Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TRECORA RESOURCES | |
Entity Central Index Key | 0000007039 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,714,980 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 4,325 | $ 6,735 |
Trade receivables, net | 30,518 | 27,112 |
Inventories | 15,295 | 16,539 |
Prepaid expenses and other assets | 3,951 | 4,664 |
Taxes receivable | 182 | 182 |
Total current assets | 54,271 | 55,232 |
Plant, pipeline and equipment, net | 191,528 | 194,657 |
Goodwill | 21,798 | 21,798 |
Intangible assets, net | 18,016 | 18,947 |
Investment in AMAK | 37,265 | 38,746 |
Lease right of use assets, net | 15,197 | 0 |
Mineral properties in the United States | 558 | 588 |
TOTAL ASSETS | 338,633 | 329,968 |
Current Liabilities | ||
Accounts payable | 11,159 | 19,106 |
Accrued liabilities | 5,415 | 5,439 |
Current portion of long-term debt | 4,194 | 4,194 |
Current portion of lease liabilities | 3,412 | 0 |
Current portion of other liabilities | 850 | 752 |
Total current liabilities | 25,030 | 29,491 |
Long-term debt, net of current portion | 94,191 | 98,288 |
Lease liabilities, net of current portion | 11,785 | 0 |
Other liabilities, net of current portion | 1,047 | 1,352 |
Deferred income taxes | 16,623 | 15,676 |
Total liabilities | 148,676 | 144,807 |
EQUITY | ||
Common stock‑authorized 40 million shares of $0.10 par value; issued 24.7 million and 24.6 million in 2019 and 2018 and outstanding 24.7 million and 24.6 million shares in 2019 and 2018, respectively | 2,472 | 2,463 |
Additional paid-in capital | 58,920 | 58,294 |
Common stock in treasury, at cost | (2) | (8) |
Retained earnings | 128,278 | 124,123 |
Total Trecora Resources Stockholders' Equity | 189,668 | 184,872 |
Noncontrolling Interest | 289 | 289 |
Total equity | 189,957 | 185,161 |
TOTAL LIABILITIES AND EQUITY | $ 338,633 | $ 329,968 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares issued (in shares) | 24,700,000 | 24,600,000 |
Common stock, shares outstanding (in shares) | 24,700,000 | 24,600,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
REVENUES | ||||
REVENUES | $ 69,371 | $ 68,106 | $ 134,526 | $ 139,847 |
OPERATING COSTS AND EXPENSES | ||||
Cost of Sales and Processing (including depreciation and amortization of $4,229 and $2,830, respectively) | 58,806 | 59,964 | 113,888 | 121,565 |
GROSS PROFIT | 10,565 | 8,142 | 20,638 | 18,282 |
GENERAL AND ADMINISTRATIVE EXPENSES | ||||
General and administrative | 6,081 | 4,554 | 12,131 | 10,889 |
Depreciation | 208 | 191 | 421 | 387 |
GENERAL AND ADMINISTRATIVE EXPENSES | 6,289 | 4,745 | 12,552 | 11,276 |
OPERATING INCOME | 4,276 | 3,397 | 8,086 | 7,006 |
OTHER INCOME (EXPENSE) | ||||
Interest income | 0 | 14 | 5 | 21 |
Interest expense | (1,401) | (815) | (2,900) | (1,693) |
Equity in (losses) earnings of AMAK | (91) | 228 | (150) | 458 |
Miscellaneous income (expense), net | 284 | (13) | 256 | (39) |
OTHER INCOME (EXPENSE) | (1,208) | (586) | (2,789) | (1,253) |
INCOME BEFORE INCOME TAXES | 3,068 | 2,811 | 5,297 | 5,753 |
INCOME TAX EXPENSE | 664 | 596 | 1,142 | 1,186 |
NET INCOME | 2,404 | 2,215 | 4,155 | 4,567 |
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST | 0 | 0 | 0 | 0 |
NET INCOME ATTRIBUTABLE TO TRECORA RESOURCES | $ 2,404 | $ 2,215 | $ 4,155 | $ 4,567 |
Basic Earnings per Common Share | ||||
Net Income Attributable to Trecora Resources (in dollars per share) | $ 0.10 | $ 0.09 | $ 0.17 | $ 0.19 |
Basic Weighted Average Number of Common Shares Outstanding (in shares) | 24,696 | 24,370 | 24,675 | 24,354 |
Diluted Earnings per Common Share | ||||
Net Income Attributable to Trecora Resources (in dollars per share) | $ 0.10 | $ 0.09 | $ 0.17 | $ 0.18 |
Diluted Weighted Average Number of Common Shares Outstanding (in shares) | 25,091 | 25,014 | 25,089 | 25,119 |
Product sales | ||||
REVENUES | ||||
REVENUES | $ 65,329 | $ 63,569 | $ 126,822 | $ 130,268 |
Processing fees | ||||
REVENUES | ||||
REVENUES | $ 4,042 | $ 4,537 | $ 7,704 | $ 9,579 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING COSTS AND EXPENSES | ||||
Depreciation and amortization | $ 4,128 | $ 2,837 | $ 8,357 | $ 5,667 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | TREASURY STOCK | RETAINED EARNINGS | TOTAL | NON-CONTROLLING INTEREST |
Equity, beginning balance (in shares) at Dec. 31, 2017 | 24,311 | ||||||
Equity, beginning balance at Dec. 31, 2017 | $ 185,011 | $ 2,451 | $ 56,012 | $ (196) | $ 126,455 | $ 184,722 | $ 289 |
Stock Options | |||||||
Issued to Directors | (10) | (10) | (10) | ||||
Issued to Employees | 154 | 154 | 154 | ||||
Cancellation of Issuance to Former Director | (680) | (680) | (680) | ||||
Restricted Stock Units | |||||||
Issued to Directors | 175 | 175 | 175 | ||||
Issued to Employees | 734 | 734 | 734 | ||||
Common Stock | |||||||
Issued to Directors | (41) | (78) | 37 | (41) | |||
Issued to Employees | 286 | 132 | 154 | 286 | |||
Stock Exchange | (130) | (65) | (65) | (130) | |||
Warrants | (9) | 9 | |||||
Net Income | 4,567 | 4,567 | 4,567 | ||||
Equity, ending balance (in shares) at Jun. 30, 2018 | 24,311 | ||||||
Equity, ending balance at Jun. 30, 2018 | 190,066 | $ 2,451 | 56,365 | (61) | 131,022 | 189,777 | 289 |
Equity, beginning balance (in shares) at Mar. 31, 2018 | 24,311 | ||||||
Equity, beginning balance at Mar. 31, 2018 | 187,785 | $ 2,451 | 56,422 | (184) | 128,807 | 187,496 | 289 |
Stock Options | |||||||
Cancellation of Issuance to Former Director | (680) | (680) | (680) | ||||
Restricted Stock Units | |||||||
Issued to Directors | 82 | 82 | 82 | ||||
Issued to Employees | 385 | 385 | 385 | ||||
Common Stock | |||||||
Issued to Directors | (2) | (15) | 13 | (2) | |||
Issued to Employees | 281 | 171 | 110 | 281 | |||
Net Income | 2,215 | 2,215 | 2,215 | ||||
Equity, ending balance (in shares) at Jun. 30, 2018 | 24,311 | ||||||
Equity, ending balance at Jun. 30, 2018 | $ 190,066 | $ 2,451 | 56,365 | (61) | 131,022 | 189,777 | 289 |
Equity, beginning balance (in shares) at Dec. 31, 2018 | 24,600 | 24,626 | |||||
Equity, beginning balance at Dec. 31, 2018 | $ 185,161 | $ 2,463 | 58,294 | (8) | 124,123 | 184,872 | 289 |
Restricted Stock Units | |||||||
Issued to Directors | 168 | 168 | 168 | ||||
Issued to Employees | $ 458 | 458 | 458 | ||||
Common Stock | |||||||
Issued to Directors (in shares) | 10 | ||||||
Issued to Directors | $ 7 | $ 1 | 6 | 7 | |||
Issued to Employees (in shares) | 79 | ||||||
Issued to Employees | 8 | $ 8 | 8 | ||||
Net Income | $ 4,155 | 4,155 | 4,155 | ||||
Equity, ending balance (in shares) at Jun. 30, 2019 | 24,700 | 24,715 | |||||
Equity, ending balance at Jun. 30, 2019 | $ 189,957 | $ 2,472 | 58,920 | (2) | 128,278 | 189,668 | 289 |
Equity, beginning balance (in shares) at Mar. 31, 2019 | 24,687 | ||||||
Equity, beginning balance at Mar. 31, 2019 | 187,189 | $ 2,469 | 58,565 | (8) | 125,874 | 186,900 | 289 |
Restricted Stock Units | |||||||
Issued to Directors | 146 | 146 | 146 | ||||
Issued to Employees | 209 | 209 | 209 | ||||
Common Stock | |||||||
Issued to Directors (in shares) | 10 | ||||||
Issued to Directors | 7 | $ 1 | 6 | 7 | |||
Issued to Employees (in shares) | 18 | ||||||
Issued to Employees | 2 | $ 2 | 2 | ||||
Net Income | $ 2,404 | 2,404 | 2,404 | ||||
Equity, ending balance (in shares) at Jun. 30, 2019 | 24,700 | 24,715 | |||||
Equity, ending balance at Jun. 30, 2019 | $ 189,957 | $ 2,472 | $ 58,920 | $ (2) | $ 128,278 | $ 189,668 | $ 289 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net Income | $ 4,155 | $ 4,567 |
To Net Cash Provided by Operating Activities: | ||
Depreciation and Amortization | 7,880 | 4,941 |
Amortization of Intangible Assets | 931 | 931 |
Stock-based Compensation | 558 | 372 |
Deferred Income Taxes | 947 | 1,073 |
Postretirement Obligation | (18) | (809) |
Equity in Losses (Earnings) of AMAK | 150 | (458) |
Bad Debt Expense | 0 | 128 |
Amortization of Loan Fees | 91 | 161 |
Changes in Operating Assets and Liabilities: | ||
Increase in Trade Receivables | (3,393) | (817) |
Increase in Insurance Receivables | 0 | (493) |
Decrease in Taxes Receivable | 0 | 4,293 |
Decrease in Inventories | 1,244 | 1,448 |
Decrease (Increase) in Prepaid Expenses and Other Assets | 16 | (901) |
Decrease in Accounts Payable and Accrued Liabilities | (6,767) | (4,742) |
Decrease in Other Liabilities | 54 | 104 |
Net Cash Provided by Operating Activities | 5,848 | 9,798 |
INVESTING ACTIVITIES | ||
Additions to Plant, Pipeline and Equipment | (4,286) | (15,434) |
Proceeds from PEVM | 30 | 0 |
Advances to AMAK, net | (26) | (83) |
Proceeds from AMAK Share Repurchase | 440 | 0 |
Net Cash Used in Investing Activities | (3,842) | (15,517) |
FINANCING ACTIVITIES | ||
Net Cash (Paid) Received Related to Stock-Based Compensation | (228) | 245 |
Additions to Long-Term Debt | 2,000 | 16,000 |
Repayments of Long-Term Debt | (6,188) | (10,167) |
Net Cash (Used in) Provided by Financing Activities | (4,416) | 6,078 |
NET (DECREASE) INCREASE IN CASH | (2,410) | 359 |
CASH AT BEGINNING OF PERIOD | 6,735 | 3,028 |
CASH AT END OF PERIOD | 4,325 | 3,387 |
Supplemental disclosure of cash flow information: | ||
Cash payments for interest | 1,355 | 2,394 |
Cash payments for taxes, net of refunds | 80 | 92 |
Supplemental disclosure of non-cash items: | ||
Capital expansion amortized to depreciation expense | 244 | 210 |
Foreign taxes paid by AMAK | 891 | 0 |
Stock exchange (Note 16) | $ 0 | $ 130 |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | GENERAL Organization Trecora Resources (the "Company") was incorporated in the State of Delaware in 1967. Our principal business activities are the manufacturing of various specialty hydrocarbons and specialty waxes and the provision of custom processing services. Unless the context requires otherwise, references to "we," "us," "our," and the "Company" are intended to mean Trecora Resources and its subsidiaries. This document includes the following abbreviations: (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. – Specialty Petrochemicals segment and parent of GSPL (4) GSPL – Gulf State Pipe Line Co, Inc. – Pipeline support for the Specialty Petrochemicals segment (5) TC – Trecora Chemical, Inc. – Specialty Waxes 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 Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . The unaudited condensed financial statements included in this document have been prepared on the same basis as the annual financial statements and in management's opinion reflect all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the interim periods presented. We have made estimates and judgments affecting the amounts reported in this document. The actual results that we experience may differ materially from our estimates. In the opinion of management, the disclosures included in these financial statements are adequate to make the information presented not misleading. Operating results for the six months ended June 30, 2019 are not necessarily indicative of results for the year ending December 31, 2019 . We currently operate in two segments, Specialty Petrochemicals and Specialty Waxes. All revenue originates from sources in the United States, and all long-lived assets owned are located in the United States. In addition, we own a 33% interest in AMAK, a Saudi Arabian closed joint stock company, which owns, operates and is developing mining assets in Saudi Arabia. We account for our investment under the equity method of accounting. See Note 16. Accounting Standards Adopted in 2019 In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842), as amended by ASU 2017-13, 2018-01, 2018-10, 2018-11, and 2019-01, in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under prior GAAP and disclosing key information about leasing arrangements. The new standard requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The Company adopted ASC 842 in the first quarter of 2019 utilizing the modified retrospective transition approach. The Company has elected (1) the package of practical expedients, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs for any existing leases as of the adoption date, and (2) the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. In addition, the Company elected the practical expedients related to (1) certain classes of underlying asset to not separate non-lease components from lease components and (2) the short-term lease recognition exemption for all leases that qualify. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of right-of-use assets of approximately $17.0 million and lease liabilities for operating leases of approximately $17.0 million on its Consolidated Balance Sheets, with no material impact to retained earnings or Consolidated Statements of Operations. See Note 8 for further information regarding the impact of the adoption of ASC 842 on the Company's consolidated financial statements. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In January 2017, the FASB issued ASU No. 2017-4, Intangibles - Goodwill and Other (Topic 350) . The amendments in ASU 2017-4 simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company has goodwill from a prior business combination and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the year ended December 31, 2018, the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company's goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company's financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The Company adopted this ASU on January 1, 2019 and it did not have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. ASU No. 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and the ASU allows for early adoption in any interim period after issuance of the update. The adoption of this ASU is not expected to have a significant impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) , to require the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts and applies to all financial assets, including trade receivables. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and the ASU allows for early adoption as of the beginning of an interim or annual reporting period beginning after December 15, 2018. The Company is currently assessing the impact this ASU will have on its consolidated financial statements. |
TRADE RECEIVABLES
TRADE RECEIVABLES | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
TRADE RECEIVABLES | TRADE RECEIVABLES Trade receivables, net, consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Trade receivables $ 30,958 $ 27,564 Less allowance for doubtful accounts (440 ) (452 ) Trade receivables, net $ 30,518 $ 27,112 Trade receivables serves as collateral for our amended and restated credit agreement. See Note 10. |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Prepaid license $ 1,612 $ 2,419 Spare parts 1,667 1,597 Other prepaid expenses and assets 672 648 Total prepaid expenses and other assets $ 3,951 $ 4,664 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories included the following: June 30, 2019 December 31, 2018 (thousands of dollars) Raw material $ 3,963 $ 4,742 Work in process 244 173 Finished products 11,088 11,624 Total inventory $ 15,295 $ 16,539 Inventory serves as collateral for our amended and restated credit agreement. See Note 10. Inventory included Specialty Petrochemicals products in transit valued at approximately $3.2 million and $4.1 million at June 30, 2019 , and December 31, 2018 , respectively. |
PLANT, PIPELINE AND EQUIPMENT
PLANT, PIPELINE AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PLANT, PIPELINE AND EQUIPMENT | PLANT, PIPELINE AND EQUIPMENT Plant, pipeline and equipment consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Platinum catalyst metal $ 1,580 $ 1,612 Catalyst 3,974 3,131 Land 5,428 5,428 Plant, pipeline and equipment 257,986 253,905 Construction in progress 3,888 4,343 Total plant, pipeline and equipment $ 272,856 $ 268,419 Less accumulated depreciation (81,328 ) (73,762 ) Net plant, pipeline and equipment $ 191,528 $ 194,657 Plant, pipeline, and equipment serve as collateral for our amended and restated credit agreement. See Note 10. Interest capitalized for construction was approximately $0.0 million and $0.4 million for the three months and $0.0 million and $0.7 million for the six months ended June 30, 2019 and 2018 , respectively. Labor capitalized for construction was approximately $0.0 million and $0.9 million for the three months and $0.1 million and $2.1 million for the six months ended June 30, 2019 and 2018 , respectively. Construction in progress during the first six months of 2019 included sales rack and Advanced Reformer unit improvements at SHR and equipment modifications at TC. Construction in progress during the first six months of 2018 included equipment purchased for various equipment updates at the TC facility, the Advanced Reformer unit, tankage upgrades, and an addition to the rail spur at SHR. Amortization relating to the catalyst, which is included in cost of sales, was approximately $0.2 million and $0.0 million for the three months and $0.5 million and $0.0 million for the six months ended June 30, 2019 and 2018 , respectively. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill and intangible assets were recorded in relation to the acquisition of TC on October 1, 2014. The following tables summarize the gross carrying amounts and accumulated amortization of intangible assets by major class: June 30, 2019 Gross Accumulated Amortization Net Intangible assets subject to amortization (Definite-lived) (thousands of dollars) Customer relationships $ 16,852 $ (5,336 ) $ 11,516 Non-compete agreements 94 (90 ) 4 Licenses and permits 1,471 (549 ) 922 Developed technology 6,131 (2,912 ) 3,219 24,548 (8,887 ) 15,661 Intangible assets not subject to amortization (Indefinite-lived) Emissions allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (8,887 ) $ 18,016 December 31, 2018 Gross Accumulated Amortization Net Intangible assets subject to amortization (Definite-lived) (thousands of dollars) Customer relationships $ 16,852 $ (4,775 ) $ 12,077 Non-compete agreements 94 (80 ) 14 Licenses and permits 1,471 (495 ) 976 Developed technology 6,131 (2,606 ) 3,525 24,548 (7,956 ) 16,592 Intangible assets not subject to amortization (Indefinite-lived) Emissions allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (7,956 ) $ 18,947 Amortization expense for intangible assets included in cost of sales for the three months ended June 30, 2019 and 2018 , was approximately $0.5 million and $0.5 million , and for the six months ended June 30, 2019 and 2018 , was approximately $0.9 million and $0.9 million , respectively. Based on identified intangible assets that are subject to amortization as of June 30, 2019 , we expect future amortization expenses for each period to be as follows: Total Remainder of 2019 2020 2021 2022 2023 2024 Thereafter (thousands of dollars) Customer relationships $ 11,516 $ 562 $ 1,123 $ 1,123 1,123 1,123 1,123 $ 5,339 Non-compete agreements 4 4 — — — — — — Licenses and permits 922 53 106 101 86 86 86 404 Developed technology 3,219 307 613 613 613 613 460 — Total future amortization expense $ 15,661 $ 926 $ 1,842 $ 1,837 $ 1,822 $ 1,822 $ 1,669 $ 5,743 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases certain rail cars, rail equipment, office space and office equipment. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right of use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term. The components of lease expense were as follows: ($ in thousands) Classification in the Condensed Consolidated Statements of Income Three Months Ended Six Months Ended Operating lease cost (a) Cost of sales, exclusive of depreciation and amortization $ 1,152 $ 2,291 Operating lease cost (a) Selling, general and administrative 38 72 Total operating lease cost $ 1,190 $ 2,363 Finance lease cost: Amortization of right-of-use assets Depreciation $ — — Interest on lease liabilities Interest Expense — — Total finance lease cost $ — $ — Total lease cost $ 1,190 $ 2,363 (a) Short-term lease costs were approximately $64 thousand during the period. The Company had no variable lease expense, as defined by ASC 842, during the period. ($ in thousands) Classification on the Condensed Consolidated Balance Sheets June 30, 2019 Assets: Operating Operating lease assets $ 15,197 Finance Property, plant, and equipment — Total leased assets $ 15,197 Liabilities: Current Operating Current portion of operating lease liabilities $ 3,412 Finance Short-term debt and current portion of long-term debt — Noncurrent Operating Operating lease liabilities 11,785 Finance Long-term debt — Total lease liabilities $ 15,197 ($ in thousands) Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 1,127 $ 2,260 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 $ 25 $ 138 Finance leases — — June 30, 2019 Weighted-average remaining lease term (in years): Operating leases 4.8 Finance leases 0.0 Weighted-average discount rate: Operating leases 4.5 % Finance leases — % Nearly all of the Company’s lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company’s estimated incremental borrowing rate is based on information available at the inception of the lease. As of June 30, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 4,010 $ — 2021 3,576 — 2022 3,480 — 2023 2,806 — 2024 1,460 — Thereafter 1,549 — Total lease payments $ 16,881 $ — Less: Interest 1,684 — Total lease obligations $ 15,197 $ — Disclosures related to periods prior to adoption of ASU 2016-02 The Company adopted ASU 2016-02 using a modified retrospective transition approach on January 1, 2019 as noted in Note 1. As required, the following disclosure is provided for periods prior to adoption. Minimum lease commitments as of December 31, 2018 that have initial or remaining lease terms in excess of one year are as follows: ($ in thousands) Operating Leases 2019 $ 3,670 2020 3,583 2021 3,418 2022 3,107 2023 2,288 Beyond 2023 2,065 |
LEASES | LEASES The Company leases certain rail cars, rail equipment, office space and office equipment. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right of use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term. The components of lease expense were as follows: ($ in thousands) Classification in the Condensed Consolidated Statements of Income Three Months Ended Six Months Ended Operating lease cost (a) Cost of sales, exclusive of depreciation and amortization $ 1,152 $ 2,291 Operating lease cost (a) Selling, general and administrative 38 72 Total operating lease cost $ 1,190 $ 2,363 Finance lease cost: Amortization of right-of-use assets Depreciation $ — — Interest on lease liabilities Interest Expense — — Total finance lease cost $ — $ — Total lease cost $ 1,190 $ 2,363 (a) Short-term lease costs were approximately $64 thousand during the period. The Company had no variable lease expense, as defined by ASC 842, during the period. ($ in thousands) Classification on the Condensed Consolidated Balance Sheets June 30, 2019 Assets: Operating Operating lease assets $ 15,197 Finance Property, plant, and equipment — Total leased assets $ 15,197 Liabilities: Current Operating Current portion of operating lease liabilities $ 3,412 Finance Short-term debt and current portion of long-term debt — Noncurrent Operating Operating lease liabilities 11,785 Finance Long-term debt — Total lease liabilities $ 15,197 ($ in thousands) Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 1,127 $ 2,260 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 $ 25 $ 138 Finance leases — — June 30, 2019 Weighted-average remaining lease term (in years): Operating leases 4.8 Finance leases 0.0 Weighted-average discount rate: Operating leases 4.5 % Finance leases — % Nearly all of the Company’s lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company’s estimated incremental borrowing rate is based on information available at the inception of the lease. As of June 30, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 4,010 $ — 2021 3,576 — 2022 3,480 — 2023 2,806 — 2024 1,460 — Thereafter 1,549 — Total lease payments $ 16,881 $ — Less: Interest 1,684 — Total lease obligations $ 15,197 $ — Disclosures related to periods prior to adoption of ASU 2016-02 The Company adopted ASU 2016-02 using a modified retrospective transition approach on January 1, 2019 as noted in Note 1. As required, the following disclosure is provided for periods prior to adoption. Minimum lease commitments as of December 31, 2018 that have initial or remaining lease terms in excess of one year are as follows: ($ in thousands) Operating Leases 2019 $ 3,670 2020 3,583 2021 3,418 2022 3,107 2023 2,288 Beyond 2023 2,065 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Accrued state taxes 262 210 Accrued property taxes 1,720 — Accrued payroll 981 936 Accrued interest 32 31 Accrued officer compensation 650 — Accrued restructuring & severance 37 1,221 Accrued foreign taxes — 802 Other 1,733 2,239 Total $ 5,415 $ 5,439 |
LIABILITIES AND LONG-TERM DEBT
LIABILITIES AND LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
LIABILITIES AND LONG-TERM DEBT | LIABILITIES AND LONG-TERM DEBT Senior Secured Credit Facilities As of June 30, 2019 , we had $16.0 million in borrowings outstanding under the revolving credit facility (the "Revolving Facility") of our amended and restated credit agreement (as amended to the date hereof, the "ARC Agreement") and approximately $83.1 million in borrowings outstanding under the term loan facility of the ARC Agreement (the "Term Loan Facility" and, together with the Revolving Facility, the "Credit Facilities"). In addition, we had approximately $42 million of available borrowings under our Revolving Facility at June 30, 2019 . TOCCO’s ability to make additional borrowings under the Revolving Facility at June 30, 2019 was limited by, and in the future may be limited by our obligation to maintain compliance with the covenants contained in the ARC Agreement (including maintenance of a maximum Consolidated Leverage Ratio and minimum Consolidated Fixed Charge Coverage Ratio (each as defined in the ARC Agreement)). On March 29, 2019, TOCCO, as borrower, and SHR, GSPL and TC, as guarantors, entered into a Sixth Amendment (“Sixth Amendment”) to the ARC Agreement. Pursuant to the Sixth Amendment, certain amendments were made to the terms of the ARC Agreement, including increasing the maximum Consolidated Leverage Ratio that must be maintained by TOCCO to 4.75 to 1.00 for the four fiscal quarters ended March 31, 2019, 4.50 to 1.00 for the four fiscal quarters ended June 30, 2019 and 4.00 to 1.00 for the four fiscal quarters ended September 30, 2019. For the four fiscal quarters ended December 31, 2019 and each fiscal quarter thereafter, TOCCO must maintain a Consolidated Leverage Ratio of 3.50 to 1.00 (subject to temporary increase following certain acquisitions). The maturity date for the ARC Agreement is July 31, 2023. As of June 30, 2019 , the effective interest rate for the Credit Facilities was 4.87% . The ARC Agreement contains a number of customary affirmative and negative covenants and we were in compliance with those covenants as of June 30, 2019 . For a summary of additional terms of the Credit Facilities, see Note 12, “Long-Term Debt and Long-Term Obligations” to the consolidated financial statements set forth in our Annual Report on Form 10-K for the year ended December 31, 2018. Debt Issuance Costs Debt issuance costs of approximately $0.9 million were incurred in connection with the fourth amendment to the ARC Agreement. Unamortized debt issuance costs of approximately $0.7 million and $0.8 million for the periods ended June 30, 2019 and December 31, 2018, have been netted against outstanding loan balances. Long-term debt and long-term obligations are summarized as follows: June 30, 2019 December 31, 2018 (thousands of dollars) Revolving Facility 16,000 18,000 Term Loan Facility 83,125 85,312 Loan fees (740 ) (830 ) Total long-term debt 98,385 102,482 Less current portion including loan fees 4,194 4,194 Total long-term debt, less current portion including loan fees 94,191 98,288 Subsequent to June 30, 2019, we made an optional principal payment of $4.0 million against the Revolving Facility, reducing the outstanding amount from $16.0 million to $12.0 million . |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Stock Option Plan for Key Employees, as well as, the Non-Employee Director Stock Option Plan (hereinafter collectively referred to as the “Stock Option Plans”), were approved by the Company’s stockholders in July 2008. The Stock Option Plans allot for the issuance of up to 1,000,000 shares. The Trecora Resources Stock and Incentive Plan (the “Plan”) was approved by the Company’s stockholders in June 2012. As amended, the Plan allots for the issuance of up to 2.5 million shares in the form of stock options or restricted stock unit awards. Share-based compensation of approximately $0.3 million and $(0.2) million was recognized during the three months and $0.6 million and $0.4 million for the six months ended June 30, 2019 and 2018, respectively. Stock Options and Warrant Awards Stock options and warrants granted under the provisions of the Stock Option Plans permit the purchase of our common stock at exercise prices equal to the closing price of Company common stock on the date the options were granted. The options have terms of 10 years and generally vest ratably over terms of 4 to 5 years. There were no stock options or warrant awards issued during the three or six months ended June 30, 2019 or 2018. A summary of the status of the Company’s stock option and warrant awards is as follows: Stock Options and Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Intrinsic Value (in thousands) Outstanding at January 1, 2019 745,830 10.33 Granted — — Exercised (85,000 ) 7.71 Forfeited (108,830 ) 8.80 Outstanding at June 30, 2019 552,000 11.04 3.8 $ — Expected to vest — $ — Exercisable at June 30, 2019 552,000 11.04 3.8 $ — The aggregate intrinsic value of options was calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock. At June 30, 2019 , options to purchase approximately 0.1 million shares of common stock were in-the-money. Since no options were granted, the weighted average grant-date fair value per share of options granted during the three months ended June 30, 2019 and 2018, respectively, was $0 . During the six months ended June 30, 2019 and 2018, the aggregate intrinsic value of options and warrants exercised was approximately $0.1 million and $0.6 million respectively, determined as of the date of option exercise. The Company received no cash from the exercise of options during the six months ended June 30, 2019 and 2018. Of the 85,000 stock options exercised, the Company only issued approximately 11,000 shares due to cashless transactions. The tax benefit realized from the exercise was insignificant. The Company has no non-vested options as of June 30, 2019 . Restricted Stock Unit Awards Generally, restricted stock unit awards are granted annually to officers and directors of the Company under the provisions of the Plan. Restricted stock units are also granted ad hoc to attract or retain key personnel, and the terms and conditions under which these restricted stock units vest vary by award. The fair market value of restricted stock units granted is equal to the Company’s closing stock price on the date of grant. Restricted stock units granted generally vest ratably over periods ranging from 2.5 to 5 years. Certain awards also include vesting provisions based on performance metrics. Upon vesting, the restricted stock units are settled by issuing one share of Company common stock per unit. A summary of the status of the Company's restricted stock units activity is as follows: Shares of Restricted Stock Units Weighted Average Grant Date Price per Share Outstanding at January 1, 2019 405,675 11.27 Granted 190,615 9.22 Forfeited (64,463 ) 12.13 Vested (136,568 ) 11.86 Outstanding at June 30, 2019 395,259 9.77 Expected to vest 395,259 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We file an income tax return in the U.S. federal jurisdiction and a margin tax return in Texas. We received notification from the Internal Revenue Service ("IRS") in November 2016 that the December 31, 2014, tax return was selected for audit. In April 2017, the audit was expanded to include the year ended December 31, 2015, to review the refund claim related to research and development activities. We received notification from the IRS in March 2018 that the audit was complete. We also received notification that Texas will audit our R&D credit calculations for 2014 and 2015. We were notified by Texas that the audit has been temporarily suspended as the Comptroller's office reviews its audit process regarding R&D credits. We do not expect any changes related to the Texas audit. Tax returns for various jurisdictions remain open for examination for the years 2014 through 2018. As of June 30, 2019 and December 31, 2018 , respectively, we recognized no adjustment for uncertain tax positions or related interest and penalties. The effective tax rate varies from the federal statutory rate of 21% , primarily as a result of state tax expense, stock based compensation and a research and development credit for the three and six months ended June 30, 2019 and 2018. We continue to maintain a valuation allowance against certain deferred tax assets, specifically for mining claims for PEVM, where realization is not certain. |
NET INCOME PER COMMON SHARE ATT
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES | NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES The following table (in thousands, except per share amounts) sets forth the computation of basic and diluted net income per share attributable to Trecora Resources for the three months ended June 30, 2019 and 2018 , respectively. Three Months Ended Three Months Ended Income Shares Per Share Amount Income Shares Per Share Amount Basic Net Income per Share: Net Income Attributable to Trecora Resources $ 2,404 24,696 $ 0.10 $ 2,215 24,370 $ 0.09 Unvested restricted stock units 395 349 Dilutive stock options outstanding — 295 Diluted Net Income per Share: Net Income Attributable to Trecora Resources $ 2,404 25,091 $ 0.10 $ 2,215 25,014 $ 0.09 Six Months Ended Six Months Ended Income Shares Per Share Amount Income Shares Per Share Amount Basic Net Income per Share: Net Income Attributable to Trecora Resources $ 4,155 24,675 $ 0.17 $ 4,567 24,354 $ 0.19 Unvested restricted stock units 414 376 Dilutive stock options outstanding — 389 Diluted Net Income per Share: Net Income Attributable to Trecora Resources $ 4,155 25,089 $ 0.17 $ 4,567 25,119 $ 0.18 At June 30, 2019 and 2018 , 552,000 and 924,860 shares of common stock, respectively, were issuable upon the exercise of options and warrants. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We operate through business segments according to the nature and economic characteristics of our products as well as the manner in which the information is used internally by our key decision maker, who is our Chief Executive Officer. Segment data may include rounding differences. Our Specialty Petrochemicals segment includes SHR and GSPL. Our Specialty Waxes segment is TC. We also separately identify our corporate overhead which includes financing and administrative activities such as legal, accounting, consulting, investor relations, officer and director compensation, corporate insurance, and other administrative costs. Three Months Ended June 30, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 58,584 $ 6,745 $ — $ — $ 65,329 Processing fees 1,527 2,515 — — 4,042 Total revenues 60,111 9,260 — — 69,371 Operating profit (loss) before depreciation and amortization 10,028 766 (2,182 ) — 8,612 Operating profit (loss) 7,104 (633 ) (2,195 ) — 4,276 Profit (loss) before taxes 6,375 (1,013 ) (2,294 ) — 3,068 Depreciation and amortization 2,925 1,399 12 — 4,336 Capital expenditures 1,461 426 — — 1,887 Three Months Ended June 30, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 56,135 $ 7,434 $ — — $ 63,569 Processing fees 1,685 2,852 — — 4,537 Total revenues 57,820 10,286 — — 68,106 Operating profit (loss) before depreciation and amortization 6,095 1,164 (834 ) — 6,425 Operating profit (loss) 4,440 (201 ) (842 ) — 3,397 Profit (loss) before taxes 3,859 (506 ) (542 ) — 2,811 Depreciation and amortization 1,655 1,365 8 — 3,028 Capital expenditures 3,529 877 — — 4,406 Six Months Ended June 30, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 114,074 $ 12,748 $ — $ — $ 126,822 Processing fees 2,910 4,794 — — 7,704 Total revenues 116,984 17,542 — — 134,526 Operating profit (loss) before depreciation and amortization 21,435 (83 ) (4,487 ) — 16,865 Operating profit (loss) 15,437 (2,830 ) (4,521 ) — 8,086 Profit (loss) before taxes 13,510 (3,552 ) (4,661 ) — 5,297 Depreciation and amortization 5,999 2,747 32 — 8,778 Capital expenditures 2,839 935 — — 3,774 Six Months Ended June 30, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 116,420 $ 13,817 $ — 31 $ 130,268 Processing fees 3,713 6,064 — (198 ) 9,579 Total revenues 120,133 19,881 — (167 ) 139,847 Operating profit (loss) before depreciation and amortization 14,488 1,554 (2,982 ) — 13,060 Operating profit (loss) 11,119 (1,115 ) (2,998 ) — 7,006 Profit (loss) before taxes 9,913 (1,687 ) (2,473 ) — 5,753 Depreciation and amortization 3,369 2,669 16 — 6,054 Capital expenditures 13,812 1,622 — — 15,434 June 30, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Trade receivables, product sales $ 23,465 $ 4,097 $ — $ — $ 27,562 Trade receivables, processing fees 1,042 1,914 — — 2,956 Goodwill and intangible assets, net — 39,814 — — 39,814 Total assets 299,103 114,409 91,247 (166,126 ) 338,633 December 31, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Trade receivables, product sales $ 21,915 $ 3,173 $ — $ — $ 25,088 Trade receivables, processing fees 633 1,391 — — 2,024 Goodwill and intangible assets, net — 40,745 — — 40,745 Total assets 284,367 115,366 91,474 (161,239 ) 329,968 |
POST-RETIREMENT OBLIGATIONS
POST-RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
POST-RETIREMENT OBLIGATIONS | POST-RETIREMENT OBLIGATIONS We currently have post-retirement obligations with two former executives. As of June 30, 2019 and December 31, 2018 , approximately $0.4 million and $0.4 million , respectively, remained outstanding and was included in post-retirement obligations. For additional information, see Note 22, “Post–Retirement Obligations” to the consolidated financial statements set forth in our Annual Report on Form 10–K for the year ended December 31, 2018. |
INVESTMENT IN AMAK
INVESTMENT IN AMAK | 6 Months Ended |
Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN AMAK | INVESTMENT IN AMAK As of June 30, 2019 and December 31, 2018 , the Company had a non-controlling equity interest of 33.3% and 33.4% in AMAK of approximately $37.3 million and $38.7 million , respectively. This investment is accounted for under the equity method. There were no events or changes in circumstances that may have an adverse effect on the fair value of our investment in AMAK at June 30, 2019 . In the second quarter of 2019, certain shareholders of AMAK transferred a portion of their shares to the CEO of AMAK as a one-time retention and performance bonus. The Company transferred 100,000 shares and the transaction reduced our ownership percentage from 33.4% to 33.3% . In first quarter 2018, we completed an exchange of shares with certain stockholders whereby such stockholders traded 65,000 common shares of TREC in exchange for 24,489 shares of our AMAK stock. The 65,000 shares were accounted for as treasury stock. This transaction reduced our ownership percentage from 33.44% to 33.41% . AMAK's financial statements were prepared in the functional currency of AMAK which is the Saudi Riyal ("SR"). In June 1986 the SR was officially pegged to the U. S. Dollar ("USD") at a fixed exchange rate of 1 USD to 3.75 SR. The summarized results of operation and financial position for AMAK are as follows: Results of Operations Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (thousands of dollars) (thousands of dollars) Sales $ 20,566 $ 19,494 $ 41,230 $ 33,581 Cost of sales 18,162 16,555 36,732 29,061 Gross profit 2,404 2,939 4,498 4,520 Selling, general, and administrative 2,807 2,892 5,545 4,415 Operating (loss) income (403 ) 47 (1,047 ) 105 Other (expense) income (75 ) 15 353 34 Finance and interest expense (448 ) (388 ) (893 ) (785 ) Loss before Zakat and income taxes (926 ) (326 ) (1,587 ) (646 ) Zakat and income taxes 366 — 888 — Net Loss $ (1,292 ) $ (326 ) $ (2,475 ) $ (646 ) Financial Position June 30, December 31, 2019 2018 (thousands of dollars) Current assets $ 35,658 $ 44,093 Noncurrent assets 197,093 212,291 Total assets $ 232,751 $ 256,384 Current liabilities $ 19,201 $ 17,160 Long term liabilities 74,111 77,366 Stockholders' equity 139,439 161,858 $ 232,751 $ 256,384 The equity in the (losses) earnings of AMAK reflected on the consolidated statements of income for the three and six months ended June 30, 2019 , and 2018 , is comprised of the following: Three Months Ended Six Months Ended 2019 2018 2019 2018 (thousands of dollars) (thousands of dollars) AMAK Net Loss $ (1,292 ) $ (326 ) $ (2,475 ) $ (646 ) Percentage of Ownership 33.29 % 33.41 % 33.29 % 33.41 % Company's share of loss reported by AMAK $ (429 ) $ (109 ) $ (824 ) $ (216 ) Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK 337 337 674 674 Equity in (losses) earnings of AMAK $ (91 ) $ 228 $ (150 ) $ 458 In connection with the 2018 AMAK share repurchase program, we received net proceeds of approximately $0.4 million during the three months ended March 31, 2019. AMAK completed the share repurchase program in 2019, at which point all shares repurchased from AMAK stockholders were registered as treasury shares. Upon completion of the share repurchase program, the Company's ownership percentage in AMAK did not change from 33.4% . For additional information, see Note 10, “Investment in Al Masane Al Kobra Mining Company ("AMAK")” to the consolidated financial statements set forth in our Annual Report on Form 10–K for the year ended December 31, 2018. At June 30, 2019 , and December 31, 2018 , we had a receivable from AMAK of approximately $0.1 million and $0.1 million , respectively, relating to unreimbursed travel and Board expenses which are included in prepaid and other assets. We have not advanced any cash to AMAK during 2019 . |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Consulting fees of approximately $28,000 and $19,000 were incurred during the three months and $50,000 and $50,000 during the six months ended June 30, 2019 and 2018 , respectively, from our Director, Nicholas Carter. Due to his history and experience with the Company and to provide continuity after his retirement, a three year consulting agreement was entered into with Mr. Carter in July 2015. In March 2019, a new consulting agreement was entered into with Mr. Carter effective through December 31, 2019, unless otherwise agreed by the Company and Mr. Carter. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Guarantees On October 24, 2010, we executed a limited Guarantee in favor of the Saudi Industrial Development Fund ("SIDF") whereby we agreed to guaranty up to 41% of the SIDF loan to AMAK in the principal amount of 330.0 million Saudi Riyals (US $88.0 million ) (the "Loan"). The term of the loan was originally through June 2019. As a condition of the Loan, SIDF required all stockholders of AMAK to execute personal or corporate Guarantees; as a result, our guarantee is for approximately 135.3 million Saudi Riyals (US $36.1 million ). The loan was necessary to continue construction of the AMAK facilities and provide working capital needs. We received no consideration in connection with extending the guarantee and did so to maintain and enhance the value of our investment. On July 8, 2018, the SIDF loan was amended to adjust the repayment schedule and extend the repayment terms through April 2024. Under the new payment terms the current amount due to SIDF in 2019 is 30.0 million Saudi Riyals (US $8.0 million ). The total amount outstanding to the SIDF at June 30, 2019 , was 290.0 million Saudi Riyals (US $77.3 million ). Operating Lease Commitments See Note 8 for discussion on lease commitments. Litigation The Company is periodically named in legal actions arising from normal business activities. We evaluate the merits of these actions and, if we determine that an unfavorable outcome is probable and can be reasonably estimated, we will establish the necessary reserves. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future. Supplier Agreements From time to time, we may incur shortfall fees due to feedstock purchases being below the minimum amounts prescribed by our agreements with our suppliers. Shortfall fee expenses for the three months ended June 30, 2019 , and 2018 , were $0.1 million and $0.4 million , respectively, and for the six months ended June 30, 2019 , and 2018 , were $0.7 million and $0.5 million , respectively. Environmental Remediation Amounts charged to expense for various activities related to environmental monitoring, compliance, and improvements were approximately $0.2 million and $0.2 million for the three months ended June 30, 2019 , and 2018 and for the six months ended June 30, 2019 , and 2018 , were $0.4 million and $0.3 million , respectively. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . |
Use of Estimates | The unaudited condensed financial statements included in this document have been prepared on the same basis as the annual financial statements and in management's opinion reflect all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the interim periods presented. We have made estimates and judgments affecting the amounts reported in this document. The actual results that we experience may differ materially from our estimates. In the opinion of management, the disclosures included in these financial statements are adequate to make the information presented not misleading. |
Leases | In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842), as amended by ASU 2017-13, 2018-01, 2018-10, 2018-11, and 2019-01, in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under prior GAAP and disclosing key information about leasing arrangements. The new standard requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The Company adopted ASC 842 in the first quarter of 2019 utilizing the modified retrospective transition approach. The Company has elected (1) the package of practical expedients, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs for any existing leases as of the adoption date, and (2) the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. In addition, the Company elected the practical expedients related to (1) certain classes of underlying asset to not separate non-lease components from lease components and (2) the short-term lease recognition exemption for all leases that qualify. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of right-of-use assets of approximately $17.0 million and lease liabilities for operating leases of approximately $17.0 million on its Consolidated Balance Sheets, with no material impact to retained earnings or Consolidated Statements of Operations. See Note 8 for further information regarding the impact of the adoption of ASC 842 on the Company's consolidated financial statements. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In January 2017, the FASB issued ASU No. 2017-4, Intangibles - Goodwill and Other (Topic 350) . The amendments in ASU 2017-4 simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company has goodwill from a prior business combination and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the year ended December 31, 2018, the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company's goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company's financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The Company adopted this ASU on January 1, 2019 and it did not have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. ASU No. 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and the ASU allows for early adoption in any interim period after issuance of the update. The adoption of this ASU is not expected to have a significant impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) , to require the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts and applies to all financial assets, including trade receivables. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and the ASU allows for early adoption as of the beginning of an interim or annual reporting period beginning after December 15, 2018. The Company is currently assessing the impact this ASU will have on its consolidated financial statements. |
TRADE RECEIVABLES (Tables)
TRADE RECEIVABLES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Trade Receivables | Trade receivables, net, consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Trade receivables $ 30,958 $ 27,564 Less allowance for doubtful accounts (440 ) (452 ) Trade receivables, net $ 30,518 $ 27,112 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Prepaid license $ 1,612 $ 2,419 Spare parts 1,667 1,597 Other prepaid expenses and assets 672 648 Total prepaid expenses and other assets $ 3,951 $ 4,664 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories included the following: June 30, 2019 December 31, 2018 (thousands of dollars) Raw material $ 3,963 $ 4,742 Work in process 244 173 Finished products 11,088 11,624 Total inventory $ 15,295 $ 16,539 |
PLANT, PIPELINE AND EQUIPMENT (
PLANT, PIPELINE AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Plant, Pipeline and Equipment | Plant, pipeline and equipment consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Platinum catalyst metal $ 1,580 $ 1,612 Catalyst 3,974 3,131 Land 5,428 5,428 Plant, pipeline and equipment 257,986 253,905 Construction in progress 3,888 4,343 Total plant, pipeline and equipment $ 272,856 $ 268,419 Less accumulated depreciation (81,328 ) (73,762 ) Net plant, pipeline and equipment $ 191,528 $ 194,657 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Finite-Lived Intangible Assets by Major Class | The following tables summarize the gross carrying amounts and accumulated amortization of intangible assets by major class: June 30, 2019 Gross Accumulated Amortization Net Intangible assets subject to amortization (Definite-lived) (thousands of dollars) Customer relationships $ 16,852 $ (5,336 ) $ 11,516 Non-compete agreements 94 (90 ) 4 Licenses and permits 1,471 (549 ) 922 Developed technology 6,131 (2,912 ) 3,219 24,548 (8,887 ) 15,661 Intangible assets not subject to amortization (Indefinite-lived) Emissions allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (8,887 ) $ 18,016 December 31, 2018 Gross Accumulated Amortization Net Intangible assets subject to amortization (Definite-lived) (thousands of dollars) Customer relationships $ 16,852 $ (4,775 ) $ 12,077 Non-compete agreements 94 (80 ) 14 Licenses and permits 1,471 (495 ) 976 Developed technology 6,131 (2,606 ) 3,525 24,548 (7,956 ) 16,592 Intangible assets not subject to amortization (Indefinite-lived) Emissions allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (7,956 ) $ 18,947 |
Summary of Indefinite-Lived Intangible Assets by Major Class | The following tables summarize the gross carrying amounts and accumulated amortization of intangible assets by major class: June 30, 2019 Gross Accumulated Amortization Net Intangible assets subject to amortization (Definite-lived) (thousands of dollars) Customer relationships $ 16,852 $ (5,336 ) $ 11,516 Non-compete agreements 94 (90 ) 4 Licenses and permits 1,471 (549 ) 922 Developed technology 6,131 (2,912 ) 3,219 24,548 (8,887 ) 15,661 Intangible assets not subject to amortization (Indefinite-lived) Emissions allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (8,887 ) $ 18,016 December 31, 2018 Gross Accumulated Amortization Net Intangible assets subject to amortization (Definite-lived) (thousands of dollars) Customer relationships $ 16,852 $ (4,775 ) $ 12,077 Non-compete agreements 94 (80 ) 14 Licenses and permits 1,471 (495 ) 976 Developed technology 6,131 (2,606 ) 3,525 24,548 (7,956 ) 16,592 Intangible assets not subject to amortization (Indefinite-lived) Emissions allowance 197 — 197 Trade name 2,158 — 2,158 Total $ 26,903 $ (7,956 ) $ 18,947 |
Estimated Amortization Expenses for Succeeding Five Fiscal Years | Based on identified intangible assets that are subject to amortization as of June 30, 2019 , we expect future amortization expenses for each period to be as follows: Total Remainder of 2019 2020 2021 2022 2023 2024 Thereafter (thousands of dollars) Customer relationships $ 11,516 $ 562 $ 1,123 $ 1,123 1,123 1,123 1,123 $ 5,339 Non-compete agreements 4 4 — — — — — — Licenses and permits 922 53 106 101 86 86 86 404 Developed technology 3,219 307 613 613 613 613 460 — Total future amortization expense $ 15,661 $ 926 $ 1,842 $ 1,837 $ 1,822 $ 1,822 $ 1,669 $ 5,743 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease information | The components of lease expense were as follows: ($ in thousands) Classification in the Condensed Consolidated Statements of Income Three Months Ended Six Months Ended Operating lease cost (a) Cost of sales, exclusive of depreciation and amortization $ 1,152 $ 2,291 Operating lease cost (a) Selling, general and administrative 38 72 Total operating lease cost $ 1,190 $ 2,363 Finance lease cost: Amortization of right-of-use assets Depreciation $ — — Interest on lease liabilities Interest Expense — — Total finance lease cost $ — $ — Total lease cost $ 1,190 $ 2,363 (a) Short-term lease costs were approximately $64 thousand during the period. ($ in thousands) Classification on the Condensed Consolidated Balance Sheets June 30, 2019 Assets: Operating Operating lease assets $ 15,197 Finance Property, plant, and equipment — Total leased assets $ 15,197 Liabilities: Current Operating Current portion of operating lease liabilities $ 3,412 Finance Short-term debt and current portion of long-term debt — Noncurrent Operating Operating lease liabilities 11,785 Finance Long-term debt — Total lease liabilities $ 15,197 ($ in thousands) Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 1,127 $ 2,260 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 $ 25 $ 138 Finance leases — — June 30, 2019 Weighted-average remaining lease term (in years): Operating leases 4.8 Finance leases 0.0 Weighted-average discount rate: Operating leases 4.5 % Finance leases — % |
Operating lease maturities | As of June 30, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 4,010 $ — 2021 3,576 — 2022 3,480 — 2023 2,806 — 2024 1,460 — Thereafter 1,549 — Total lease payments $ 16,881 $ — Less: Interest 1,684 — Total lease obligations $ 15,197 $ — |
Finance lease maturities | As of June 30, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 4,010 $ — 2021 3,576 — 2022 3,480 — 2023 2,806 — 2024 1,460 — Thereafter 1,549 — Total lease payments $ 16,881 $ — Less: Interest 1,684 — Total lease obligations $ 15,197 $ — |
Operating leases, future minimum rental payments | Minimum lease commitments as of December 31, 2018 that have initial or remaining lease terms in excess of one year are as follows: ($ in thousands) Operating Leases 2019 $ 3,670 2020 3,583 2021 3,418 2022 3,107 2023 2,288 Beyond 2023 2,065 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: June 30, 2019 December 31, 2018 (thousands of dollars) Accrued state taxes 262 210 Accrued property taxes 1,720 — Accrued payroll 981 936 Accrued interest 32 31 Accrued officer compensation 650 — Accrued restructuring & severance 37 1,221 Accrued foreign taxes — 802 Other 1,733 2,239 Total $ 5,415 $ 5,439 |
LIABILITIES AND LONG-TERM DEBT
LIABILITIES AND LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt and long-term obligations are summarized as follows: June 30, 2019 December 31, 2018 (thousands of dollars) Revolving Facility 16,000 18,000 Term Loan Facility 83,125 85,312 Loan fees (740 ) (830 ) Total long-term debt 98,385 102,482 Less current portion including loan fees 4,194 4,194 Total long-term debt, less current portion including loan fees 94,191 98,288 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Status of Stock Option Awards and Warrants | A summary of the status of the Company’s stock option and warrant awards is as follows: Stock Options and Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Intrinsic Value (in thousands) Outstanding at January 1, 2019 745,830 10.33 Granted — — Exercised (85,000 ) 7.71 Forfeited (108,830 ) 8.80 Outstanding at June 30, 2019 552,000 11.04 3.8 $ — Expected to vest — $ — Exercisable at June 30, 2019 552,000 11.04 3.8 $ — |
Restricted Stock Units Activity | A summary of the status of the Company's restricted stock units activity is as follows: Shares of Restricted Stock Units Weighted Average Grant Date Price per Share Outstanding at January 1, 2019 405,675 11.27 Granted 190,615 9.22 Forfeited (64,463 ) 12.13 Vested (136,568 ) 11.86 Outstanding at June 30, 2019 395,259 9.77 Expected to vest 395,259 |
NET INCOME PER COMMON SHARE A_2
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Income Per Share Computation | The following table (in thousands, except per share amounts) sets forth the computation of basic and diluted net income per share attributable to Trecora Resources for the three months ended June 30, 2019 and 2018 , respectively. Three Months Ended Three Months Ended Income Shares Per Share Amount Income Shares Per Share Amount Basic Net Income per Share: Net Income Attributable to Trecora Resources $ 2,404 24,696 $ 0.10 $ 2,215 24,370 $ 0.09 Unvested restricted stock units 395 349 Dilutive stock options outstanding — 295 Diluted Net Income per Share: Net Income Attributable to Trecora Resources $ 2,404 25,091 $ 0.10 $ 2,215 25,014 $ 0.09 Six Months Ended Six Months Ended Income Shares Per Share Amount Income Shares Per Share Amount Basic Net Income per Share: Net Income Attributable to Trecora Resources $ 4,155 24,675 $ 0.17 $ 4,567 24,354 $ 0.19 Unvested restricted stock units 414 376 Dilutive stock options outstanding — 389 Diluted Net Income per Share: Net Income Attributable to Trecora Resources $ 4,155 25,089 $ 0.17 $ 4,567 25,119 $ 0.18 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Three Months Ended June 30, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 58,584 $ 6,745 $ — $ — $ 65,329 Processing fees 1,527 2,515 — — 4,042 Total revenues 60,111 9,260 — — 69,371 Operating profit (loss) before depreciation and amortization 10,028 766 (2,182 ) — 8,612 Operating profit (loss) 7,104 (633 ) (2,195 ) — 4,276 Profit (loss) before taxes 6,375 (1,013 ) (2,294 ) — 3,068 Depreciation and amortization 2,925 1,399 12 — 4,336 Capital expenditures 1,461 426 — — 1,887 Three Months Ended June 30, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 56,135 $ 7,434 $ — — $ 63,569 Processing fees 1,685 2,852 — — 4,537 Total revenues 57,820 10,286 — — 68,106 Operating profit (loss) before depreciation and amortization 6,095 1,164 (834 ) — 6,425 Operating profit (loss) 4,440 (201 ) (842 ) — 3,397 Profit (loss) before taxes 3,859 (506 ) (542 ) — 2,811 Depreciation and amortization 1,655 1,365 8 — 3,028 Capital expenditures 3,529 877 — — 4,406 Six Months Ended June 30, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 114,074 $ 12,748 $ — $ — $ 126,822 Processing fees 2,910 4,794 — — 7,704 Total revenues 116,984 17,542 — — 134,526 Operating profit (loss) before depreciation and amortization 21,435 (83 ) (4,487 ) — 16,865 Operating profit (loss) 15,437 (2,830 ) (4,521 ) — 8,086 Profit (loss) before taxes 13,510 (3,552 ) (4,661 ) — 5,297 Depreciation and amortization 5,999 2,747 32 — 8,778 Capital expenditures 2,839 935 — — 3,774 Six Months Ended June 30, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Product sales $ 116,420 $ 13,817 $ — 31 $ 130,268 Processing fees 3,713 6,064 — (198 ) 9,579 Total revenues 120,133 19,881 — (167 ) 139,847 Operating profit (loss) before depreciation and amortization 14,488 1,554 (2,982 ) — 13,060 Operating profit (loss) 11,119 (1,115 ) (2,998 ) — 7,006 Profit (loss) before taxes 9,913 (1,687 ) (2,473 ) — 5,753 Depreciation and amortization 3,369 2,669 16 — 6,054 Capital expenditures 13,812 1,622 — — 15,434 June 30, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Trade receivables, product sales $ 23,465 $ 4,097 $ — $ — $ 27,562 Trade receivables, processing fees 1,042 1,914 — — 2,956 Goodwill and intangible assets, net — 39,814 — — 39,814 Total assets 299,103 114,409 91,247 (166,126 ) 338,633 December 31, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Trade receivables, product sales $ 21,915 $ 3,173 $ — $ — $ 25,088 Trade receivables, processing fees 633 1,391 — — 2,024 Goodwill and intangible assets, net — 40,745 — — 40,745 Total assets 284,367 115,366 91,474 (161,239 ) 329,968 |
INVESTMENT IN AMAK (Tables)
INVESTMENT IN AMAK (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Operating Results and Financial Position for Equity Method Investments | The summarized results of operation and financial position for AMAK are as follows: Results of Operations Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (thousands of dollars) (thousands of dollars) Sales $ 20,566 $ 19,494 $ 41,230 $ 33,581 Cost of sales 18,162 16,555 36,732 29,061 Gross profit 2,404 2,939 4,498 4,520 Selling, general, and administrative 2,807 2,892 5,545 4,415 Operating (loss) income (403 ) 47 (1,047 ) 105 Other (expense) income (75 ) 15 353 34 Finance and interest expense (448 ) (388 ) (893 ) (785 ) Loss before Zakat and income taxes (926 ) (326 ) (1,587 ) (646 ) Zakat and income taxes 366 — 888 — Net Loss $ (1,292 ) $ (326 ) $ (2,475 ) $ (646 ) Financial Position June 30, December 31, 2019 2018 (thousands of dollars) Current assets $ 35,658 $ 44,093 Noncurrent assets 197,093 212,291 Total assets $ 232,751 $ 256,384 Current liabilities $ 19,201 $ 17,160 Long term liabilities 74,111 77,366 Stockholders' equity 139,439 161,858 $ 232,751 $ 256,384 The equity in the (losses) earnings of AMAK reflected on the consolidated statements of income for the three and six months ended June 30, 2019 , and 2018 , is comprised of the following: Three Months Ended Six Months Ended 2019 2018 2019 2018 (thousands of dollars) (thousands of dollars) AMAK Net Loss $ (1,292 ) $ (326 ) $ (2,475 ) $ (646 ) Percentage of Ownership 33.29 % 33.41 % 33.29 % 33.41 % Company's share of loss reported by AMAK $ (429 ) $ (109 ) $ (824 ) $ (216 ) Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK 337 337 674 674 Equity in (losses) earnings of AMAK $ (91 ) $ 228 $ (150 ) $ 458 |
GENERAL (Details)
GENERAL (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019USD ($)segment | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Noncontrolling Interest [Line Items] | |||
Number of operating segments | segment | 2 | ||
Lease right of use assets, net | $ 15,197 | $ 17,000 | $ 0 |
Operating lease liability | $ 15,197 | $ 17,000 | |
Al Masane Al Kobra (AMAK) | |||
Noncontrolling Interest [Line Items] | |||
Percentage of ownership | 33.00% | ||
Pioche Ely Valley Mines, Inc. (PEVM) | |||
Noncontrolling Interest [Line Items] | |||
Percentage of ownership | 55.00% |
TRADE RECEIVABLES (Details)
TRADE RECEIVABLES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Trade receivables | $ 30,958 | $ 27,564 |
Less allowance for doubtful accounts | (440) | (452) |
Trade receivables, net | $ 30,518 | $ 27,112 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid license | $ 1,612 | $ 2,419 |
Spare parts | 1,667 | 1,597 |
Other prepaid expenses and assets | 672 | 648 |
Total prepaid expenses and other assets | $ 3,951 | $ 4,664 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 3,963 | $ 4,742 |
Work in process | 244 | 173 |
Finished products | 11,088 | 11,624 |
Total inventory | 15,295 | 16,539 |
Products in transit | $ 3,200 | $ 4,100 |
PLANT, PIPELINE AND EQUIPMENT_2
PLANT, PIPELINE AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Total plant, pipeline and equipment | $ 272,856 | $ 272,856 | $ 268,419 | ||
Less accumulated depreciation | (81,328) | (81,328) | (73,762) | ||
Net plant, pipeline and equipment | 191,528 | 191,528 | 194,657 | ||
Interest capitalized for construction | 0 | $ 400 | 0 | $ 700 | |
Capitalized labor costs | 0 | 900 | 100 | 2,100 | |
Amortization relating to the platinum catalyst | 200 | $ 0 | 500 | $ 0 | |
Platinum catalyst metal | |||||
Property, Plant and Equipment [Line Items] | |||||
Total plant, pipeline and equipment | 1,580 | 1,580 | 1,612 | ||
Catalyst | |||||
Property, Plant and Equipment [Line Items] | |||||
Total plant, pipeline and equipment | 3,974 | 3,974 | 3,131 | ||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Total plant, pipeline and equipment | 5,428 | 5,428 | 5,428 | ||
Plant, pipeline and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total plant, pipeline and equipment | 257,986 | 257,986 | 253,905 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Total plant, pipeline and equipment | $ 3,888 | $ 3,888 | $ 4,343 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Finite and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Intangible assets subject to amortization (Definite-lived) | |||||
Gross | $ 24,548 | $ 24,548 | $ 24,548 | ||
Accumulated Amortization | (8,887) | (8,887) | (7,956) | ||
Total | 15,661 | 15,661 | 16,592 | ||
Intangible assets not subject to amortization (Indefinite-lived) | |||||
Gross intangible assets | 26,903 | 26,903 | 26,903 | ||
Net intangible assets | 18,016 | 18,016 | 18,947 | ||
Amortization of intangible assets | 500 | $ 500 | 931 | $ 931 | |
Emissions allowance | |||||
Intangible assets not subject to amortization (Indefinite-lived) | |||||
Intangible assets not subject to amortization (Indefinite-lived) | 197 | 197 | 197 | ||
Trade name | |||||
Intangible assets not subject to amortization (Indefinite-lived) | |||||
Intangible assets not subject to amortization (Indefinite-lived) | 2,158 | 2,158 | 2,158 | ||
Customer relationships | |||||
Intangible assets subject to amortization (Definite-lived) | |||||
Gross | 16,852 | 16,852 | 16,852 | ||
Accumulated Amortization | (5,336) | (5,336) | (4,775) | ||
Total | 11,516 | 11,516 | 12,077 | ||
Non-compete agreements | |||||
Intangible assets subject to amortization (Definite-lived) | |||||
Gross | 94 | 94 | 94 | ||
Accumulated Amortization | (90) | (90) | (80) | ||
Total | 4 | 4 | 14 | ||
Licenses and permits | |||||
Intangible assets subject to amortization (Definite-lived) | |||||
Gross | 1,471 | 1,471 | 1,471 | ||
Accumulated Amortization | (549) | (549) | (495) | ||
Total | 922 | 922 | 976 | ||
Developed technology | |||||
Intangible assets subject to amortization (Definite-lived) | |||||
Gross | 6,131 | 6,131 | 6,131 | ||
Accumulated Amortization | (2,912) | (2,912) | (2,606) | ||
Total | $ 3,219 | $ 3,219 | $ 3,525 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Expected Future Amortization Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 15,661 | $ 16,592 |
Remainder of 2019 | 926 | |
2020 | 1,842 | |
2021 | 1,837 | |
2022 | 1,822 | |
2023 | 1,822 | |
2024 | 1,669 | |
Thereafter | 5,743 | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 11,516 | 12,077 |
Remainder of 2019 | 562 | |
2020 | 1,123 | |
2021 | 1,123 | |
2022 | 1,123 | |
2023 | 1,123 | |
2024 | 1,123 | |
Thereafter | 5,339 | |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 4 | 14 |
Remainder of 2019 | 4 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Licenses and permits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 922 | 976 |
Remainder of 2019 | 53 | |
2020 | 106 | |
2021 | 101 | |
2022 | 86 | |
2023 | 86 | |
2024 | 86 | |
Thereafter | 404 | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 3,219 | $ 3,525 |
Remainder of 2019 | 307 | |
2020 | 613 | |
2021 | 613 | |
2022 | 613 | |
2023 | 613 | |
2024 | 460 | |
Thereafter | $ 0 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Total operating lease cost | $ 1,190,000 | $ 2,363,000 |
Amortization of right-of-use assets | 0 | 0 |
Interest on lease liabilities | 0 | 0 |
Total finance lease cost | 0 | 0 |
Total lease cost | 1,190,000 | 2,363,000 |
Short-term lease costs | 64,000 | |
Cost of sales, exclusive of depreciation and amortization | ||
Lessee, Lease, Description [Line Items] | ||
Total operating lease cost | 1,152,000 | 2,291,000 |
Selling, general and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Total operating lease cost | $ 38,000 | $ 72,000 |
LEASES - Balance Sheet Classifi
LEASES - Balance Sheet Classifications (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
Operating | $ 15,197 | $ 17,000 | $ 0 |
Finance | 0 | ||
Total leased assets | 15,197 | ||
Current portion of operating lease liabilities | 3,412 | 0 | |
Short-term debt and current portion of long-term debt | 0 | ||
Operating lease liabilities | 11,785 | $ 0 | |
Long-term debt | 0 | ||
Total lease liabilities | $ 15,197 | $ 17,000 |
LEASES - Cash Flow Classificati
LEASES - Cash Flow Classifications (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows used for operating leases | $ 1,127,000 | $ 2,260,000 |
Operating cash flows used for finance leases | 0 | 0 |
Financing cash flows used for finance leases | 0 | 0 |
Right-of-use assets obtained in exchange for lease obligations, Operating leases | 25,000 | 138,000 |
Right-of-use assets obtained in exchange for lease obligations, Finance leases | $ 0 | $ 0 |
LEASES - Terms and Discount Rat
LEASES - Terms and Discount Rates (Details) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term, Operating leases | 4 years 10 months |
Weighted-average remaining lease term, Finance leases | 0 days |
Weighted-average discount rate, Operating leases | 4.50% |
Weighted-average discount rate, Finance leases | 0.00% |
LEASES - Maturities (Details)
LEASES - Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Leases | |||
2020 | $ 4,010 | ||
2021 | 3,576 | ||
2022 | 3,480 | ||
2023 | 2,806 | ||
2024 | 1,460 | ||
Thereafter | 1,549 | ||
Total lease payments | 16,881 | ||
Less: Interest | 1,684 | ||
Total lease obligations | $ 15,197 | $ 17,000 | |
Operating Leases | |||
2019 | $ 3,670 | ||
2020 | 3,583 | ||
2021 | 3,418 | ||
2022 | 3,107 | ||
2023 | 2,288 | ||
Beyond 2023 | $ 2,065 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accrued Liabilities, Current [Abstract] | ||
Accrued state taxes | $ 262 | $ 210 |
Accrued property taxes | 1,720 | 0 |
Accrued payroll | 981 | 936 |
Accrued interest | 32 | 31 |
Accrued officer compensation | 650 | 0 |
Accrued restructuring & severance | 37 | 1,221 |
Accrued foreign taxes | 0 | 802 |
Other | 1,733 | 2,239 |
Total | $ 5,415 | $ 5,439 |
LIABILITIES AND LONG-TERM DEB_2
LIABILITIES AND LONG-TERM DEBT LIABILITIES AND LONG-TERM DEBT - Additional Information (Details) $ in Thousands | 1 Months Ended | ||||||
Aug. 08, 2019USD ($) | Dec. 31, 2019 | Sep. 30, 2019 | Aug. 07, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019 | Dec. 31, 2018USD ($) | |
Line of Credit Facility [Line Items] | |||||||
Unamortized debt issuance costs | $ 740 | $ 830 | |||||
Amended And Restated Credit Agreement, Fourth Amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Unamortized debt issuance costs | 900 | ||||||
Revolving facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Long-term debt | 16,000 | $ 18,000 | |||||
Revolving facility | Amended And Restated Credit Agreement, Fourth Amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Available remaining borrowing capacity | $ 42,000 | ||||||
Effective interest rate | 4.87% | ||||||
TOCCO | Amended And Restated Credit Agreement, Sixth Amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Leverage ratio | 4.50 | 4.75 | |||||
Scenario, Forecast | TOCCO | Amended And Restated Credit Agreement, Sixth Amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Leverage ratio | 3.50 | 4 | |||||
Subsequent Event | Revolving facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Optional principal payment | $ 4,000 | ||||||
Outstanding line of credit | $ 12,000 | $ 16,000 |
LIABILITIES AND LONG-TERM DEB_3
LIABILITIES AND LONG-TERM DEBT LIABILITIES AND LONG-TERM DEBT - Schedule of Carrying Amounts of and Issuance Costs of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Debt issuance costs | $ (740) | $ (830) |
Total long-term debt | 98,385 | 102,482 |
Less current portion including loan fees | 4,194 | 4,194 |
Total long-term debt, less current portion including loan fees | 94,191 | 98,288 |
Acquisition loan | ||
Line of Credit Facility [Line Items] | ||
Total debt, gross | 83,125 | 85,312 |
Revolving facility | ||
Line of Credit Facility [Line Items] | ||
Total debt, gross | $ 16,000 | $ 18,000 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2012 | Jul. 31, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense | $ 300 | $ (200) | $ 558 | $ 372 | ||
Stock Option Plan for Key Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized (in shares) | 1,000,000 | |||||
Stock Option Plan for Key Employees | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation, term of award | 10 years | |||||
Options, weighted average grant-date fair value (in dollars per share) | $ 0 | $ 0 | ||||
Shares issued during period (in shares) | 11,000 | |||||
Stock Option Plan for Key Employees | Stock Options and Warrants | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards granted during period (in shares) | 0 | 0 | 0 | 0 | ||
Options granted (in shares) | 0 | 0 | 0 | |||
Exercised, intrinsic value | $ 100 | $ 600 | ||||
Awards exercised (in shares) | 85,000 | |||||
Trecora Resources Stock and Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized (in shares) | 2,500,000 | |||||
Minimum | Stock Option Plan for Key Employees | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Minimum | Trecora Resources Stock and Incentive Plan | Restricted Stock Unit Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 2 years 6 months | |||||
Maximum | Stock Option Plan for Key Employees | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 5 years | |||||
Maximum | Trecora Resources Stock and Incentive Plan | Restricted Stock Unit Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 5 years | |||||
COMMON STOCK | Stock Option Plan for Key Employees | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options outstanding, in-the-money (in shares) | 100,000 | 100,000 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option and Warrant Awards (Details) - Stock Option Plan for Key Employees - Stock Options and Warrants - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | |
Stock Options and Warrants [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 745,830 | ||
Granted (in shares) | 0 | 0 | 0 |
Exercised (in shares) | (85,000) | ||
Forfeited (in shares) | (108,830) | ||
Outstanding at end of period (in shares) | 552,000 | 552,000 | |
Expected to vest (in shares) | 0 | 0 | |
Exercisable, end of period (in shares) | 552,000 | 552,000 | |
Weighted Average Exercise Price Per Share [Roll Forward] | |||
Outstanding at beginning of period (in dollars per share) | $ 10.33 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 7.71 | ||
Forfeited (in dollars per share) | 8.80 | ||
Outstanding at end of period (in dollars per share) | $ 11.04 | 11.04 | |
Exercisable, end of period (in dollars per share) | $ 11.04 | $ 11.04 | |
Weighted Average Remaining Contractual Life | |||
Outstanding, weighted average remaining contractual life | 3 years 9 months | ||
Exercisable, weighted average remaining contractual life | 3 years 9 months | ||
Outstanding, Intrinsic Value | $ 0 | $ 0 | |
Expected to vest, Intrinsic Value | 0 | 0 | |
Exercisable, Intrinsic Value | $ 0 | $ 0 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Unit Activity (Details) - Restricted Stock Unit Awards | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Shares of Restricted Stock Units | |
Outstanding at beginning of period (in shares) | 405,675 |
Granted (in shares) | 190,615 |
Forfeited (in shares) | (64,463) |
Vested (in shares) | (136,568) |
Outstanding at end of period (in shares) | 395,259 |
Expected to vest (in shares) | 395,259 |
Weighted Average Grant Date Price per Share | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 11.27 |
Granted (in dollars per share) | $ / shares | 9.22 |
Forfeited (in dollars per share) | $ / shares | 12.13 |
Vested (in dollars per share) | $ / shares | 11.86 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 9.77 |
NET INCOME PER COMMON SHARE A_3
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO TRECORA RESOURCES (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Basic Net Income per Share: | ||||
Net Income Attributable to Trecora Resources | $ 2,404 | $ 2,215 | $ 4,155 | $ 4,567 |
Net Income (Loss) Attributable to Trecora Resources (in shares) | 24,696,000 | 24,370,000 | 24,675,000 | 24,354,000 |
Net Income Attributable to Trecora Resources (in dollars per share) | $ 0.10 | $ 0.09 | $ 0.17 | $ 0.19 |
Unvested restricted stock units (in shares) | 395,000 | 349,000 | 414,000 | 376,000 |
Dilutive stock options outstanding (in shares) | 0 | 295,000 | 0 | 389,000 |
Diluted Net Income per Share: | ||||
Net Income Attributable to Trecora Resources | $ 2,404 | $ 2,215 | $ 4,155 | $ 4,567 |
Net Income (Loss) Attributable to Trecora Resources (in shares) | 25,091,000 | 25,014,000 | 25,089,000 | 25,119,000 |
Net Income Attributable to Trecora Resources (in dollars per share) | $ 0.10 | $ 0.09 | $ 0.17 | $ 0.18 |
Potential common stock shares issuable upon exercise of options (in shares) | 552,000 | 924,860 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||
Total revenues | $ 69,371 | $ 68,106 | $ 134,526 | $ 139,847 | |
Operating profit (loss) before depreciation and amortization | 8,612 | 6,425 | 16,865 | 13,060 | |
Operating profit (loss) | 4,276 | 3,397 | 8,086 | 7,006 | |
Profit (loss) before taxes | 3,068 | 2,811 | 5,297 | 5,753 | |
Depreciation and amortization | 4,336 | 3,028 | 8,778 | 6,054 | |
Capital expenditures | 1,887 | 4,406 | 3,774 | 15,434 | |
Trade receivables, net | 30,518 | 30,518 | $ 27,112 | ||
Goodwill and intangible assets, net | 39,814 | 39,814 | 40,745 | ||
Total assets | 338,633 | 338,633 | 329,968 | ||
Product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 65,329 | 63,569 | 126,822 | 130,268 | |
Trade receivables, net | 27,562 | 27,562 | 25,088 | ||
Processing fees | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 4,042 | 4,537 | 7,704 | 9,579 | |
Trade receivables, net | 2,956 | 2,956 | 2,024 | ||
Operating Segments | Specialty Petrochemicals | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 60,111 | 57,820 | 116,984 | 120,133 | |
Operating profit (loss) before depreciation and amortization | 10,028 | 6,095 | 21,435 | 14,488 | |
Operating profit (loss) | 7,104 | 4,440 | 15,437 | 11,119 | |
Profit (loss) before taxes | 6,375 | 3,859 | 13,510 | 9,913 | |
Depreciation and amortization | 2,925 | 1,655 | 5,999 | 3,369 | |
Capital expenditures | 1,461 | 3,529 | 2,839 | 13,812 | |
Goodwill and intangible assets, net | 0 | 0 | 0 | ||
Total assets | 299,103 | 299,103 | 284,367 | ||
Operating Segments | Specialty Petrochemicals | Product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 58,584 | 56,135 | 114,074 | 116,420 | |
Trade receivables, net | 23,465 | 23,465 | 21,915 | ||
Operating Segments | Specialty Petrochemicals | Processing fees | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 1,527 | 1,685 | 2,910 | 3,713 | |
Trade receivables, net | 1,042 | 1,042 | 633 | ||
Operating Segments | Specialty Waxes | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 9,260 | 10,286 | 17,542 | 19,881 | |
Operating profit (loss) before depreciation and amortization | 766 | 1,164 | (83) | 1,554 | |
Operating profit (loss) | (633) | (201) | (2,830) | (1,115) | |
Profit (loss) before taxes | (1,013) | (506) | (3,552) | (1,687) | |
Depreciation and amortization | 1,399 | 1,365 | 2,747 | 2,669 | |
Capital expenditures | 426 | 877 | 935 | 1,622 | |
Goodwill and intangible assets, net | 39,814 | 39,814 | 40,745 | ||
Total assets | 114,409 | 114,409 | 115,366 | ||
Operating Segments | Specialty Waxes | Product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 6,745 | 7,434 | 12,748 | 13,817 | |
Trade receivables, net | 4,097 | 4,097 | 3,173 | ||
Operating Segments | Specialty Waxes | Processing fees | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 2,515 | 2,852 | 4,794 | 6,064 | |
Trade receivables, net | 1,914 | 1,914 | 1,391 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Operating profit (loss) before depreciation and amortization | (2,182) | (834) | (4,487) | (2,982) | |
Operating profit (loss) | (2,195) | (842) | (4,521) | (2,998) | |
Profit (loss) before taxes | (2,294) | (542) | (4,661) | (2,473) | |
Depreciation and amortization | 12 | 8 | 32 | 16 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Goodwill and intangible assets, net | 0 | 0 | 0 | ||
Total assets | 91,247 | 91,247 | 91,474 | ||
Corporate | Product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Trade receivables, net | 0 | 0 | 0 | ||
Corporate | Processing fees | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Trade receivables, net | 0 | 0 | 0 | ||
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | (167) | |
Operating profit (loss) before depreciation and amortization | 0 | 0 | 0 | 0 | |
Operating profit (loss) | 0 | 0 | 0 | 0 | |
Profit (loss) before taxes | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Goodwill and intangible assets, net | 0 | 0 | 0 | ||
Total assets | (166,126) | (166,126) | (161,239) | ||
Eliminations | Product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 31 | |
Trade receivables, net | 0 | 0 | 0 | ||
Eliminations | Processing fees | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | $ 0 | 0 | $ (198) | |
Trade receivables, net | $ 0 | $ 0 | $ 0 |
POST-RETIREMENT OBLIGATIONS (De
POST-RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Management | Postretirement Benefits | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Post retirement liability | $ 0.4 | $ 0.4 |
INVESTMENT IN AMAK - Additional
INVESTMENT IN AMAK - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019USD ($)shares | Mar. 31, 2018shares | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 29, 2019 | Mar. 31, 2019 | Dec. 31, 2018USD ($) | Mar. 30, 2018 | Jun. 30, 1986ر.س / $ | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Proceeds from AMAK share repurchase | $ 440 | $ 0 | |||||||
Treasury Stock | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of stock exchanged (in shares) | shares | 65,000 | ||||||||
AMAK | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Percentage of ownership | 33.30% | 33.41% | 33.30% | 33.41% | 33.40% | 33.29% | 33.40% | 33.44% | |
Investment in equity method investment | $ 37,300 | $ 37,300 | $ 38,700 | ||||||
Number of stock exchanged (in shares) | shares | 24,489 | ||||||||
Exchange rate | ر.س / $ | 3.75 | ||||||||
Proceeds from AMAK share repurchase | 400 | ||||||||
Amount receivable for unreimbursed travel expenses | $ 100 | $ 100 | $ 100 | ||||||
Chief Executive Officer | AMAK | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Shares of equity transferred to related party (in shares) | shares | 100,000 | ||||||||
Parent | AMAK | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Percentage of ownership | 33.40% | 33.40% |
INVESTMENT IN AMAK - Summary of
INVESTMENT IN AMAK - Summary of Operating Results (Details) - AMAK - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||
Sales | $ 20,566 | $ 19,494 | $ 41,230 | $ 33,581 |
Cost of sales | 18,162 | 16,555 | 36,732 | 29,061 |
Gross profit | 2,404 | 2,939 | 4,498 | 4,520 |
Selling, general, and administrative | 2,807 | 2,892 | 5,545 | 4,415 |
Operating (loss) income | (403) | 47 | (1,047) | 105 |
Other (expense) income | (75) | 15 | 353 | 34 |
Finance and interest expense | (448) | (388) | (893) | (785) |
Loss before Zakat and income taxes | (926) | (326) | (1,587) | (646) |
Zakat and income taxes | 366 | 0 | 888 | 0 |
Net Loss | $ (1,292) | $ (326) | $ (2,475) | $ (646) |
INVESTMENT IN AMAK - Summary _2
INVESTMENT IN AMAK - Summary of Financial Position (Details) - AMAK - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 35,658 | $ 44,093 |
Noncurrent assets | 197,093 | 212,291 |
Total assets | 232,751 | 256,384 |
Current liabilities | 19,201 | 17,160 |
Long term liabilities | 74,111 | 77,366 |
Stockholders' equity | 139,439 | 161,858 |
Total liabilities and Shareholders' equity | $ 232,751 | $ 256,384 |
INVESTMENT IN AMAK - Equity in
INVESTMENT IN AMAK - Equity in the Income or Loss of Equity Method Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity in (losses) earnings of AMAK | $ (91) | $ 228 | $ (150) | $ 458 | |||||
AMAK | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
AMAK Net Loss | $ (1,292) | $ (326) | $ (2,475) | $ (646) | |||||
Percentage of Ownership | 33.30% | 33.41% | 33.30% | 33.41% | 33.40% | 33.29% | 33.40% | 33.41% | 33.44% |
Company's share of loss reported by AMAK | $ (429) | $ (109) | $ (824) | $ (216) | |||||
Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK | 337 | 337 | 674 | 674 | |||||
Equity in (losses) earnings of AMAK | $ (91) | $ 228 | $ (150) | $ 458 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Executive Chairman - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Consulting fees | $ 28 | $ 19 | $ 50 | $ 50 |
Period of consulting agreement | 3 years |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) ر.س in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Jun. 30, 2019SAR (ر.س) | Oct. 24, 2010USD ($) | Oct. 24, 2010SAR (ر.س) | |
Guarantor Obligations [Line Items] | |||||||||
Shortfall fee expenses | $ 0.1 | $ 0.4 | $ 0.7 | $ 0.5 | |||||
Expenses for environmental monitoring, compliance, and improvements | 0.2 | $ 0.2 | 0.4 | $ 0.3 | |||||
Saudi Industrial Development Fund Limited Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Loan guarantee | 41.00% | 41.00% | |||||||
Principal amount of loan guaranteed | $ 88 | ر.س 330.0 | |||||||
Amount of maximum exposure | $ 77.3 | $ 77.3 | ر.س 290.0 | $ 36.1 | ر.س 135.3 | ||||
Scenario, Forecast | Saudi Industrial Development Fund Limited Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Amount of maximum exposure | $ 8 | ر.س 30.0 |