | (72,788) | ||||||||||||||
Repurchase of treasury stock | (55,665,879) | (22,151,322) | — | ||||||||||||||
Borrowings from long-term debt | 50,000,000 | 50,000,000 | — | ||||||||||||||
Payments on long-term debt | — | (30,000,000) | — | ||||||||||||||
Net advances to shareholders | — | (2,859,341) | (53,015,844) | ||||||||||||||
Net cash used in financing activities | (7,380,184) | (6,070,357) | (50,635,052) | ||||||||||||||
Increase (decrease) in cash and cash equivalents and restricted cash | (14,856,068) | 20,734,298 | (815,041) | ||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 52,244,794 | 31,510,496 | 32,325,537 | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | 37,388,726 | 52,244,794 | 31,510,496 | ||||||||||||||
Supplemental cash flow information | |||||||||||||||||
Cash paid for interest | 3,346,875 | 4,428,545 | 3,927,778 | ||||||||||||||
Cash paid for Zakat and income tax | 2,019,868 | 6,086,073 | 3,212,813 | ||||||||||||||
Supplemental disclosure of non-cash items | |||||||||||||||||
Assets acquired through capital lease obligations | — | 7,933,140 | 625,805 | ||||||||||||||
Advances to shareholders applied to treasury stock purchase | 1,429,671 | 52,562,028 | — |
As of September 30, 2020, our ownership is as follows: | |||||||||||
Shares |
Ownership
Percentage |
||||||||||
Saudi shareholders | 53,936,081 | 73.1 | |||||||||
ARMICO (Pan Arab Organization) | 19,502,500 | 26.4 | |||||||||
Other | 361,419 | 0.5 | |||||||||
73,800,000 | 100.0 |
Inventories consisted of the following at:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Stockpile ore | 15,623,461 | 18,657,218 | |||||||||
Ore concentrates | 20,557,020 | 6,294,948 | |||||||||
Precious metal dore | 2,235,799 | 4,490,589 | |||||||||
Explosives | 484,169 | 326,599 | |||||||||
Chemicals and other | 6,117,375 | 5,507,986 | |||||||||
45,017,824 | 35,277,340 |
Advances to contractors and other consisted of the following at:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Advances to contractors | 13,668,562 | 42,672,136 | |||||||||
Prepaid expenses | 2,251,667 | 5,185,037 | |||||||||
Other miscellaneous advances and receivables | 4,730,086 | 2,195,845 | |||||||||
20,650,315 | 50,053,018 |
Property and equipment, net consisted of the following at:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Buildings | 191,974,662 | 191,838,962 | |||||||||
Leasehold improvements | 4,051,062 | 1,838,317 | |||||||||
Heavy equipment | 146,801,861 | 136,066,275 | |||||||||
Motor vehicles | 22,753,563 | 22,467,300 | |||||||||
Civil works | 16,288,221 | 16,288,221 | |||||||||
Tailings dam | 23,900,160 | 23,900,160 | |||||||||
Plant and machinery | 332,014,825 | 326,974,958 | |||||||||
Mining assets – rehabilitation costs | 98,894,826 | 98,894,826 | |||||||||
Mining assets – underground development costs | 409,899,633 | 299,224,519 | |||||||||
Construction in progress | 3,356,625 | 4,789,313 | |||||||||
1,249,935,438 | 1,122,282,851 | ||||||||||
Less accumulated depreciation, depletion and amortization | (566,920,733) | (511,648,419) | |||||||||
683,014,705 | 610,634,432 |
Development costs, net consisted of the following at:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Cost | 289,973,237 | 289,973,237 | |||||||||
Accumulated amortization | (191,033,512) | (168,705,573) | |||||||||
98,939,725 | 121,267,664 |
Accounts payable and accrued liabilities consisted of the following at:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Accounts payable and accrued liabilities | 33,012,537 | 36,571,709 | |||||||||
Accrued salaries and payroll | 5,486,743 | 3,846,910 | |||||||||
38,499,280 | 40,418,619 |
Long-term debts are summarized as follows at:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
SIDF | 275,000,000 | 275,000,000 | |||||||||
BSF | 100,000,000 | 50,000,000 | |||||||||
Deferred finance charges | (5,873,053) | (7,066,153) | |||||||||
Total debt | 369,126,947 | 317,933,847 | |||||||||
Less current portion | 97,500,000 | 50,000,000 | |||||||||
Total long-term debt, less current portion | 271,626,947 | 267,933,847 |
Years Ending
December 31, |
|||||
2020 | 50,000,000 | ||||
2021 | 86,666,668 | ||||
2022 | 91,666,668 | ||||
2023 | 96,666,664 | ||||
2024 | 50,000,000 | ||||
375,000,000 |
The change in the end-of-service indemnities provision is as follows:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Balance, beginning of period | 4,880,892 | 3,649,889 | |||||||||
Provision | 2,198,461 | 2,208,156 | |||||||||
Paid | (1,049,432) | (977,153) | |||||||||
Balance, end of period | 6,029,921 | 4,880,892 |
Deferred mine closure costs consisted of the following at:
|
|||||||||||
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Cost | 12,842,625 | 12,842,625 | |||||||||
Accumulated amortization | (7,993,376) | (7,631,120) | |||||||||
4,849,249 | 5,211,505 |
A summary of changes in our provision for mine closure costs is as follows:
|
|||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Balance, beginning of period | 16,625,347 | 16,063,136 | 15,519,938 | ||||||||||||||
Accretion expense | 405,558 | 562,211 | 543,198 | ||||||||||||||
Balance, end of period | 17,030,905 | 16,625,347 | 16,063,136 |
A summary of general and administrative expenses is as follows:
|
|||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Wages, salaries and related costs | 7,823,013 | 18,701,126 | 17,036,965 | ||||||||||||||
Mine closure and environmental | 767,814 | 1,306,705 | 1,287,698 | ||||||||||||||
Office expenses and other | 6,494,431 | 8,831,910 | 9,287,218 | ||||||||||||||
Travel and accommodation | 85,721 | 27,182 | 593,046 | ||||||||||||||
Professional fees | 3,522,068 | 1,488,500 | 1,271,071 | ||||||||||||||
18,693,047 | 30,355,423 | 29,475,998 |
Years Ending
December 31, |
|||||
2020 | 247,500 | ||||
2021 | 990,000 | ||||
2022 | 990,000 | ||||
2023 | 550,000 | ||||
2024 | 550,000 | ||||
2025 | 110,000 | ||||
Thereafter | 990,000 | ||||
4,427,500 |
2020 | 723,727 | ||||
2021 | 2,791,921 | ||||
2022 | 1,482,543 | ||||
Total minimum lease payments | 4,998,191 | ||||
Less deferred financial charges | (496,193) | ||||
Total capital lease obligations | 4,501,998 | ||||
Less: current portion of capital lease obligations | 2,479,480 | ||||
Total long term portion, net current portion | 2,022,518 |
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). |