Arabian American Releases Fourth Quarter and Full Year 2012 Results

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Record Year for Revenue and Volume

Earnings Call today at 4:30pm ET

SUGAR LAND, Texas, March 7, 2013 /PRNewswire/ -- Arabian American Development Co. (NYSE:ARSD) released their financial results for the fourth quarter and full year ended December 31, 2012.

"We are happy to report record revenue and volume for 2012 and delighted with the progress made during the year by the Al Masane Al Kobra Mining Co. ("AMAK") mine which achieved important shipping and production milestones after years of development," said Nick Carter, President and Chief Executive Officer of Arabian American.  "While we exited 2012 waiting on customer orders, we are now seeing orders resume on pace to maximize the utilization of our capacity this calendar year. Combined with ongoing AMAK shipments of copper and zinc concentrate, we believe that we have good momentum moving into 2013."  

Mr. Carter continued, "There is a change to be noted in these financial statements that is important to the clarity of our information.  As we had mentioned in previous communications, based upon the receipt of accurate financial information for our investment in AMAK as of and for the years ended December 31, 2012, 2011 and 2010 and also our ability to significantly influence the operation of the company, we concluded in the fourth quarter of 2012 that our investment in AMAK should be presented using the equity method of accounting.  The investment had previously been presented using the cost method as of and for the years ended December 31, 2011 and 2010.  The 2011 financial statements, as set forth herein, have been adjusted to apply the change in accounting method retroactively.  We believe that now and going forward, this will present a more accurate picture of the value and performance of this investment"

Fourth Quarter and Full Year 2012 Highlights
Revenue for the quarter was $49.9 million, a 18.8% decrease from the fourth quarter of 2011, and an 8% sequential decrease as compared to the third quarter of 2012. Revenue for the full year was a record $223 million, a 11.7% increase from $200 million in 2011.

Volume for the quarter was 14.1 million gallons versus 16.9 million gallons for the same period of 2011, a decrease of 16.8%.  Full year volume was a record 63.6 million for 2012 compared to 54.3 million in 2011, a 17.1% increase. 

Gross profit for the quarter was $6.9 million compared to $10.2 million in 2011, a 32.0% decrease.  Gross profit for full year 2012 was $30.8 million compared to $25.9 million, an 18.7% increase.

Adjusted EBITDA for the fourth quarter was $3.7 million compared to $7.2 million for fourth quarter 2011.  Adjusted EBITDA for the full year 2012 was $20.9 million compared to $16.9 million for the full year 2011. 

Net income for the fourth quarter including our equity in AMAK was $2.9 million or $0.12 per share as compared to net income of $3.8 million or $0.16 per share in the fourth quarter of 2011. Net income including our equity in earnings from AMAK for the full year was $11.4 million or $0.46 per diluted share as compared to net income of $13.9 million or $0.57 per diluted share in the prior year.  The change in accounting method for AMAK increased diluted 2011 EPS by approximately $.22 from what was originally reported.

We completed the year with $9.5 million in cash compared to $6.7 million as of December 31, 2011.  We had $29.2 million in working capital compared to $29.7 million at 2011 year end and a current ratio of 3.4 to 1.

Earnings Call
Arabian American will host a conference call and live webcast at 4:30 p.m. Eastern Time, today. All parties interested in participating should call 1-877-941-4774 if calling within the United States or 1-480-629-9760 if calling internationally. An audio playback will be available until March 14, 2013. To listen to the playback, please call 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Use pin number 4601831 for the audio replay.

A link to the simultaneous webcast of today's call will be available at http://www.arabianamericandev.com under the investor relations tab and is available through Windows Media Player or RealPlayer. A webcast replay of the call will also be available on the Company's website under the investor relations tab for one year after the call date.

About Arabian American Development Company (ARSD)
ARSD owns and operates a petrochemical facility located in southeast Texas, just north of Beaumont which specializes in high purity petrochemical solvents and other solvent type manufacturing. The Company is also the original developer and a 35% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

Use of Non-GAAP Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP").  This press release contains the non-GAAP measure of EBITDA.  We have also included "adjusted EBITDA" which excludes the effect of equity in earnings (loss) from AMAK. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Forward-Looking Statements
Statements in this press release that are not historical facts are forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon our belief, as well as, assumptions made by and information currently available to us. Because such statements are based upon expectations as to future economic performance and are not statements of fact, actual results may differ from those projected. These risks, as well as others, are discussed in greater detail in Arabian American's filings with the Securities and Exchange Commission, including Arabian American's Annual Report on Form 10-K for the year ended December 31, 2012, and the Company's subsequent Quarterly Reports on Form 10-Q.  All forward-looking statements included in this press release are based upon information available to the company as of the date of this press release. 

Company Contact:
Nick Carter, President and Chief Executive Officer
(409) 385-8300
ncarter@arabianamericandev.com

Investor Relations Contact:
Kim Rogers-Carrete, Principal
Genesis Select
(303) 415-0200
krogersc@genesisselect.com

Or

Matthew Selinger, Principal
Genesis Select
(303) 415-0200
mselinger@genesisselect.com

 

- Tables follow –

 

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS




December 31,


2012

2011



(restated)


(thousands of dollars)

ASSETS



CURRENT ASSETS



  Cash and cash equivalents

$   9,508

$   6,674

  Derivative instruments

-

393

  Trade receivables, net

15,802

23,198

  Advance to AMAK

2,162

120

  Prepaid expenses and other assets

1,561

562

  Contractual based intangible assets

250

250

  Inventories

9,840

9,456

  Deferred income taxes

1,054

1,169

  Taxes receivable

1,182

-




          Total current assets

41,359

41,822




  PLANT, PIPELINE, AND EQUIPMENT – AT COST

68,482

60,624

    LESS ACCUMULATED DEPRECIATION

(28,062)

(23,672)




  PLANT, PIPELINE, AND EQUIPMENT, NET

40,420

36,952




  INVESTMENT IN AMAK

38,971

38,105

  MINERAL PROPERTIES IN THE UNITED STATES

588

588

CONTRACTUAL BASED INTANGIBLE ASSETS, net of current portion 

104

355

  OTHER ASSETS

11

11




TOTAL ASSETS

$ 121,453

$ 117,833

 

 

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - Continued




December 31,


2012

2011



(restated)


(thousands of dollars)

LIABILITIES



  CURRENT LIABILITIES



    Accounts payable

$  6,306

$  5,857

    Accrued interest

96

116

    Current portion of derivative instruments

301

345

    Accrued liabilities

2,687

2,944

    Accrued liabilities in Saudi Arabia

140

140

    Notes payable

12

12

    Current portion of post-retirement benefit

269

258

    Current portion of long-term debt

1,500

1,500

    Current portion of other liabilities

880

937




          Total current liabilities

12,191

12,109




  LONG-TERM DEBT, net of current portion

14,239

22,739

  POST- RETIREMENT BENEFIT, net of current portion

649

649




  DERIVATIVE INSTRUMENTS, net of current portion

592

789

  OTHER LIABILITIES, net of current portion

379

1,071

  DEFERRED INCOME TAXES

10,094

9,394




          Total liabilities

38,144

46,751




COMMITMENTS AND CONTINGENCIES






EQUITY



  Common Stock ‑ authorized 40 million shares of $.10 par value;

      issued and outstanding, 23.8 million and 23.7 million shares

      in 2012 and 2011, respectively

2,381

2,373

  Additional Paid-in Capital

44,791

44,138

  Accumulated Other Comprehensive Loss

(580)

(748)

  Retained Earnings

36,428

25,030

 Total Arabian American Development Company Stockholders'

    Equity

83,020

70,793

 Noncontrolling interest

289

289

       Total equity

83,309

71,082




     TOTAL LIABILITIES AND EQUITY

$ 121,453

$ 117,833

 

 

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME





THREE MONTHS ENDED

12 MONTHS ENDED


31-Dec

31-Dec


2012

2011

2012

2011



(restated)


(restated)


(thousands of dollars)

REVENUES





  Petrochemical Product Sales

$  48,831

$ 60,183

$  218,512

$  194,620

  Processing Fees

1,106

1,295

4,346

4,897


49,937

61,478

222,858

199,517

OPERATING COSTS AND EXPENSES





  Cost of Petrochemical Product





    Sales and Processing  

43,031

51,317

192,100

173,600






   GROSS PROFIT

6,906

10,161

30,758

25,917






GENERAL AND ADMINISTRATIVE
EXPENSES





  General and Administrative

4,027

3,643

12,782

11,778

  Depreciation

145

120

520

476


4,172

3,763

13,302

12,254






OPERATING INCOME

2,734

6,398

17,456

13,663






OTHER INCOME (EXPENSE)





  Interest Income

1

-

3

4

  Interest Expense

(112)

(185)

(547)

(699)

  Losses on cash flow hedge reclassified from OCI

(84)

(98)

(359)

(414)

  Equity in earnings (loss) from AMAK

1,419

(255)

192

(1,018)

  Gain on additional equity issue by AMAK

184

-

674

8,850

  Miscellaneous Income (Expense)

(25)

(12)

(117)

3


1,383

(550)

(154)

6,726






 INCOME BEFORE INCOME TAX EXPENSE

4,117

5,848

17,302

20,389






INCOME TAXES

1,190

2,026

5,904

6,505






  NET INCOME

2,927

3,822

11,398

13,884






NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTEREST

-

-

-

-






NET INCOME ATTRIBUTABLE TO
ARABIAN AMERICAN DEVELOPMENT CO.

$   2,927

$  3,822

$ 11,398

$ 13,884






Net income per common share





  Basic earnings per share

$0.12

$0.16

$0.47

$0.58

  Basic weighted average number

  of common shares outstanding

24,105

24,001

24,081

23,993






  Diluted earnings per share

$0.12

$0.16

$0.46

$0.57

  Diluted weighted average number

  of common shares outstanding

24,704

24,523

24,745

24,267

 

 

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES(1)





THREE MONTHS ENDED

12 MONTHS ENDED


31-Dec

31-Dec


2012

2011

2012

2011


(in thousands)






NET INCOME

$              2,927

$              3,822

$               11,398

$               13,884






Add back:





  Interest

196

283

906

1,113

  Taxes

1,190

2,026

5,904

6,505

  Depreciation

145

120

520

476

  Depreciation in Cost of sales

817

695

3,053

2,744






EBITDA

$              5,275

$              6,946

$               21,781

$               24,722






  Equity in (earnings) losses in AMAK

(1,603)

255

(866)

(7,832)






Adjusted EBITDA

$              3,672

$              7,201

$               20,915

$               16,890








12/31/2012

12/31/2011


(in thousands except ratio)

(in thousands except ratio)




Current assets

$ 41,359

$ 41,822




Current liabilities

$ 12,191

$ 12,109




Working capital

$ 29,168

$ 29,713

(current assets less current liabilities)



Current ratio

3.4


 (current assets divided by current liabilities)



 

(1) This press release includes non-GAAP measures.  Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

 

SOURCE Arabian American Development Co.