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Full year fiscal 2009 revenues and Adjusted EBITDA were $1,376.9 million and $40.3 million, respectively, versus comparable fiscal 2008 revenues and Adjusted EBITDA of $2,016.2 million and $103.5 million, respectively. A net loss of $22.8 million, or $1.29 per diluted share, for 2009 compares to net income of $26.6 million, or $1.47 per diluted share, for 2008.
Charlie Shaver, President and CEO, commented, "We are pleased with the improvements in our fiscal 2009 fourth quarter results considering the difficult market and economic conditions in which we have operated over the past year. Our fourth quarter results reflect the impact of improved sales volume and margins compared to the prior two quarters. We anticipate gradual improvement in the economy over the coming months and we will continue to be focused on taking costs out where appropriate and holding to our baseline capital spending, investing primarily in operational reliability."
Fiscal Fourth Quarter and Full Year 2009 Highlights:
-- In the fourth quarter we announced plans to enhance profitability and
cash flow by $25 million annually by implementing a combination of cost
reduction and profit improvement initiatives during the remainder of
calendar year 2009 to offset lower contract feedstock and sales volumes
in light of the current economic environment. These actions included
the idling of certain crude C4 processing capability in both Houston and
Port Neches and the acquisition of additional crude C4 streams to our
portfolio, both of which have been accomplished.
-- The improvement in demand and stability in the selling prices that we
saw during the third quarter continued through the fourth quarter and
all of our manufacturing facilities were able to maintain efficient
production rates throughout the quarter.
-- Fourth quarter operating cash flow was a positive $27.9 million, which
reflects our continued focus on working capital and allowed us to pay
off the balance on our revolving credit facility and end the year with
$6.6 million of cash on hand.
-- Crude C4 supply increased significantly during the fourth quarter
compared to the prior two quarters of fiscal 2009.
-- We safely completed two major scheduled plant turnarounds at our Houston
facility, one in the first quarter and the other in the fourth quarter.
-- Capital spending in fiscal 2009 was $16.1 million, which reflects
completion of our major initiatives and a return to our baseline capital
requirements.
-- During the fourth quarter we realized a partial business interruption
insurance recovery of $10.0 million related to the significant negative
impact from Hurricane Ike on our fiscal first and second quarter
operations and financial results. We are continuing to work with our
insurers on our business interruption claim, but at this time are unable
to quantify the likelihood and amount of any additional recoveries.
-- We incurred expenses of $4.4 million in fiscal 2009 related to hurricane
damages.
-- During the third quarter we recovered $4.7 million of prior years'
fraudulent freight payments. Any further recoveries are uncertain at
this time, but any such recoveries are not expected to be significant.
-- In the first quarter we completed and successfully commissioned a new
polyisobutylene plant at our Houston site, which completed the capital
expansion program that was undertaken in 2007.
Results of Operations
The financial statements and segment information provided at the end of this press release should be referred to when reading the discussion of our fourth quarter and year-to-date operating results provided below.
Fourth Quarter of Fiscal 2009 versus Fourth Quarter of Fiscal 2008
Revenues
Fiscal 2009 fourth quarter revenues were $260.9 million compared to prior year fourth quarter revenues of $558.2 million. The $297.3 million, or 53%, decline in revenues is due primarily to the negative impact of significantly lower average selling prices, reflecting average fuel related prices that were approximately half of what they were a year earlier. The decrease in revenues also reflects the impact of 3% lower total sales volume. On a segment basis, the overall decrease in revenues consists of lower revenues for the C4 Processing and Performance Products segments of $209.3 million and $88.0 million, respectively.
Adjusted EBITDA
Fiscal 2009 fourth quarter Adjusted EBITDA of $33.7 million compares to Adjusted EBITDA of $36.5 million for the comparable prior year quarter. The primary components of the overall decrease of $2.8 million are lower gross profit of $14.8 million and a $10.0 million partial business interruption insurance recovery related to Hurricane Ike. On a segment basis, the overall decrease reflects lower Adjusted EBITDA for the Performance Products segment of $9.1 million partially offset by higher Adjusted EBITDA for the C4 Processing segment of $4.7 million, including the insurance recovery, and lower Corporate and other expenses of $1.6 million.
Fourth Quarter of Fiscal 2009 versus Third Quarter of Fiscal 2009
Revenues
Total revenues for the fourth quarter of fiscal 2009 of $260.9 million rose 60% from fiscal 2009 third quarter revenues of $162.6 million. The increase reflects the positive impacts of 37% higher sales volume and substantially higher average selling prices. The overall $98.3 million increase, on a segment basis, consists of increases for the C4 Processing and Performance Products segments of $86.4 million and $11.8 million, respectively. Sales volumes for the C4 Processing segment and the Performance Products segment were up 41% and 20%, respectively. Higher average selling prices had a significant positive impact on C4 Processing revenues while the impact on the Performance Products segment was negligible compared to the immediately preceding quarter.
Adjusted EBITDA
Adjusted EBITDA for the fourth quarter of fiscal 2009 increased to $33.7 million compared to Adjusted EBITDA of $5.4 million for the preceding quarter. The overall improvement of $28.3 million consists primarily of higher gross profit of $26.5 million, the business interruption insurance proceeds of $10.0 million, partially offset by higher operating expenses of $3.8 million and the impact of a recovery of fraudulent freight payments in the previous quarter of $4.7 million. On a segment basis, the overall increase reflects higher Adjusted EBITDA for the C4 Processing segment of $29.7 million, offset somewhat by lower Adjusted EBITDA for the Performance Products segment of $1.7 million and slightly lower Corporate and other expenses. The business interruption insurance proceeds in the fourth quarter as well as the recovery of fraudulent freight payments in the third quarter pertain to the C4 Processing segment.
Full Year Fiscal 2009 versus Full Year Fiscal 2008
Revenues
Fiscal 2009 revenues of $1,376.9 million decreased $639.3 million, or 32%, compared to fiscal 2008 revenues of $2,016.2 million. The decline is due to a combination of 24% lower overall sales volume as well as lower average selling prices. The lower average selling prices in fiscal 2009 reflect substantially lower average fuel related prices. On a segment basis, the overall decrease consists of lower revenues for the C4 Processing and Performance Products segments of $421.8 million and $151.4 million, respectively, as well as the absence of Non-core MTBE revenues in fiscal 2009, which were $66.2 million in the prior year.
Adjusted EBITDA
Adjusted EBITDA in fiscal 2009 was $40.3 million compared to $103.5 million in fiscal 2008. The primary components of the overall decrease of $63.2 million are lower gross profit of $81.3 million, partially offset by the partial business interruption insurance recovery related to Hurricane Ike of $10.0 million, the fraudulent freight payment recovery of $4.7 million, and lower general, administrative and other expenses of $4.0 million. On a segment basis, the overall decrease reflects lower Adjusted EBITDA for the C4 Processing and Performance Products segments of $45.2 million and $15.8 million, respectively, lower Corporate and other expenses of $4.0 million, and the absence of Non-core MTBE Adjusted EBITDA in fiscal 2009, which was $6.2 million in fiscal 2008.
Liquidity and Capital Resources
Net cash flow for the fiscal 2009 fourth quarter was $6.2 million. Cash from operating activities, including the insurance proceeds, was $27.9 million, partially offset by capital expenditures of $1.1 million and financing outflows of $20.6 million. The financing outflows primarily reflect repayment of revolver borrowings, which were $19.0 million at the beginning of the fourth quarter and zero as of June 30, 2009. Cash on hand at the end of the quarter was approximately $6.6 million.
Conference Call
The Company has scheduled a conference call for 9:30 a.m. Eastern Time (8:30 a.m. Central) on Friday, September 18, 2009. To listen to the call, dial (480) 629-9692 at least 10 minutes prior to the start time and ask for the Texas Petrochemicals call, or access it live over the Internet by logging on to the Company's web site at http://www.txpetrochem.com. For those unable to listen to the live call, a replay will be available through Friday, October 2, 2009 by calling (303) 590-3030 using pass code 4146923#. Also, an archive of the webcast will be available shortly after the call on the Company's web site for approximately 90 days.
To supplement the comments we make during the conference call, we have posted some slides on our web site on the Presentations and Webcasts page of the investor Center section.
Headquartered in Houston, Texas, Texas Petrochemicals Inc. sells products into a wide range of performance, specialty and intermediate markets, including synthetic rubber, fuel additives, plastics and detergents. The Company has manufacturing facilities in the industrial corridor adjacent to the Houston Ship Channel, Port Neches and Baytown, Texas and operates a product terminal in Lake Charles, Louisiana. For more information, visit the Company's web site at http://www.txpetrochem.com.
Cautionary Information Regarding Forward-Looking Statements
Certain oral and written information that the Company may make publicly available from time to time may constitute forward-looking statements. Such statements may relate to future operating results, existing and expected competition, financing and refinancing sources and availability, and plans related to strategic alternatives or future expansion activities and capital expenditures. Forward-looking statements involve a number of risks and uncertainties that may significantly affect the Company's liquidity and results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to, those related to effects of competition, leverage and debt service, financing and refinancing efforts, litigation and governmental investigations, environmental laws and regulations, general economic conditions and changes in laws or regulations.
Investor Relations
Contact: Robert Whitlow
Email: robert.whitlow@txpetrochem.com
Phone: 713-627-7474
Contact: Ruth Dreessen
Email: ruth.dreessen@txpetrochem.com
Phone: 713-627-7474
Media Relations
Contact: Sara Cronin
Email: sara.cronin@txpetrochem.com
Phone: 713-627-7474
- tables to follow -
TEXAS PETROCHEMICALS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
June 30, March 31, June 30,
2009 2009 2008
---- ---- ----
ASSETS
Current assets
Cash and cash
equivalents $6.6 $0.4 $0.6
Accounts receivable -
trade 98.5 77.3 200.5
Inventories 36.9 40.2 102.5
Other current assets 20.3 23.5 28.5
---- ---- ----
Total current assets 162.3 141.4 332.1
Property, plant and
equipment, net 516.3 528.3 546.0
Investment in limited
partnership 2.8 2.8 2.4
Intangible assets, net 6.0 6.0 4.4
Other assets, net 22.4 23.5 20.4
---- ---- ----
Total assets $709.8 $702.0 $905.3
====== ====== ======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable -
trade $86.7 $67.4 $218.6
Accrued liabilities 19.2 19.3 28.5
Current portion of
long-term debt 2.7 3.8 2.7
--- --- ---
Total current
liabilities 108.6 90.5 249.8
Long-term debt 269.9 289.5 294.4
Deferred income taxes 52.1 51.4 61.6
---- ---- ----
Total liabilities 430.6 431.4 605.8
Stockholders' equity 279.2 270.6 299.5
----- ----- -----
Total liabilities and
stockholders' equity $709.8 $702.0 $905.3
====== ====== ======
TEXAS PETROCHEMICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In millions, except per share amounts)
Three Months Ended Twelve Months
----------------------- Ended
June 30, March 31, June 30,
------------ --------- --------------
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Revenues $260.9 $558.2 $162.6 $1,376.9 $2,016.2
Cost of sales 198.7 481.2 127.0 1,194.2 1,752.2
----- ----- ----- ------- -------
Gross profit 62.2 77.0 35.6 182.7 264.0
Operating expenses 33.2 33.5 29.4 132.3 131.2
General and
administrative
expenses 7.4 9.0 7.3 32.7 36.7
Depreciation and
amortization 10.5 10.0 10.7 41.9 35.9
Loss on sale of
assets - - - - 1.1
Asset impairments 6.0 - - 6.0 -
Insurance
recoveries (10.0) - - (10.0) -
Unauthorized
freight payments - - (4.7) (4.7) 0.5
--- --- ---- ---- ---
Income (loss) from
operations 15.1 24.5 (7.1) (15.5) 58.6
Other (income) expense
Interest expense 3.7 4.3 3.9 16.9 19.1
Interest income - - - - (0.2)
Unrealized loss
(gain) on
derivatives (0.3) (0.3) (1.3) 3.7 (0.1)
Other, net (0.5) (0.3) (0.2) (1.6) (1.4)
---- ---- ---- ---- ----
Income (loss)
before income
taxes 12.2 20.8 (9.5) (34.5) 41.2
Income tax expense
(benefit) 4.4 6.9 (4.2) (11.7) 14.6
--- --- ---- ----- ----
Net income (loss) $7.8 $13.9 $(5.3) $(22.8) $26.6
==== ===== ===== ====== =====
Earnings per share:
Basic $0.44 $0.79 $(0.30) $(1.29) $1.51
Diluted $0.44 $0.77 $(0.30) $(1.29) $1.47
Weighted average
shares outstanding:
Basic 17.7 17.6 17.7 17.7 17.6
Diluted 17.7 18.1 17.7 17.7 18.1
TEXAS PETROCHEMICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In millions)
Three Months Ended Twelve Months
-------------------- Ended
June 30, March 31, June 30,
---------- --------- ----------
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Cash flows from
operating
activities $27.9 $40.2 $34.2 $50.2 $57.8
----- ----- ----- ----- -----
Cash flows from
investing
activities
Capital
expenditures (1.1) (18.0) (3.8) (16.1) (87.8)
Purchase of
business
assets - - - - (70.0)
Other
investing
activities
cash flows - - - - 1.5
--- --- --- --- ---
(1.1) (18.0) (3.8) (16.1) (156.3)
Cash flows from
financing
activities
Proceeds from
term loan
borrowings - - - - 70.0
Repayments on
term loans (0.7) (0.7) (0.7) (2.7) (2.6)
Net proceeds
from
(payments on)
revolving
credit
facility
borrowings (19.0) (21.6) (27.5) (21.8) 21.8
Repurchase of
common stock - - - (3.0) (0.3)
Other
financing
activities
cash flows (0.9) (0.4) (2.4) (0.6) 0.7
---- ---- ---- ---- ---
(20.6) (22.7) (30.6) (28.1) 89.6
Increase
(decrease) in
cash and cash
equivalents 6.2 (0.5) (0.2) 6.0 (8.9)
Cash and cash
equivalents at
beginning of
period 0.4 1.1 0.6 0.6 9.5
--- --- --- --- ---
Cash and cash
equivalents at
end of period $6.6 $0.6 $0.4 $6.6 $0.6
==== ==== ==== ==== ====
TEXAS PETROCHEMICALS, INC.
BUSINESS SEGMENT INFORMATION
(Unaudited) (In millions)
Three Months Ended Twelve Months
-------------------- Ended
June 30, March 31, June 30,
---------- --------- ----------
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Sales volumes (lbs)
C4 Processing 692.7 631.5 490.7 2,294.7 2,831.9
Performance Products 137.8 221.8 115.0 602.1 788.0
MTBE (1) - - - - 172.6
--- --- --- --- -----
830.5 853.3 605.7 2,896.8 3,792.5
===== ===== ===== ======= =======
Revenues
C4 Processing 205.6 414.9 119.1 1,062.0 1,483.7
Performance Products 55.3 143.3 43.5 314.9 466.4
MTBE (1) - - - - 66.1
--- --- --- --- -----
260.9 558.2 162.6 1,376.9 2,016.2
===== ===== ===== ======= =======
Cost of sales (2)
C4 Processing 154.5 358.3 93.8 940.8 1,306.7
Performance Products 44.2 122.9 33.2 253.4 386.3
MTBE (1) - - - - 59.2
--- --- --- --- -----
198.7 481.2 127.0 1,194.2 1,752.2
===== ===== ===== ======= =======
Adjusted EBITDA
C4 Processing $37.3 $32.7 $7.6 $37.4 $82.6
Performance Products 1.7 10.8 3.4 27.7 43.5
MTBE (1) - - - - 6.2
Corporate G&A and other (5.3) (7.0) (5.6) (24.8) (28.8)
---- ---- ---- ----- -----
$33.7 $36.5 $5.4 $40.3 $103.5
===== ===== ==== ===== ======
(1) As reported in the above table, the MTBE segment represents MTBE
produced by our Houston dehydrogenation units. In conjunction with
the start-up of our isobutylene processing unit in late first quarter
of fiscal 2008, the dehydrogenation units were idled and all MTBE
produced from those units was sold by the end of second quarter of
fiscal 2008. Beginning with third quarter of fiscal 2008, MTBE
production from crude C4 isobutylene is not significant and related
revenues and operating results are included in the C4 Processing
segment.
(2) Excludes depreciation and amortization and operating expenses.
TEXAS PETROCHEMICALS, INC.
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME
(Unaudited) (in millions)
Adjusted EBITDA, a non-GAAP financial measure, is presented and
discussed in this earnings release because management believes it
enhances understanding by investors and lenders of the Company's
financial performance. Adjusted EBITDA is the primary performance
measurement used by senior management and our Board of Directors to
evaluate operating results and to allocate capital resources between
our business segments.
A non-GAAP financial measure is a numerical measure of a company's
historical or future financial performance, financial position or
cash flows that excludes amounts, or is subject to adjustments that
have the effect of excluding amounts, that are included in the most
directly comparable measure calculated and presented in accordance with
GAAP in the statements of operations, balance sheets, or statements of
cash flows (or equivalent statements) of the Company; or includes
amounts, or is subject to adjustments that have the effect of including
amounts, that are excluded from the most directly comparable measure so
calculated and presented. In this regard GAAP refers to generally
accepted accounting principles in the United States. Provided below
is a reconciliation of Adjusted EBITDA (non-GAAP financial measure) to
net income (most directly comparable GAAP financial measure).
Three Months Ended Twelve Months
-------------------- Ended
June 30, March 31, June 30,
---------- --------- ----------
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Adjusted EBITDA
C4 processing $37.3 $32.7 $7.6 $37.4 $82.6
Performance products 1.7 10.8 3.4 27.7 43.5
MTBE - - - - 6.2
Corporate (5.3) (7.0) (5.6) (24.8) (28.8)
---- ---- ---- ----- -----
33.7 36.5 5.4 40.3 103.5
---- ---- --- ---- -----
Reconciliation
Income taxes (4.4) (6.9) 4.2 11.7 (14.6)
Interest expense, net (3.7) (4.3) (3.9) (16.9) (18.9)
Depreciation and amortization (10.5) (10.0) (10.7) (41.9) (35.9)
Loss on sale of assets - - - - (1.1)
Asset impairment (6.0) - - (6.0) -
Non-cash stock-based
compensation (1.6) (1.7) (1.6) (6.3) (6.5)
Unrealized (loss) gain on
derivatives 0.3 0.3 1.3 (3.7) 0.1
--- --- --- ---- ---
Net income (loss) $7.8 $13.9 $(5.3) $(22.8) $26.6
==== ===== ===== ====== =====
SOURCE Texas Petrochemicals, Inc.
http://www.txpetrochem.com
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