LOS ANGELES- May 13, 2014– Rentech, Inc. (NASDAQ: RTK) today announced financial and operating results for the three months ended March 31, 2014.
D. Hunt Ramsbottom, president and CEO of Rentech, said, “One year ago, we announced our wood fibre strategy when we acquired Fulghum Fibres. Fulghum Fibres’ cash flow has proven to be stable and the business is running as expected. Our Canadian wood pellet projects are progressing on schedule and on budget.”
Mr. Ramsbottom continued, “We have just acquired New England Wood Pellet, which strengthens and diversifies our fibre portfolio. With the recent investment from Blackstone/GSO, we are well positioned to further expand our fibre business.”
Mr. Ramsbottom added, “Our nitrogen fertilizer facilities have improved their operating and financial performance compared to last quarter. Both facilities are producing at or above new nameplate production capacity. We are focused on continued operational excellence at all of our facilities worldwide.”
Summary of Results
Rentech’s financial statements reflect the consolidated results of Rentech, Inc. and its subsidiaries, including its wood fibre processing business and Rentech Nitrogen Partners, L.P. (NYSE: RNF) (Rentech Nitrogen). Rentech owns the general partner and approximately 60% of the common units representing limited partner interests of Rentech Nitrogen. The results of the wood fibre processing business are reported as two operating segments: Fulghum Fibres (wood chipping) and wood pellets. Rentech Nitrogen’s results include two operating segments: the East Dubuque Facility and the Pasadena Facility.
The financial results of Fulghum Fibres were included in 2013 results of operations only since the date of acquisition, which was May 1, 2013. Results for the three months ended March 31, 2014 are summarized below:
Consolidated revenues were $84.8 million, compared to $59.6 million in the prior-year period. These revenues were comprised primarily of:
$28.6 million from Fulghum Fibres; and
$56.3 million from Rentech Nitrogen, which represents a decrease of $3.3 million from the prior-year period.
Gross profit was $17.9 million, compared to $22.7 million in the prior-year period. Gross profit was comprised of:
$4.1 million from Fulghum Fibres; and
$13.8 million from Rentech Nitrogen
Fulghum Fibres’ revenues were $28.6 million for the three months ended March 31, 2014, of which $14.2 million were generated from U.S. and $14.4 million from South American operations. Fulghum Fibres’ mills in the U.S. and South America processed approximately 3.0 million green metric tons (GMT) and approximately 0.8 million GMT of logs, respectively, into wood chips and residual fuels.
$150 Million Blackstone/GSO Capital Partners Investment
On April 9, 2014, GSO Capital Partners (GSO), the credit investment arm of Blackstone, invested $150 million in Rentech in the form of $100 million of convertible preferred stock and a $50 million term loan. The proceeds from the Blackstone/GSO investment will fund, among other things, identified growth opportunities in Rentech’s wood fibre processing business, including the Company’s recent acquisition of New England Wood Pellet (NEWP).
New England Wood Pellet Acquisition
On May 1, 2014, Rentech acquired NEWP, the largest producer of wood pellets for the U.S. heating market. The acquisition adds EBITDA and cash flow to Rentech’s wood pellet segment. NEWP broadens the Company’s product offerings, expands its operations and customer base, and opens up new geographic markets. It also positions Rentech for further growth in the home-heating market. NEWP is forecasted to have revenues of $31 million, operating income of $3 million and EBITDA of $5 million for the eight month period after the acquisition, ending December 31, 2014.
Atikokan and Wawa Pellet Facilities
The Company’s Canadian pellet projects are progressing on schedule and on budget. Rentech is targeting first delivery of pellets from the Atikokan facility to Ontario Power Generation this summer. Installation of equipment at the Wawa facility is proceeding on time, and the first shipment of pellets from the Wawa facility to Drax is expected in the fourth quarter of this year. The new pellet storage handling and loading facility that QSL is constructing at the Port of Quebec will be ready to begin receiving pellets this summer.
About Rentech, Inc.
Rentech, Inc. (NASDAQ: RTK) owns and operates wood fibre processing, wood pellet production and nitrogen fertilizer manufacturing businesses. Rentech offers a full range of integrated wood fibre services for commercial and industrial customers around the world, including wood chipping services, operations, marketing, trading and vessel loading, through its subsidiary, Fulghum Fibres. The Company’s New England Wood Pellet subsidiary is a leading producer of bagged pellets for the U.S. heating market. Rentech manufactures and sells nitrogen fertilizer through its publicly-traded subsidiary, Rentech Nitrogen Partners, L.P. (NYSE: RNF). Please visit www.rentechinc.com and www.rentechnitrogen.com for more information.
Source:Pressrelease from Rentech, Inc.