Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 02, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TRECORA RESOURCES | ||
Entity Central Index Key | 0000007039 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 175 | ||
Entity Common Stock, Shares Outstanding | 24,750,835 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Document Period End Date | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 6,145 | $ 6,735 |
Trade receivables, net (Note 4) | 26,320 | 27,112 |
Inventories (Note 5) | 13,624 | 16,539 |
Investment in AMAK (held-for-sale) (Note 6) | 32,872 | 38,746 |
Prepaid expenses and other assets (Note 7) | 4,947 | 4,664 |
Taxes receivable | 182 | 182 |
Total current assets | 84,090 | 93,978 |
PLANT, PIPELINE, AND EQUIPMENT, NET (Note 8) | 188,919 | 194,657 |
OPERATING LEASE ASSETS, NET (Note 9) | 13,512 | |
GOODWILL (Note 10) | 0 | 21,798 |
OTHER INTANGIBLE ASSETS, NET (Note 10) | 14,736 | 18,947 |
MINERAL PROPERTIES IN THE UNITED STATES (Note 11) | 562 | 588 |
TOTAL ASSETS | 301,819 | 329,968 |
CURRENT LIABILITIES | ||
Accounts payable | 14,603 | 19,106 |
Accrued liabilities (Note 12) | 5,740 | 5,439 |
Current portion of post-retirement benefit (Note 22) | 2 | 19 |
Current portion of long-term debt (Note 13) | 4,194 | 4,194 |
Current portion of operating lease (Note 9) | 3,174 | |
Current portion of other liabilities | 922 | 733 |
Total current liabilities | 28,635 | 29,491 |
LONG-TERM DEBT, net of current portion (Note 13) | 79,095 | 98,288 |
POST- RETIREMENT BENEFIT, net of current portion (Note 22) | 338 | 358 |
OPERATING LEASE LONG TERM (Note 9) | 10,338 | |
OTHER LIABILITIES, net of current portion | 595 | 994 |
DEFERRED INCOME TAXES (Note 16) | 11,375 | 15,676 |
Total liabilities | 130,376 | 144,807 |
EQUITY | ||
Common Stock ‑ authorized 40 million shares of $.10 par value; issued 24.8 and 24.6 million in 2019 and 2018, respectively, and outstanding 24.8 and 24.5 million in 2019 and 2018, respectively | 2,475 | 2,463 |
Additional Paid-in Capital | 59,530 | 58,294 |
Common Stock in Treasury, at cost nil and 0.1 million shares in 2019 and 2018, respectively | 0 | (8) |
Retained Earnings | 109,149 | 124,123 |
Total Trecora Resources Stockholders' Equity | 171,154 | 184,872 |
Noncontrolling interest | 289 | 289 |
Total equity | 171,443 | 185,161 |
TOTAL LIABILITIES AND EQUITY | $ 301,819 | $ 329,968 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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) | 24,800,000 | 24,600,000 |
Common stock, shares outstanding (in shares) | 24,800,000 | 24,500,000 |
Treasury stock (in shares) | 0 | 100,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Revenues | $ 258,959 | $ 287,932 | $ 245,143 |
Operating costs and expenses | |||
Cost of sales and processing (including depreciation and amortization of $15,361, $13,618, and $10,089, respectively) | 220,444 | 260,114 | 203,582 |
Gross Profit | 38,515 | 27,818 | 41,561 |
General and Administrative Expenses | |||
General and administrative | 24,386 | 22,532 | 22,414 |
Impairment of goodwill and certain intangibles (Note 10) | 24,152 | 0 | 0 |
Restructuring and severance (Note 21) | 0 | 2,347 | 0 |
Depreciation | 840 | 740 | 872 |
Total General and Administrative Expenses | 49,378 | 25,619 | 23,286 |
Operating income (loss) | (10,863) | 2,199 | 18,275 |
Other expenses | |||
Interest expense | 5,139 | 4,100 | 2,931 |
Loss on extinguishment of debt | 0 | 315 | 0 |
Loss on disposal of assets | 680 | 0 | 0 |
Miscellaneous (income) expense | (232) | 158 | 60 |
Total other income (expense) | 5,587 | 4,573 | 2,991 |
Income (loss) from continuing operations before income tax benefit | (16,450) | (2,374) | 15,284 |
Income tax benefit | 3,566 | 646 | 6,228 |
Income (loss) from continuing operations | (12,884) | (1,728) | 21,512 |
Loss from discontinued operations, net of tax | (2,090) | (604) | (3,503) |
Net income (loss) | $ (14,974) | $ (2,332) | $ 18,009 |
Basic income (loss) per common share | |||
Basic earnings (loss) per share, continuing operations (in dollars per share) | $ (0.52) | $ (0.07) | $ 0.89 |
Basic earnings (loss) per share, discontinued operations (in dollars per share) | (0.08) | (0.02) | (0.14) |
Basic earnings (loss) per share (in dollars per share) | $ (0.61) | $ (0.10) | $ 0.74 |
Weighted average shares outstanding, basic (in shares) | 24,698 | 24,438 | 24,294 |
Diluted income (loss) per common share: | |||
Diluted earnings (loss) per share, continuing operations (in dollars per share) | $ (0.52) | $ (0.07) | $ 0.86 |
Diluted earnings (loss) per share, discontinued operations (in dollars per share) | (0.08) | (0.02) | (0.14) |
Diluted earnings (loss) per share (in dollars per share) | $ (0.61) | $ (0.10) | $ 0.72 |
Weighted average shares outstanding, diluted (in shares) | 24,698 | 24,438 | 25,129 |
Product sales | |||
Revenues | |||
Revenues | $ 243,314 | $ 269,780 | $ 227,334 |
Processing fees | |||
Revenues | |||
Revenues | $ 15,645 | $ 18,152 | $ 17,809 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Costs and Expenses [Abstract] | |||
Depreciation and amortization included in the cost of specialty petrochemicals, product sales, and processing | $ 15,361 | $ 13,618 | $ 10,089 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Trecora Resources | Noncontrolling Interest |
Balance (in shares) at Dec. 31, 2016 | 24,222,000 | ||||||
Balance at Dec. 31, 2016 | $ 164,376 | $ 2,451 | $ 53,474 | $ (284) | $ 108,446 | $ 164,087 | $ 289 |
Stock options | |||||||
Issued to Directors | 100 | 100 | 100 | ||||
Issued to Employees | 1,171 | 1,171 | 1,171 | ||||
Restricted stock units | |||||||
Issued to Directors | 310 | 310 | 310 | ||||
Issued to Employees | 1,136 | 1,136 | 1,136 | ||||
Common stock | |||||||
Issued to Directors (in shares) | 29,000 | ||||||
Issued to Directors | (55) | (84) | 29 | (55) | |||
Issued to Employees (in shares) | 57,000 | ||||||
Issued to Employees | (36) | (92) | 56 | (36) | |||
Stock Exchange (see Notes 10 & 18) | 0 | ||||||
Warrants (in shares) | 3,000 | ||||||
Warrants | 0 | (3) | 3 | ||||
Net Loss | 18,009 | 18,009 | 18,009 | ||||
Balance (in shares) at Dec. 31, 2017 | 24,311,000 | ||||||
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 | ||||
Cancellations (see Note 15) | (680) | (680) | (680) | ||||
Restricted stock units | |||||||
Issued to Directors | 338 | 338 | 338 | ||||
Issued to Employees | 1,939 | 1,939 | 1,939 | ||||
Common stock | |||||||
Issued to Directors (in shares) | 188,000 | ||||||
Issued to Directors | 588 | $ 10 | 489 | 89 | 588 | ||
Issued to Employees (in shares) | 183,000 | ||||||
Issued to Employees | 284 | $ 2 | 127 | $ 155 | 284 | ||
Stock Exchange (see Notes 10 & 18) (in shares) | (65,000) | (65,000) | |||||
Stock Exchange (see Notes 10 & 18) | (131) | (66) | $ (65) | (131) | |||
Warrants (in shares) | 9,000 | ||||||
Warrants | 0 | (9) | 9 | ||||
Net Loss | $ (2,332) | (2,332) | (2,332) | ||||
Balance (in shares) at Dec. 31, 2018 | 24,500,000 | 24,626,000 | |||||
Balance at Dec. 31, 2018 | $ 185,161 | $ 2,463 | 58,294 | (8) | 124,123 | 184,872 | 289 |
Restricted stock units | |||||||
Issued to Directors | 353 | 353 | 353 | ||||
Issued to Employees | 883 | 883 | 883 | ||||
Common stock | |||||||
Issued to Directors (in shares) | 20,000 | ||||||
Issued to Directors | 9 | $ 1 | 8 | 9 | |||
Issued to Employees (in shares) | 104,000 | ||||||
Issued to Employees | 11 | $ 11 | 11 | ||||
Stock Exchange (see Notes 10 & 18) | 0 | ||||||
Net Loss | $ (14,974) | (14,974) | (14,974) | ||||
Balance (in shares) at Dec. 31, 2019 | 24,800,000 | 24,750,000 | |||||
Balance at Dec. 31, 2019 | $ 171,443 | $ 2,475 | $ 59,530 | $ 0 | $ 109,149 | $ 171,154 | $ 289 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (14,974) | $ (2,332) | $ 18,009 |
Loss from Discontinued Operations | (2,090) | (604) | (3,503) |
Income (Loss) from Continuing Operations | (12,884) | (1,728) | 21,512 |
Adjustments to reconcile net income (loss) attributable to Trecora Resources to net cash provided by operating activities: | |||
Depreciation and Amortization | 14,345 | 12,497 | 9,100 |
Amortization of Intangible Assets | 1,856 | 1,861 | 1,861 |
Unrealized Gain on Derivative Instruments | 0 | 0 | (58) |
Stock-based Compensation | 1,250 | 1,753 | 2,707 |
Deferred Income Taxes | (2,993) | (1,377) | (4,946) |
Postretirement Obligation | (38) | (825) | (11) |
Bad Debt Expense (Recoveries) | (23) | 152 | 0 |
Amortization of Loan Fees | 181 | 261 | 247 |
Loss on Extinguishment of Debt | 0 | 315 | 0 |
Loss on Disposal of Assets | 680 | 0 | 0 |
Impairment of Goodwill and Certain Intangibles | 24,152 | 0 | 0 |
Changes in Operating Assets and Liabilities: | |||
(Increase) Decrease in Trade Receivables | 816 | (1,485) | (3,586) |
Increase in Insurance Receivables | (1,148) | 0 | 0 |
(Increase) Decrease in Taxes Receivable | 0 | 5,401 | (1,601) |
(Increase) Decrease in Inventories | 2,914 | 1,911 | (579) |
(Increase) Decrease in Prepaid Expenses and Other Assets | 844 | (1,222) | (806) |
Increase in Other Liabilities | 581 | 33 | 142 |
Increase (Decrease) in Accounts Payable and Accrued Liabilities | (4,944) | 2,202 | 6,976 |
Net Cash Provided by Operating Activities - Continuing Operations | 25,589 | 19,749 | 30,958 |
Net Cash (Used in) Provided by Operating Activities - Discontinued Operations | (468) | 146 | (130) |
Net Cash Provided by Operating Activities - Continuing Operations | 25,121 | 19,895 | 30,828 |
INVESTING ACTIVITIES | |||
Additions to Plant, Pipeline and Equipment | (10,079) | (25,285) | (51,584) |
Proceeds from PEVM | 27 | 0 | 0 |
Net Cash Used in Investing Activities - Continuing Operations | (10,052) | (25,285) | (51,584) |
Net Cash Provided by (Used in) Investing Activities - Discontinued Operations | 4,021 | 5,414 | (107) |
Net Cash Used in Investing Activities | (6,031) | (19,871) | (51,691) |
FINANCING ACTIVITIES | |||
Issuance of Common Stock | 0 | 0 | 25 |
Net Cash (Paid) Received Related to Stock-Based Compensation | (305) | 860 | (106) |
Additions to Long-Term Debt | 2,000 | 18,177 | 26,000 |
Repayment of Long-Term Debt | (21,375) | (15,354) | (10,417) |
Net Cash (Used in) Provided by Financing Activities | (19,680) | 3,683 | 15,502 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (590) | 3,707 | (5,361) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 6,735 | 3,028 | 8,389 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 6,145 | 6,735 | 3,028 |
Supplemental disclosure of cash flow information: | |||
Cash payments for interest | 4,731 | 4,560 | 3,540 |
Cash payments (net of refunds) for taxes | 53 | (4,182) | 92 |
Supplemental disclosure of non-cash items: | |||
Capital expansion amortized to depreciation expense | 792 | 787 | 840 |
Stock exchange (Notes 10 & 18) | $ 0 | $ 131 | $ 0 |
BUSINESS AND OPERATIONS OF THE
BUSINESS AND OPERATIONS OF THE COMPANY | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND OPERATIONS OF THE COMPANY | BUSINESS AND OPERATIONS OF THE COMPANY Trecora Resources (the "Company") was organized as a Delaware corporation in 1967. The Company's principal business activities are the manufacturing of various specialty petrochemicals products, specialty waxes and providing custom processing services. The Company's specialty petrochemicals operations are primarily conducted through a wholly-owned subsidiary, Texas Oil and Chemical Co. II, Inc. ("TOCCO"). TOCCO owns all of the capital stock of South Hampton Resources, Inc. ("SHR") and Trecora Chemical, Inc. ("TC"). SHR owns all of the capital stock of Gulf State Pipe Line Company, Inc. ("GSPL"). SHR owns and operates a specialty petrochemicals product facility in Silsbee, Texas which manufactures high purity hydrocarbons used primarily in polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, Canadian tar sands, and in the catalyst support industry. TC owns and operates a facility located in Pasadena, Texas which manufactures specialty waxes and provides custom processing services. These specialty waxes are used in the production of coatings, hot melt adhesives and lubricants. GSPL owns and operates pipelines that connect the SHR facility to a natural gas line, to SHR's truck and rail loading terminal and to a major petroleum pipeline owned by an unaffiliated third party. The Company owns 33% of a Saudi Arabian joint stock company, Al Masane Al Kobra Mining Company ("AMAK") (see Note 10) and approximately 55% of the capital stock of a Nevada mining company, Pioche Ely Valley Mines, Inc. ("PEVM"), which does not conduct any substantial business activity but owns undeveloped properties in the United States. On October 2, 2019, we announced that we had entered into a Share Sale and Purchase Agreement (as amended, the “Purchase Agreement”) pursuant to which we have agreed to sell our entire investment in AMAK. The share sale is expected to close on or before March 31, 2020, subject to receipt of certain governmental approvals and other customary closing conditions. AMAK's historical financial results for the periods presented are reflected in our consolidated financial statements as discontinued operations. For further details, refer to Note 6 to the Consolidated Financial Statements. We attribute revenues to countries based upon the origination of the transaction. All of our revenues for the years ended December 31, 2019 , 2018 , and 2017 , originated in the United States. In addition, all of our long-lived assets are in the United States. For convenience in this report, the terms "Company", "our", "us" or "we" may be used to refer to Trecora Resources and its subsidiaries. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation – The consolidated financial statements include the balance sheets, statements of operations, stockholders' equity, and cash flows of the Company, TOCCO, TC, SHR, GSPL and PEVM. Other entities which are not controlled but over which the Company has the ability to exercise significant influence such as AMAK, are accounted for using the equity method of accounting. All intercompany profits, transactions and balances have been eliminated. Cash, Cash Equivalents and Short-Term Investments – Our principal banking and short-term investing activities are with local and national financial institutions. Short-term investments with an original maturity of three months or less are classified as cash equivalents. Inventories – Finished products and feedstock are recorded at the lower of cost, determined on the first-in, first-out method (FIFO), or market for SHR. For TC, inventory is recorded at the lower of cost or market as follows: (1) raw material cost is calculated using the weighted-average cost method and (2) product inventory cost is calculated using the specific cost method. Trade Receivables and Allowance for Doubtful Accounts – We evaluate the collectability of our trade receivables and adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which we become aware. For the year ended December 31, 2019, we decreased the balance by $23,000 due to collections of previously allowed for receivables. For the year ended December 31, 2018, we increased the balance by $152,000 due to concerns regarding collectability for a specific customer. For the year ended December 31, 2017, the allowance balance was not adjusted. We track customer balances and past due amounts to determine if customers may be having financial difficulties. This, along with historical experience and a working knowledge of each customer, helps determine accounts that should be written off. No amounts were written off in 2019 , 2018 or 2017 . Discontinued Operations – Assets that are sold or classified as held for sale are classified as discontinued operations provided that the disposal represents a strategic shift that has (or will have) a major effect on our operations and financial results (e.g., a disposal of a major geographical area, a major line of business, a major equity method investment or other major parts of an entity). Notes Receivable – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a non-interest note receivable is recorded with an imputed interest rate. There were no notes receivable outstanding as of December 31, 2019 or 2018. The unearned interest was reflected as a discount against the note balance. The Company evaluates the collectability of notes based upon a working knowledge of the customer. The notes are receivable from custom processing customers with whom we maintain a close relationship. Plant, Pipeline and Equipment – Plant, pipeline and equipment are stated at cost. Depreciation is provided over the estimated service lives using the straight-line method. Gains and losses from disposition are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. Major renewals and improvements are capitalized. Interest costs incurred to finance expenditures during construction phase are capitalized as part of the historical cost of constructing the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized interest costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Labor costs incurred to self-construct assets are capitalized as part of the historical cost the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized labor costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Platinum catalyst is included in plant, pipeline and equipment at cost. Amortization of the catalyst is based upon cost less estimated salvage value of the catalyst using the straight line method over the estimated useful life (see Note 8). Goodwill and Other Intangible Assets – Goodwill represents the future economic benefits arising from other assets acquired in the acquisition of TC that are not individually identified and separately recognized. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. Estimates of fair value are based on appraisals, market prices for comparable assets, or internal estimates of future net cash flows. Definite-lived intangible assets consist of customer relationships, licenses, permits and developed technology that were acquired as part of the acquisition of TC. The majority of these assets are being amortized using discounted estimated future cash flows over the term of the related agreements. Intangible assets associated with customer relationships are being amortized using the discounted estimated future cash flows method based upon assumed rates of annual customer attrition. We continually evaluate the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they will be removed from the consolidated balance sheets. Business Combinations and Related Business Acquisition Costs – Assets and liabilities associated with business acquisitions are recorded at fair value using the acquisition method of accounting. We allocate the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. We may use third-party valuation specialists to assist us in this allocation. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition. The fair value of property, plant and equipment and intangible assets are based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Business acquisition costs are expensed as incurred and are reported as general and administrative expenses in the consolidated statements of income. We define these costs to include finder's fees, advisory, legal, accounting, valuation, and other professional consulting fees, as well as, travel associated with the evaluation and effort to acquire specific businesses. Investment in AMAK – We account for our investment in AMAK using the equity method of accounting under which we record in income our share of AMAK's income or loss for each period. The amount recorded is also adjusted to reflect the amortization of certain differences between the basis in our investment in AMAK and our share of the net assets of AMAK as reflected in AMAK's financial statements (see Note 6). Any proceeds received from or payments made to AMAK are recorded as decreases or increases in the balance of our investment. We assess our investment in AMAK for impairment when events are identified, or there are changes in circumstances that may have an adverse effect on the fair value of the investment. In making our assessment we consider operating results, recoverable ore reserves, changes in mineral prices. Other Assets – Other assets include a license used in specialty petrochemicals operations, spare parts inventory, insurance receivables and certain specialty petrochemicals assets. Beginning January 1, 2017, due to the expansion of our plant assets at SHR and TC, we began inventorying spare parts for the repair and maintenance of our plant, pipeline and equipment. Spare parts are accounted for using FIFO. Long-Lived Assets Impairment – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on the undiscounted net cash flows to be generated from the asset's use. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis although other factors including the state of the economy are considered. Revenue Recognition – The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606 ("ASC 606"), Revenue from Contracts with Customers, and its amendments with a date of the initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. ASC 606 outlines a single comprehensive model for an entity to use in accounting for revenue arising from all contracts with customers, except where revenues are in scope of another accounting standard. ASC 606 superseded the revenue recognition requirements in ASC Topic 605, " Revenue Recognition", and most industry specific guidance. ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services. ASC 606 also requires certain additional revenue-related disclosures. The Company applied the modified retrospective approach under ASC 606 which allows for the cumulative effect of adopting the new guidance on the date of initial application. Use of the modified retrospective approach means the Company's comparative periods prior to initial application are not restated. The initial application was applied to all contracts at the date of the initial application. The Company has determined that the adjustments using the modified retrospective approach did not have a material impact on the date of the initial application along with the disclosure of the effect on prior periods. Accounting Policy Beginning on January 1, 2018, revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. In evaluating when a customer has control of the asset we primarily consider whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer has accepted delivery and a right to payment exists. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales and processing. The Company does not offer material rights of return or service-type warranties. For the year ended December 31, 2017 the Company recognized revenue according to FASB ASC Topic 605 ("ASC 605"), " Revenue Recognition" , when: (1) the customer accepted delivery of the product and title had been transferred or when the service was performed and the Company had no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction had occurred; (3) price was fixed and determinable; and (4) collection was assured. Product sales generally met these criteria, and revenue was recognized, when the product was delivered or title was transferred to the customer. Sales revenue was presented net of discounts, allowances, and sales taxes. Freight costs billed to customers were recorded as a component of revenue. Revenues received in advance of future sales of products or prior to the performance of services were presented as deferred revenues. Shipping and handling costs were classified as cost of product sales and processing and were expensed as incurred. Nature of goods and services The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, disaggregation of revenues, and contract balance disclosures, see Note 17. Specialty Petrochemicals segment The specialty petrochemicals segment of the Company produces eight high purity hydrocarbons and other petroleum based products including isopentane, normal pentane, isohexane and hexane. These products are used in the production of polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, crude oil from the Canadian tar sands, and in the catalyst support industry. SHR's specialty petrochemicals products are typically transported to customers by rail car, tank truck, iso-container and ship. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected 30 to 60 days subsequent to point of sale. Processing Fees – The Company's services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements the customer retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Specialty Waxes segment The specialty waxes segment of the Company manufactures and sells specialty polyethylene and poly alpha olefin waxes and also provides custom processing services for customers. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Processing Fees – The Company's promised services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements and Purchase Order Arrangements, the customer typically retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction and Purchase Order Arrangement is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Shipping and Handling Costs – Shipping and handling costs are classified as cost of product sales and processing and are expensed as incurred. Retirement Plan – We offer employees the benefit of participating in a 401(k) plan. We match 100% up to 6% of pay with vesting occurring over 2 years. For years ended December 31, 2019 , 2018 , and 2017 , matching contributions of approximately $1,321,000 , $1,502,000 , and $1,412,000 , respectively, were made on behalf of employees. Environmental Liabilities – Remediation costs are accrued based on estimates of known environmental remediation exposure. Ongoing environmental compliance costs, including maintenance and monitoring costs, are expensed as incurred. Other Liabilities – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a note receivable and a deferred liability are recorded to recover the project costs which are then capitalized. At times instead of a note receivable being established, the customer pays an upfront cost. The amortization of other liabilities is recorded as a reduction to depreciation expense over the life of the contract with the customer. As of December 31 of each year, depreciation expense was offset and reduced by approximately $0.8 million , $0.8 million , and $0.8 million , for 2019 , 2018 , and 2017 , respectively. Net Income Per Share – We compute basic income per common share based on the weighted-average number of common shares outstanding. Diluted income per common share is computed based on the weighted-average number of common shares outstanding plus the number of additional common shares that would have been outstanding if potential dilutive common shares, consisting of stock options, unvested restricted stock units, and shares which could be issued upon conversion of debt, had been issued (see Note 18). Foreign Currency – The functional currency for the Company and each of the Company's subsidiaries is the US dollar (USD). Transaction gains or losses as a result of transactions denominated and settled in currencies other than the USD are reflected in the statements of income as foreign exchange transaction gains or losses. We do not employ any practices to minimize foreign currency risks. The functional and reporting currency of AMAK is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the USD at a fixed exchange rate of 1 USD to 3.75 SR; therefore, we translate SR into our reporting currency of the USD for income statement and balance sheet purposes using the fixed exchange rate. As of December 31, 2019 , 2018 and 2017 , foreign currency translation adjustments were not significant. Management Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include allowance for doubtful accounts receivable and inventory obsolescence; assessment of impairment of our long-lived assets, goodwill, intangible assets and investments, litigation liabilities, post-retirement benefit obligations, guarantee obligations, environmental liabilities, income taxes and deferred tax valuation allowances. Actual results could differ from these estimates. Share-Based Compensation – We recognize share-based compensation of stock options granted based upon the fair value of options on the grant date using the Black-Scholes pricing model (see Note 15). Share-based compensation expense recognized during the period is based on the fair value of the portion of share-based payments awards that is ultimately expected to vest. Share-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2019 , 2018 , and 2017 includes compensation expense based on the estimated grant date fair value for awards that are ultimately expected to vest, and accordingly has been reduced for estimated forfeitures. Estimated forfeitures at the time of grant are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Guarantees – We may enter into agreements which contain features that meet the definition of a guarantee under FASB ASC 460 "Guarantees" (see Note 14). These arrangements create two types of obligations: a) We have a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and b) We have an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probable that one or more future events will occur, triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated. Fair Value – The carrying value of cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of variable rate long term debt and notes payable reflect recent market transactions and approximate carrying value. We used other observable inputs that would qualify as Level 2 inputs to make our assessment of the approximate fair value of our cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, other liabilities, notes payable and variable rate long term debt. The fair value of the derivative instruments are described below. We measure fair value by ASC Topic 820 Fair Value. ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard amends numerous accounting pronouncements but does not require any new fair value measurements of reported balances. ASC Topic 820 emphasizes that fair value, among other things, is based on exit price versus entry price, should include assumptions about risk such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. When considering the assumptions that market participants would use in pricing the asset or liability, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy prioritizes inputs used to measure fair value into three broad levels. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Derivatives – We record derivative instruments as either an asset or liability measured at fair value. Changes in the derivative instrument's fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument's gains and losses to offset related results on the hedged item in the income statement, to the extent effective, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized. Our estimate of the potential outcome of any uncertain tax issues is subject to management's assessment of relevant risks, facts, and circumstances existing at that time. We use a more likely than not threshold for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. To the extent that our assessment of such tax position changes, the change in estimate is recorded in the period in which the determination is made. We report tax-related interest and penalties as a component of income tax expense. On December 22, 2017, Public Law No. 115-97 known as the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA included a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. federal corporate income tax rate from a maximum of 35 percent to a flat 21 percent for tax years effective January 1, 2018. In addition the TJCA created prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. Reclassifications – Certain reclassifications have been made to prior year balances to conform with the current year presentation. Subsequent Events – The Company has evaluated subsequent events through March 13, 2020 , the date that the consolidated financial statements were approved by management. See Notes 6 and 16. Accounting Standards Adopted in 2019 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This update increased transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update was effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to ASC 842, Leases. ASU 2018-11 provided entities with an alternative modified transition method to elect not to recast the comparative periods presented when adopting ASC 842. The new standard provided a number of optional practical expedients in transition. The Company elected: (1) the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs and (2) the use-of-hindsight. In addition, the new standard provided practical expedients for an entity’s ongoing accounting that the Company made, such as the (1) the election for certain classes of underlying asset to not separate non-lease components from lease components and (2) the election for short-term lease recognition exemption for all leases that qualify. The Company adopted ASU 842 as of January 1, 2019, using the alternative modified transition method. 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 January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) . The amendment simplifies 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 amendment also eliminates 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 elected to early adopt this ASU on January 1, 2019. See Note 10 for a discussion of the results of our goodwill impairment testing. Recent Accounting Pronouncements 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 does not expect the adoption of this ASU to have a significant impact on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes . The amendments in this update simplify the accounting for income taxes by removing certain exceptions and clarifying certain requirements regarding franchise taxes, goodwill, consolidated tax expenses, and annual effective tax rate calculations. The ASU is effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The Company is currently assessing the impact of this ASU will have on its consolidated financial statements. |
CONCENTRATIONS OF REVENUES AND
CONCENTRATIONS OF REVENUES AND CREDIT RISK | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF REVENUES AND CREDIT RISK | CONCENTRATIONS OF REVENUES AND CREDIT RISK We sell our products and services to companies in the chemical, plastics, and petroleum industries. We perform periodic credit evaluations of our customers and generally do not require collateral from our customers. For the years ended December 31, 2019 , 2018 , and 2017 , one customer accounted for 15.0% , 13.5% , and 16.8% , respectively, of consolidated revenue. The associated accounts receivable balances for this customer, ExxonMobil and their affiliates, were approximately $4.9 million and $11.0 million at December 31, 2019 and 2018 , respectively. The carrying amount of accounts receivable approximates fair value at December 31, 2019 and 2018 . Accounts receivable serves as collateral for our amended and restated loan agreement with a domestic bank (see Note 13). We market our products in many foreign jurisdictions. For the years ended December 31, 2019 , 2018 , and 2017 , revenue in foreign jurisdictions accounted for approximately 21.9% , 25.5% , and 22.0% of consolidated revenue, respectively. SHR utilizes one major supplier to purchase all our feedstock supply. The feedstock is a commodity product commonly available from other suppliers if needed. At December 31, 2019 , and 2018 , we owed the supplier approximately $4.5 million and $4.7 million , respectively, for feedstock purchases. We hold our cash with various financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000 . At times during the year, cash balances may exceed this limit. We have not experienced any losses in such accounts and do not believe we are exposed to any significant risk of loss related to cash. |
TRADE RECEIVABLES
TRADE RECEIVABLES | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
TRADE RECEIVABLES | TRADE RECEIVABLES Trade receivables, net, at December 31, consisted of the following: 2019 2018 (thousands of dollars) Trade receivables $ 26,749 $ 27,564 Less allowance for doubtful accounts (429 ) (452 ) Trade receivables, net $ 26,320 $ 27,112 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories include the following at December 31: 2019 2018 (thousands of dollars) Raw material $ 2,100 $ 4,742 Work in process 142 173 Finished products 11,382 11,624 Total inventory $ 13,624 $ 16,539 Inventory serves as collateral for our amended and restated loan agreement with a domestic bank (see Note 13). Inventory included products in transit valued at approximately $2.9 million and $4.1 million at December 31, 2019 and 2018 , respectively. |
INVESTMENT IN AMAK AND DISCONTI
INVESTMENT IN AMAK AND DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN AMAK AND DISCONTINUED OPERATIONS | INVESTMENT IN AMAK AND DISCONTINUED OPERATIONS At December 31, 2019 and 2018 , the Company had a non-controlling equity interest of 33.3% and 33.4% in AMAK of approximately $32.9 million and $38.7 million , respectively. This investment is accounted for under the equity method. There are no events or changes in circumstances that may have an adverse effect on the fair value of our investment in AMAK at December 31, 2019 and 2018 . The Company committed to a plan to sell our investment in AMAK during the third quarter of 2019. Management engaged in an active program to market the investment which resulted in an agreement with certain AMAK stockholders in September 2019 . Pursuant to a Share Sale and Purchase Agreement (the "Purchase Agreement") that was effective as of October 2, 2019 , the Company has agreed to sell its entire 33.3% equity interest in AMAK, to AMAK and certain other existing stockholders of AMAK (collectively, the "Purchasers") for an aggregate gross purchase price (before taxes and transaction expenses) of SAR 264.7 million (or approximately US$70 million ), which will be payable in US Dollars. The Purchasers advanced 5% of the purchase price (or approximately $3.5 million ) in the form of a non-refundable deposit, which was a condition to the effectiveness of the Purchase Agreement. These advances were recorded as a reduction in our investment in AMAK. The Purchase Agreement contained various representations, warranties and indemnity obligations of the Company and the Purchasers, including the release of the Company's guarantee as described in Note 14. On January 16, 2020 , the Company and the Purchasers entered into a letter agreement (the “Amendment”) providing certain amendments to the Purchase Agreement. Pursuant to the Amendment, the Long Stop Date (as defined in the Purchase Agreement) for completion of the Share Sale has been extended to March 31, 2020 to allow additional time for the parties to obtain certain required governmental approvals. Under the Purchase Agreement, the Company has certain termination rights if closing of the Share Sale does not occur on or before the Long Stop Date. The Amendment also provides that, if closing of the Share Sale does not occur on or before the extended Long Stop Date, and the Company determines in its sole discretion to further extend such date, then an amount equal to 50% of the approximately $3.5 million non-refundable deposit made by the Purchasers under the Purchase Agreement will be forfeited to the Company as liquidated damages and shall not be applied to the purchase price at closing of the Share Sale. As all the required criteria for held-for-sale classification was met in third quarter of 2019, the investment in AMAK is classified as held-for-sale in the Consolidated Balance Sheets and reflected as discontinued operations in the Consolidated Statements of Operations for all periods presented. The assets held-for-sale are disclosed by the Company in the Corporate segment. The Company expects to have no continuing involvement with the discontinued operations after the closing date. The gain (loss) from discontinued operations, net of tax, include our portion of the equity in earnings (losses) in AMAK as well as other administrative expenses incurred in Saudi Arabia and transaction costs. Included in discontinued operations are the following for the years ending December 31: 2019 2018 2017 Saudi administration (income) expenses $ 187 $ (136 ) $ 173 Equity in losses of AMAK 986 901 4,261 Other professional expenses 1,473 — — Loss from discontinued operations before taxes 2,646 765 4,434 Tax benefit (556 ) (161 ) (931 ) Loss from discontinued operations (net of tax) $ 2,090 $ 604 $ 3,503 Ordinary and customary closing expenses related to the disposition of AMAK will be incurred and expensed at closing. We have received and attached to this Form 10-K the financial statements of AMAK prepared in accordance with generally accepted accounting principles in the United States of America as of December 31, 2019 and 2018 , and for each of the three years ended December 31, 2019 . These financial statements have been 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 Years Ended December 31, 2019 2018 2017 (Thousands of Dollars) Sales $ 78,350 $ 70,234 $ 36,435 Cost of sales (69,620 ) (68,084 ) (43,304 ) Gross profit (loss) 8,730 2,150 (6,869 ) Selling, general and administrative 13,047 7,860 7,547 Operating loss (4,317 ) (5,710 ) (14,416 ) Other income 558 86 238 Finance and interest expense (1,450 ) (1,592 ) (1,628 ) Loss before Zakat and income taxes (5,209 ) (7,216 ) (15,806 ) Zakat and income taxes (1,801 ) 487 (966 ) Net loss $ (7,010 ) $ (6,729 ) $ (16,772 ) Financial Position December 31, 2019 2018 (Thousands of Dollars) Current assets $ 45,354 $ 44,093 Noncurrent assets 196,564 212,291 Total assets $ 241,918 $ 256,384 Current liabilities $ 27,645 $ 17,160 Long term liabilities 79,348 77,366 Shareholders' equity 134,925 161,858 Total liabilities and equity $ 241,918 $ 256,384 The equity in the income or loss of AMAK reflected in discontinued operations for the years ended December 31, 2019 , 2018 , and 2017 , is comprised of the following: 2019 2018 2017 AMAK Net Loss $ (7,010 ) $ (6,729 ) $ (16,772 ) Company's share of loss reported by AMAK $ (2,333 ) $ (2,248 ) $ (5,608 ) Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK 1,347 1,347 1,347 Equity in loss of AMAK $ (986 ) $ (901 ) $ (4,261 ) A gain of approximately $16.2 million for the difference between our initial investment in AMAK and our share of AMAK's initial assets recorded at fair value was not recognized in 2008. This basis difference is being amortized over the life of AMAK's mine which is estimated to be twelve years beginning with its commencement of production in July 2012 as an adjustment to our equity in AMAK's income or loss. Changes in Ownership and Other Transactions • In the first quarter of 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% . • In connection with the 2018 AMAK share repurchase program, we received gross proceeds of approximately $1.3 million in the first quarter of 2019 . Upon completion of the share repurchase program the Company's ownership percentage in AMAK did not change from 33.44% . • In the second quarter of 2019 , certain stockholders 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% . • At December 31, 2019 and 2018 , the Company had a receivable from AMAK of approximately $30,000 and $30,000 , respectively, relating to unreimbursed travel and Board expenses which is included in prepaid and other assets. |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets at December 31 are summarized as follows: 2019 2018 (thousands of dollars) Prepaid license $ 1,209 $ 2,419 Spare parts 1,857 1,597 Insurance receivable 1,148 — Other prepaid expenses and assets 733 648 Total $ 4,947 $ 4,664 |
PLANT, PIPELINE AND EQUIPMENT
PLANT, PIPELINE AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PLANT, PIPELINE AND EQUIPMENT | PLANT, PIPELINE AND EQUIPMENT Plant, pipeline and equipment include the following at December 31: 2019 2018 (thousands of dollars) Platinum catalyst $ 1,580 $ 1,612 Catalyst 4,095 3,131 Land 5,428 5,428 Plant, pipeline and equipment 258,651 253,905 Construction in progress 5,052 4,343 Total plant, pipeline and equipment 274,806 268,419 Less accumulated depreciation (85,887 ) (73,762 ) Net plant, pipeline and equipment $ 188,919 $ 194,657 Plant, pipeline and equipment serve as collateral for our amended and restated loan agreement with a domestic bank (see Note 13). Interest capitalized for construction for 2019 , 2018 and 2017 was approximately nil , $0.7 million and $0.9 million , respectively. Labor capitalized for construction for 2019 , 2018 and 2017 was approximately nil , $2.3 million and $4.3 million , respectively. Catalyst amortization relating to the platinum catalyst which is included in cost of sales was approximately $1.3 million , $0.1 million and nil for 2019 , 2018 and 2017 , respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases certain rail cars, rail equipment, office space and office equipment. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term. The components of lease expense were as follows: ($ in thousands) Classification in the Consolidated Statements of Operations December 31, 2019 December 31, 2018 December 31, 2017 Operating lease cost (a) Cost of sales, exclusive of depreciation and amortization $ 4,361 $ — $ — Operating lease cost (a) Selling, general and administrative 137 — — Total operating lease cost $ 4,498 $ — $ — Finance lease cost: Amortization of right-of-use assets Depreciation — — — Interest on lease liabilities Interest Expense — — — Total finance lease cost $ — $ — $ — Total lease cost $ 4,498 $ — $ — (a) Short-term lease costs were approximately $64,000, nil and nil as of December 31, 2019, 2018 and 2017, respectively. The Company had no variable lease expense, as defined by ASC 842, during the period. ($ in thousands) Classification on the Consolidated Balance Sheets December 31, 2019 Assets: Operating Operating lease assets $ 13,512 Finance Property, plant, and equipment — Total leased assets $ 13,512 Liabilities: Current Operating Current portion of operating lease liabilities $ 3,174 Finance Short-term debt and current portion of long-term debt — Noncurrent Operating Operating lease liabilities 10,338 Finance Long-term debt — Total lease liabilities $ 13,512 ($ in thousands) December 31, 2019 December 31, 2018 December 31, 2017 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 4,389 $ — $ — Operating cash flows used for finance leases — — — Financing cash flows used for finance leases — — — Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 81 $ — $ — Finance leases — — — December 31, 2019 Weighted-average remaining lease term (in years): Operating leases 4.5 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 December 31, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 3,703 $ — 2021 3,540 — 2022 3,218 — 2023 2,329 — 2024 1,026 — Thereafter 1,082 — Total lease payments $ 14,898 $ — Less: Interest 1,386 — Total lease obligations $ 13,512 $ — 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 2. 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 Consolidated Statements of Operations December 31, 2019 December 31, 2018 December 31, 2017 Operating lease cost (a) Cost of sales, exclusive of depreciation and amortization $ 4,361 $ — $ — Operating lease cost (a) Selling, general and administrative 137 — — Total operating lease cost $ 4,498 $ — $ — Finance lease cost: Amortization of right-of-use assets Depreciation — — — Interest on lease liabilities Interest Expense — — — Total finance lease cost $ — $ — $ — Total lease cost $ 4,498 $ — $ — (a) Short-term lease costs were approximately $64,000, nil and nil as of December 31, 2019, 2018 and 2017, respectively. The Company had no variable lease expense, as defined by ASC 842, during the period. ($ in thousands) Classification on the Consolidated Balance Sheets December 31, 2019 Assets: Operating Operating lease assets $ 13,512 Finance Property, plant, and equipment — Total leased assets $ 13,512 Liabilities: Current Operating Current portion of operating lease liabilities $ 3,174 Finance Short-term debt and current portion of long-term debt — Noncurrent Operating Operating lease liabilities 10,338 Finance Long-term debt — Total lease liabilities $ 13,512 ($ in thousands) December 31, 2019 December 31, 2018 December 31, 2017 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 4,389 $ — $ — Operating cash flows used for finance leases — — — Financing cash flows used for finance leases — — — Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 81 $ — $ — Finance leases — — — December 31, 2019 Weighted-average remaining lease term (in years): Operating leases 4.5 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 December 31, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 3,703 $ — 2021 3,540 — 2022 3,218 — 2023 2,329 — 2024 1,026 — Thereafter 1,082 — Total lease payments $ 14,898 $ — Less: Interest 1,386 — Total lease obligations $ 13,512 $ — 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 2. 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 |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill As discussed further in Note 2 to the Consolidated Financial Statements, during 2019 we adopted new accounting guidance and removed the second step of the goodwill impairment test. Under step two, an entity was required to determine the fair value of individual assets and liabilities of a reporting unit (including unrecognized assets and liabilities) using the procedure for determining fair values in a business combination. As a result, goodwill impairment is now measured at the amount by which a reporting unit’s carrying amount exceeds its fair value, with any impairment charge limited to the carrying amount of goodwill. Goodwill was nil and $21.8 million at December 31, 2019 and December 31, 2018 , respectively. Goodwill for these periods reflects accumulated impairment losses of $21.8 million and nil , respectively. We evaluated our goodwill for impairment during the fourth quarter of 2019 in connection with our annual review. As part of our review, in the fourth quarter we assessed 2019 operating performance and its impact on the operating cash flows of our Specialty Wax reporting unit. We completed our annual impairment test of goodwill in accordance with ASC 350-20 Goodwill . We concluded based on this analysis that the estimates of fair value of our Specialty Wax reporting unit was lower than its book value, including goodwill. As a result, we recorded a non-cash impairment charge of $21.8 million in the fourth quarter of 2019, representing all of the the goodwill previously allocated to this reporting unit. Intangible Assets The following table summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands): December 31, 2019 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (5,898 ) $ 10,954 Non-compete agreements 94 (94 ) — Licenses and permits 1,471 (601 ) 870 Developed technology 6,131 (3,219 ) 2,912 24,548 (9,812 ) 14,736 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance — — — Trade name — — — Total $ 24,548 $ (9,812 ) $ 14,736 December 31, 2018 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net 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 In connection with the impairment analysis discussed above, we determined the indefinite-lived intangible assets were also impaired as of December 31, 2019 . We recorded a non-cash impairment charge of $2.4 million in the fourth quarter of 2019. Amortization expense for intangible assets included in cost of sales for the years ended December 31, 2019 , 2018 , and 2017 , was approximately $1,856,000 , $1,861,000 , and $1,861,000 respectively. Based on identified intangible assets that are subject to amortization as of December 31, 2019 , we expect future amortization expenses for each period to be as follows (in thousands): Total 2020 2021 2022 2023 2024 Thereafter Customer relationships $ 10,954 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 5,339 Licenses and permits 870 106 101 86 86 86 405 Developed technology 2,912 613 613 613 613 460 — Total future amortization expense $ 14,736 $ 1,842 $ 1,837 $ 1,822 $ 1,822 $ 1,669 $ 5,744 |
MINERAL PROPERTIES IN THE UNITE
MINERAL PROPERTIES IN THE UNITED STATES | 12 Months Ended |
Dec. 31, 2019 | |
Mineral Industries Disclosures [Abstract] | |
MINERAL PROPERTIES IN THE UNITED STATES | MINERAL PROPERTIES IN THE UNITED STATES The principal assets of PEVM are an undivided interest in 48 patented and 5 unpatented mining claims totaling approximately 1,500 acres in southeast Nevada. The properties held by PEVM have not been commercially operated for approximately 35 years. In November 2019, PEVM entered into a sales contract which, upon completion of due diligence, may lead to liquidation of substantially all of its remaining assets. Upon closing of the sale, PEVM will be dissolved. Any proceeds from the sale will primarily be used to repay outstanding indebtedness of PEVM owed to the Company. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Liabilities [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities at December 31 are summarized as follows: 2019 2018 (thousands of dollars) Accrued state taxes $ 215 $ 210 Accrued payroll 1,250 936 Accrued interest 33 31 Accrued officer compensation 1,687 — Accrued restructuring & severance expenses (Note 21) 16 1,221 Accrued foreign taxes — 802 Accrued professional expenses (Note 6) 1,000 — Other liabilities 1,539 2,239 Total $ 5,740 $ 5,439 |
LONG-TERM DEBT AND LONG-TERM OB
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS | LONG-TERM DEBT AND LONG-TERM OBLIGATIONS ARC Agreement In October 2014, TOCCO, SHR, GSPL and TC (SHR, GSPL and TC collectively the “Guarantors”) entered into an amended and restated credit agreement (as amended to the date hereof, the “ARC Agreement”), which originally provided (i) a revolving credit facility (the “Revolving Facility”) with revolving commitments of $40.0 million and (ii) term loan borrowings consisting of (A) a $70.0 million single advance term loan incurred to partially finance the acquisition of TC (which we refer to as the “Acquisition loan”) and (B) a $25.0 multiple advance term loan facility for which borrowing availability ended on December 31, 2015 (collectively, the “Term Loan Facility” and, together with the Revolving Facility, the “Credit Facilities”). On July 31, 2018, TOCCO and the Guarantors entered into a Fourth Amendment to the ARC Agreement (the “Fourth Amendment”) pursuant to which the revolving commitments under the Revolving Facility were increased to $75.0 million . Pursuant to the Fourth Amendment, total borrowings under the Term Loan Facility were increased to $87.5 million under a single combined term loan, which comprised new term loan borrowings together with approximately $60.4 million of previously outstanding term loans under the Term Loan Facility. The $60.4 million of previously outstanding term loans included the remaining outstanding balances on the Acquisition loan and the multiple advance term loan facility described above. Proceeds of the new borrowings under the Term Loan Facility were used to repay a portion of the outstanding borrowings under the Revolving Facility and pay fees and expenses of the transaction. As of December 31, 2019, we had $3 million in borrowings outstanding under the Revolving Facility and $80.9 million in borrowings outstanding under the Term Loan Facility. In addition, we had approximately $50 million of available borrowings under our Revolving Facility at December 31, 2019. However, TOCCO’s ability to make additional borrowings under the Revolving Credit Facility at December 31, 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)). The maturity date for the ARC Agreement is July 31, 2023. Subject to the lenders acceptance of any increased commitment and other conditions, we have the option, at any time, to request an increase to the commitment under the Revolving Facility and/or the Term Loan Facility by an additional amount of up to $50.0 million in the aggregate. Borrowings under each of the Credit Facilities bear interest on the outstanding principal amount at a rate equal to LIBOR plus an applicable margin of 1.25% to 2.50% or, at our option, the Base Rate plus an applicable margin of 0.25% to 1.50% , in each case, with the applicable margin being determined based on the Consolidated Leverage Ratio of TOCCO. A commitment fee between 0.20% and 0.375% is also payable quarterly on the unused portion of the Revolving Facility. For 2019, the effective interest rate for the Credit Facilities was 4.56% . Borrowings under the Term Loan Facility are subject to quarterly amortization payments based on a commercial style amortization method over a twenty year period; provided, that the final principal installment will be paid on the maturity date and will be in an amount equal to the outstanding borrowings under the Term Loan Facility on such date. 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). TOCCO's Consolidated Leverage Ratio was 2.20 and 4.03 as of December 31, 2019 and 2018 , respectively. Additionally, TOCCO must maintain a minimum Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter of 1.15 to 1.00 . TOCCO's Consolidated Fixed Charge Coverage Ratio was 2.56 and 1.29 as of December 31, 2019 and 2018 , respectively. The ARC Agreement contains, among other things, other customary covenants, including restrictions on the incurrence of additional indebtedness, the granting of additional liens, the making of investments, the disposition of assets and other fundamental changes, transactions with affiliates and the declaration of dividends and other restricted payments. The ARC Agreement further includes customary representations and warranties and events of default, and upon occurrence of such events of default the outstanding obligations under the ARC Agreement may be accelerated and become immediately due and payable and the commitment of the lenders to make loans under the ARC Agreement may be terminated. We were in compliance with all covenants at December 31, 2019. Principal payments of long-term debt for the next five years and thereafter ending December 31 are as follows: Year Ending December 31, Debt (thousands of dollars) 2020 $ 4,375 2021 4,375 2022 4,375 2023 70,813 Total $ 83,938 Debt Issuance Costs Debt issuance costs of approximately $0.9 million were incurred in connection with the Fourth Amendment and the remaining debt issuance costs of $0.3 million from the previous agreements were expensed and are shown as a loss on the extinguishment of debt on the consolidated statements of operations for the year ended December 31, 2018. Unamortized debt issuance costs of approximately $0.6 million and $0.8 million for the years ended December 31, 2019 and December 31, 2018, have been netted against outstanding loan balances. Long-term debt and long-term obligations at December 31 are summarized as follows: 2019 2018 (thousands of dollars) Revolving facility $ 3,000 $ 18,000 Term loan facility 80,938 85,312 Loan fees (649 ) (830 ) Total long-term debt 83,289 102,482 Less current portion including loan fees 4,194 4,194 Total long-term debt, less current portion including loan fees $ 79,095 $ 98,288 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 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, the Company's 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 Loan was amended to adjust the repayment schedule and extend the repayment terms through April 2024. The total amount outstanding on the Loan at December 31, 2019 was 275.0 million Saudi Riyals (US $73.3 million ). See additional discussion including the release of the guarantee in connection with the AMAK sale in Note 6. Operating Lease Commitments See Note 9 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 In accordance with our supplier agreements, on a recurring monthly basis, the Company commits to purchasing a determined volume of feedstock in anticipation of upcoming requirements. Feedstock purchases are invoiced and recorded when they are delivered. As of December 31, 2019 and 2018 , the value of the remaining undelivered feedstock approximated $3.5 million and $3.9 million , respectively. From time to time, we may incur shortfall fees due to feedstock purchases being below the minimum amounts as prescribed by our agreements with our suppliers. The shortfall fee expenses were not significant for the years ended December 31, 2019 , 2018 , and 2017 . Environmental Remediation Amounts charged to expense for various activities related to environmental monitoring, compliance, and improvements were approximately $868,000 in 2019 , $745,000 in 2018 and $593,000 in 2017 . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-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 shareholders 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 shareholders in June 2012. The Plan allows for the issuance of up to 2,500,000 shares in the form of stock options or restricted stock unit awards. Share-based compensation of approximately $ 1.3 million, $1.8 million, and $2.7 million was recognized in 2019 , 2018 , and 2017 , respectively. The Company reclassified approximately $0.3 million and $0.3 million for 2019 and 2018 , respectively, from share-based compensation expense in connection with the restructuring described in Note 21. 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 2019 , 2018 , or 2017 . 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 — — Expired — — Exercised (85,000 ) 7.71 Forfeited (173,830 ) 10.10 Outstanding at December 31, 2019 487,000 $ 10.87 3.8 $ — Expected to vest — $ — 0.0 $ — Exercisable at December 31, 2019 487,000 $ 10.87 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 December 31, 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 years 2019 , 2018 , and 2017 was nil . During 2019 , 2018 , and 2017 the aggregate intrinsic value of options and warrants exercised was approximately $141,000 , $2,630,000 and $164,000 respectively, determined as of the date of option exercise. The Company received approximately nil , $912,000 and $25,000 in cash from the exercise of options during 2019 , 2018 and 2017 , respectively. Of the 85,000 stock options and warrants exercised, the Company only issued approximately 11,000 shares due to cashless transactions. The tax benefit realized from the exercise was insignificant. As of December 31, 2019 , there was no unrecognized compensation costs related to non-vested share-based compensation. Post-retirement compensation of approximately $680,000 during the year ended December 31, 2018 was reversed related to options awarded to a former CEO and board member in July 2009. On May 9, 2010, the Board of Directors determined that he had forfeited these options and other retirement benefits when he made various demands against the Company and other AMAK shareholders which would benefit him personally and were not in the best interests of the Company and its shareholders. The Company was successful in litigating its right to withdraw the options and benefits and as such, these options and benefits were reversed during the second quarter of 2018. Restricted Stock and Restricted Stock Unit Awards Generally, restricted stock and 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 197,638 9.24 Forfeited (123,434 ) 10.82 Vested (181,015 ) 11.02 Outstanding at December 31, 2019 298,864 $ 9.78 Expected to vest 298,864 As of December 31, 2019 , there was approximately $1.5 million of unrecognized compensation costs related to non-vested restricted share-based compensation that is expected to be recognized over a weighted average period of 1.8 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes from continuing operations consisted of the following: Year ended December 31, 2019 2018 2017 (thousands of dollars) Current federal benefit $ — $ (74 ) $ (1,202 ) Current state expense 91 31 282 Deferred federal benefit (3,564 ) (813 ) (5,389 ) Deferred state expense (benefit) (93 ) 210 81 Income tax benefit $ (3,566 ) $ (646 ) $ (6,228 ) The difference between the effective tax rate in income tax expense and the Federal statutory rate of 21% for the years ended December 31, 2019 and 2018, and 35% for the year ended December 31, 2017 , is as follows: 2019 2018 2017 (thousands of dollars) Income taxes at U.S. statutory rate $ (3,455 ) $ (661 ) $ 4,816 State taxes, net of federal benefit 256 234 235 Net operating loss carryback — — (961 ) Research and development credits (203 ) (263 ) — Permanent and other items (164 ) 44 (11 ) Deferred tax impact of US tax reform — — (10,307 ) Total tax benefit $ (3,566 ) $ (646 ) $ (6,228 ) Permanent differences are primarily due to the Federal manufacturer's deduction, in applicable year 2017, research and development credit, and stock-based compensation. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 ("TCJA") was signed into law making significant changes to the Internal Revenue Code. The changes as a result of the TCJA, which had the most significant impact on the Company's federal income taxes are as follows: Reduction of the U.S. Corporate Income Tax Rate - The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the TCJA, the Company revalued its ending net deferred tax liabilities at December 31, 2017 . Acceleration of Depreciation - The Company recognized a provisional reduction to net deferred tax assets attributable to the accelerated depreciation for certain assets placed into service after September 27, 2017. The provisional estimate was finalized including consideration of TCJA on long term construction projects. The Company elected to recognize the income tax effects of the TCJA in its financial statements in accordance with Staff Accounting Bulletin 118 (SAB 118), which provides guidance for the application of ASC Topic 740 Income Taxes, in the reporting period in which the TCJA was signed into law. During the fourth quarter of 2018, we completed our accounting for the Tax Act based on the current regulatory guidance available at the end of the SAB 118 measurement period and recorded no material net adjustments to our provisional estimate. Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2019 2018 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (29,227 ) $ (25,169 ) Intangible assets — (1,075 ) Other assets (32 ) (40 ) Operating lease asset (2,838 ) — Investment in AMAK (302 ) (671 ) Total deferred tax liabilities $ (32,399 ) $ (26,955 ) Deferred tax assets: Net operating loss carryforward 11,685 9,073 Intangible assets 3,699 — Operating lease liability 2,838 — Stock-based compensation 1,093 954 Foreign tax credit 891 802 Accounts receivable 240 238 Mineral interests 226 226 Interest expense carryforward 211 — General business credit 140 — Inventory 111 133 Post-retirement benefits 71 79 Charitable contributions 45 — Gross deferred tax assets 21,250 11,505 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 21,024 $ 11,279 Net deferred tax liabilities $ (11,375 ) $ (15,676 ) In connection with the proceeds received from AMAK in connection with its share repurchase program (See Note 6), the Company accrued a deferred tax asset (foreign tax credit) and the corresponding liability for the Saudi Arabian tax which was settled during 2019. We provided a valuation allowance in 2019 and 2018 against certain deferred tax assets because of uncertainties regarding their realization. As of December 31, 2019 and 2018, we have federal income tax net operating losses ("NOLs") carryforwards of $56.6 million and $43.2 million , respectively. The NOLs were created after the enactment of TCJA and therefore do not expire but may offset only 80% of taxable income in an annual period. 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 February 2020 on the selection of our December 31, 2017 tax return for audit. In prior years, we received notification that Texas selected our R&D credit calculations for 2014 and 2015 for audit. The state of Texas had suspended their examination while they comprehensively reviewed their audit procedures for consistency. During the fourth quarter of 2019, we received notice that Texas had completed their review of their procedures and initiated additional requests for information. We do not expect any changes related to the Federal or Texas audits. Our federal and Texas tax returns remain open for examination for the years 2016 through 2019. We recognized no adjustment for uncertain tax positions. As of December 31, 2019 , and 2018 , no interest or penalties related to uncertain tax positions had been accrued. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We operate in two business segments; specialty petrochemicals and specialty waxes. 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. The accounting policies of the reporting segments are the same as those described in Note 2. Our specialty petrochemicals segment includes SHR and GSPL. Our specialty waxes segment includes 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. Year Ended December 31, 2019 Specialty Petrochemicals Specialty Waxes Corporate Consolidated (in thousands) Net revenues $ 224,311 $ 34,648 $ — $ 258,959 Operating income (loss) before depreciation and amortization 38,860 (24,333 ) (9,190 ) 5,337 Operating income (loss) 28,304 (29,925 ) (9,242 ) (10,863 ) Income (loss) from continuing operations before taxes 23,993 (31,164 ) (9,279 ) (16,450 ) Depreciation and amortization 10,556 5,593 52 16,201 Capital expenditures 6,955 3,124 — 10,079 Year Ended December 31, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 14,736 $ — $ — $ 14,736 Total assets 289,546 88,245 90,203 (166,175 ) 301,819 Year Ended December 31, 2018 Specialty Petrochemicals Specialty Waxes Corporate Consolidated (in thousands) Net revenues $ 249,679 $ 38,253 $ — $ 287,932 Operating profit (loss) before depreciation and amortization 23,021 1,949 (8,275 ) 16,695 Operating profit (loss) 14,089 (3,427 ) (8,463 ) 2,199 Profit (loss) from continuing operations before taxes 10,705 (4,660 ) (8,419 ) (2,374 ) Depreciation and amortization 8,932 5,376 50 14,358 Capital expenditures 22,431 2,854 — 25,285 Year Ended December 31, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 40,745 $ — $ — $ 40,745 Total assets 284,367 115,366 91,474 (161,239 ) 329,968 |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER COMMON SHARE | NET INCOME (LOSS) PER COMMON SHARE Net Income per Common Share - Continuing Operations Year ended December 31, 2019 2018 2017 (thousands of dollars) Net income (loss) from continuing operations $ (12,884 ) $ (1,728 ) $ 21,512 Basic income (loss) from continuing operations per common share: Weighted average shares outstanding 24,698 24,438 24,294 Per share amount (dollars) $ (0.52 ) $ (0.07 ) $ 0.89 Diluted income (loss) from continuing operations per common share: Weighted average shares outstanding 24,698 24,438 25,129 Per share amount (dollars) $ (0.52 ) $ (0.07 ) $ 0.86 Weighted average shares-denominator basic computation 24,698 24,438 24,294 Unvested restricted stock unit grant — — 367 Effect of dilutive stock options — — 468 Weighted average shares, as adjusted denominator diluted computation 24,698 24,438 25,129 Net Income per Common Share - Discontinued Operations Year ended December 31, 2019 2018 2017 (thousands of dollars) Net loss from discontinued operations $ (2,090 ) $ (604 ) $ (3,503 ) Basic income (loss) from discontinued operations per common share: Weighted average shares outstanding 24,698 24,438 24,294 Per share amount (dollars) $ (0.08 ) $ (0.02 ) $ (0.14 ) Diluted income (loss) from discontinued operations per common share: Weighted average shares outstanding 24,698 24,438 25,129 Per share amount (dollars) $ (0.08 ) $ (0.02 ) $ (0.14 ) Weighted average shares-denominator basic computation 24,698 24,438 24,294 Unvested restricted stock unit grant — — 367 Effect of dilutive stock options — — 468 Weighted average shares, as adjusted denominator diluted computation 24,698 24,438 25,129 Net Income per Common Share Year ended December 31, 2019 2018 2017 (thousands of dollars) Net income (loss) $ (14,974 ) $ (2,332 ) $ 18,009 Basic earnings (loss) per common share: Weighted average shares outstanding 24,698 24,438 24,294 Per share amount (dollars) $ (0.61 ) $ (0.10 ) $ 0.74 Diluted earnings (loss) per common share: Weighted average shares outstanding 24,698 24,438 25,129 Per share amount (dollars) $ (0.61 ) $ (0.10 ) $ 0.72 Weighted average shares-denominator basic computation 24,698 24,438 24,294 Unvested restricted stock unit grant — — 367 Effect of dilutive stock options — — 468 Weighted average shares, as adjusted denominator diluted computation 24,698 24,438 25,129 At December 31, 2019 , 2018 , and 2017 , 487,000 , 745,830 and 1,323,587 potential common stock shares, respectively, were issuable upon the exercise of options and warrants. At December 31, 2019, the Company had 120,000 stock options that were not included in the computation of diluted earnings per share because the effect of conversion would be anti-dilutive due to the Company incurring net loss for operations for the year ended December 31, 2019. In 2018, we completed an exchange of shares with certain shareholders whereby such shareholders 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. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The quarterly results of operations shown below are derived from unaudited financial statements for the eight quarters ended December 31, 2019 (in thousands, except per share data, rounding may apply): Year Ended December 31, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 65,155 $ 69,371 $ 62,715 $ 61,718 $ 258,959 Gross profit 10,073 10,565 9,567 8,310 38,515 Net income (loss) from continuing operations $ 1,797 $ 2,476 $ 1,583 $ (18,740 ) $ (12,884 ) Net income (loss) from discontinued operations, net of tax (46 ) (72 ) (1,002 ) (970 ) (2,090 ) Net income (loss) 1,751 2,404 581 (19,710 ) (14,974 ) Basic EPS (1) from continuing operations $ 0.07 $ 0.10 $ 0.06 $ (0.76 ) $ (0.52 ) Basic EPS (1) from discontinued operations — — (0.04 ) (0.04 ) (0.08 ) Basic EPS (1) 0.07 0.10 0.02 (0.80 ) (0.61 ) Diluted EPS (1) from continuing operations $ 0.07 $ 0.10 $ 0.06 $ (0.76 ) $ (0.52 ) Diluted EPS (1) from discontinued operations — — (0.04 ) (0.04 ) (0.08 ) Diluted EPS (1) 0.07 0.10 0.02 (0.80 ) (0.61 ) Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 71,741 $ 68,106 $ 73,416 $ 74,669 $ 287,932 Gross profit 10,140 8,142 6,842 2,694 27,818 Net income (loss) from continuing operations $ 2,185 $ 2,035 $ (716 ) $ (5,232 ) $ (1,728 ) Net income (loss) from discontinued operations, net of tax 167 180 (893 ) (58 ) (604 ) Net income (loss) 2,352 2,215 (1,609 ) (5,290 ) (2,332 ) Basic EPS (1) from continuing operations $ 0.09 $ 0.08 $ (0.03 ) $ (0.21 ) $ (0.07 ) Basic EPS (1) from discontinued operations 0.01 0.01 (0.04 ) — (0.02 ) Basic EPS (1) 0.10 0.09 (0.07 ) (0.22 ) (0.10 ) Diluted EPS (1) from continuing operations $ 0.09 $ 0.08 $ (0.03 ) $ (0.21 ) $ (0.07 ) Diluted EPS (1) from discontinued operations 0.01 0.01 (0.04 ) — (0.02 ) Diluted EPS (1) 0.09 0.09 (0.06 ) (0.22 ) (0.10 ) (1) Basic and diluted earnings per share are computed independently for each of the quarters presented based on the weighted average number of common shares outstanding during that period. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Consulting fees of approximately $53,000 , $28,000 and $27,000 were incurred during 2019 , 2018 , and 2017 , respectively, from IHS Global FZ LLC of which Company Director Gary K. Adams held the position of Chief Advisor – Chemicals until April 1, 2017. At December 31, 2019 , and 2018 , we had no outstanding liability payable to IHS Global FZ LLC. Consulting fees of approximately $123,000 , $94,000 and $74,000 were incurred during 2019 , 2018 , and 2017 , respectively, from Nicholas Carter, Director and former CEO. Due to his history and experience with the Company and to provide continuity after his retirement, a consulting agreement was entered into with Mr. Carter in July 2015, which terminated effective December 31, 2019. At December 31, 2019 , and 2018 , we had no outstanding liability payable to Mr. Carter. |
RESTRUCTURING AND SEVERANCE EXP
RESTRUCTURING AND SEVERANCE EXPENSES | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND SEVERANCE EXPENSES | RESTRUCTURING AND SEVERENCE EXPENSES During 2018, the Company incurred restructuring and severance expenses of approximately $2.3 million related to changes in executive management and the completion of significant capital projects in our specialty petrochemicals segment. These expenses related to severance, stock compensation for continued vesting of time-vested shares issued under the Company's long-term incentive plans, and certain employee benefits including medical insurance and vacation. As of December 31, 2019, approximately $0.02 million remained unpaid and is included in accrued liabilities. As of December 31, 2018, approximately $1.2 million remained unpaid and was included in accrued liabilities. |
POST-RETIREMENT OBLIGATIONS
POST-RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
POST-RETIREMENT OBLIGATIONS | POST-RETIREMENT OBLIGATIONS In July 2015 and June 2018, we entered into retirement agreements with our former CEO, Nicholas Carter, and our former VP of Accounting & Compliance, Connie Cook. Mr. Carter's agreement provides continued welfare benefits for him and his wife for life at the same cost sharing basis as regular employees. Ms. Cook's agreement provides continued welfare benefits for her and her husband until eligible for Medicare. Approximately $339,000 and $377,000 was outstanding at December 31, 2019 , and 2018 , respectively, and included in post-retirement benefits. For the period ended December 31, 2019 , and 2018 , approximately $21,000 and $18,000 , respectively, had been paid. |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | TRECORA RESOURCES AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Three years ended December 31, 2019 Description Beginning balance Charged (credited) to earnings Deductions Ending balance ALLOWANCE FOR DEFERRED TAX ASSET December 31, 2017 376,037 (150,415 ) — 225,622 December 31, 2018 225,622 — — 225,622 December 31, 2019 225,622 — — 225,622 Description Beginning balance Charged to earnings Deductions Ending balance ALLOWANCE FOR DOUBTFUL ACCOUNTS December 31, 2017 300,000 — — 300,000 December 31, 2018 300,000 152,000 — 452,000 December 31, 2019 452,000 (23,000 ) — 429,000 |
AMAK FINANCIAL STATEMENTS
AMAK FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
FINANCIAL STATEMENTS | AL MASANE AL KOBRA MINING COMPANY Balance Sheets December 31, 2019 2018 (Expressed in Saudi Riyals) ASSETS Current assets: Cash and cash equivalents 52,244,794 31,510,496 Accounts receivable 29,643,472 16,235,035 Inventories 35,277,340 45,871,120 Advances to shareholders (Note 1) 2,859,341 52,562,028 Advances to contractors and other 50,053,018 19,168,765 Total current assets 170,077,965 165,347,444 Non-current assets: Property and equipment, net 610,634,432 634,856,075 Development costs, net 121,267,664 155,281,525 Deferred mine closure costs 5,211,505 5,955,999 Total non-current assets 737,113,601 796,093,599 907,191,566 961,441,043 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities 40,418,619 28,756,945 Zakat and income tax liability 10,932,026 5,400,000 Capital lease obligation, current portion 2,318,301 193,206 Long-term debt, current portion 50,000,000 30,000,000 Total current liabilities 103,668,946 64,350,151 Non-current liabilities Provision for mine closure costs 16,625,347 16,063,136 Capital lease obligation, net of current portion 3,898,002 359,811 Long-term debt, net of current portion and deferred finance costs 267,933,847 266,258,712 End-of-service indemnities 4,880,892 3,649,889 Deferred income taxes 4,217,658 3,792,785 Total non-current liabilities 297,555,746 290,124,333 AL MASANE AL KOBRA MINING COMPANY Balance Sheets - (Continued) December 31, 2019 2018 (Expressed in Saudi Riyals) Commitments and contingencies (Note 14) Shareholders' equity Share capital 820,000,000 820,000,000 Share premium (74,713,350 ) — Accumulated deficit (239,319,776 ) (213,033,441 ) Total shareholders' equity 505,966,874 606,966,559 907,191,566 961,441,043 AL MASANE AL KOBRA MINING COMPANY Statements of Operations December 31, 2019 2018 2017 (Expressed in Saudi Riyals) Revenues 293,811,329 263,377,273 136,629,881 Costs of revenues 261,073,821 255,313,296 162,388,373 Operating income (loss) 32,737,508 8,063,977 (25,758,492 ) General and administrative expenses 48,927,307 29,475,998 28,299,733 Loss from operations (16,189,799 ) (21,412,021 ) (54,058,225 ) Other income (expense) Finance charges (5,436,532 ) (5,969,821 ) (6,103,680 ) Other income 2,091,152 323,575 893,524 (3,345,380 ) (5,646,246 ) (5,210,156 ) Loss before Zakat and income tax (19,535,179 ) (27,058,267 ) (59,268,381 ) Zakat and income tax benefit (expense) (6,751,156 ) 1,824,929 (3,627,193 ) Net loss (26,286,335 ) (25,233,338 ) (62,895,574 ) AL MASANE AL KOBRA MINING COMPANY Statements of Changes in Shareholders' Equity (Expressed in Saudi Riyals) Retained Earnings Share Share Treasury (Accumulated Capital Premium Stock at cost Deficit) Total Balance at January 1, 2017 780,000,000 37,546,420 — (124,904,529 ) 692,641,891 Net loss — — — (62,895,574 ) (62,895,574 ) Balance at December 31, 2017 780,000,000 37,546,420 — (187,800,103 ) 629,746,317 Issuance of share premium — 2,453,580 — — 2,453,580 Conversion of share premium to share capital 40,000,000 (40,000,000 ) — — — Net loss — — — (25,233,338 ) (25,233,338 ) Balance at December 31, 2018 820,000,000 — — (213,033,441 ) 606,966,559 Share repurchase — — (74,713,350 ) — (74,713,350 ) Net loss — — — (26,286,335 ) (26,286,335 ) Balance at December 31, 2019 820,000,000 — (74,713,350 ) (239,319,776 ) 505,966,874 AL MASANE AL KOBRA MINING COMPANY Statements of Cash Flows December 31, 2019 2018 2017 (Expressed in Saudi Riyals) Cash flows from operating activities: Net loss (26,286,335 ) (25,233,338 ) (62,895,574 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 113,949,259 125,507,864 83,547,586 Accretion of deferred mine closure costs 562,211 543,198 524,829 Amortization of deferred finance costs 1,675,135 2,175,902 1,610,733 Gain on forgiveness of liabilities — — — Deferred income taxes 424,873 (7,224,929 ) 417,966 Changes in operating assets and liabilities: Accounts receivable (13,408,437 ) (8,021,219 ) (8,213,816 ) Inventories 10,593,780 (18,644,188 ) (11,351,752 ) Advances to contractors and other (30,884,252 ) 563,016 (3,944,995 ) Accounts payable and accrued liabilities 11,661,674 6,084,327 9,638,009 Zakat and income tax liability 5,532,026 1,883,327 1,583,048 End-of-service indemnities 1,231,003 1,131,360 1,037,893 Net cash provided by operating activities 75,050,937 78,765,320 11,953,927 Cash flows from investing activities: Additions to property and equipment (48,246,282 ) (28,945,309 ) (31,550,443 ) AL MASANE AL KOBRA MINING COMPANY Statements of Cash Flows - (Continued) December 31, 2019 2018 2017 (Expressed in Saudi Riyals) Cash flows from financing activities: Issuance of share capital and premium — 2,453,580 — Payments on capital lease obligations (1,059,694 ) (72,788 ) — Repurchase of treasury stock (22,151,322 ) — — Borrowings from long-term debt 50,000,000 — — Payments on long-term debt (30,000,000 ) — (5,000,000 ) Net advances from (to) shareholders (2,859,341 ) (53,015,844 ) 403,147 Net cash provided by (used in) financing activities (6,070,357 ) (50,635,052 ) (4,596,853 ) Increase (decrease) in cash and cash equivalents 20,734,298 (815,041 ) (24,193,369 ) Cash and cash equivalents, beginning of year 31,510,496 32,325,537 56,518,906 Cash and cash equivalents, end of year 52,244,794 31,510,496 32,325,537 Supplemental cash flow information Cash paid for interest 4,428,545 3,927,778 3,686,000 Cash paid for Zakat and income tax 6,086,073 3,212,813 1,626,179 Supplemental disclosure of non-cash items Assets acquired through capital lease obligations 7,933,140 625,805 — Advances to shareholders applied to treasury stock purchase 52,562,028 — — |
AMAK ORGANIZATION AND BUSINESS
AMAK ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |
ORGANIZATION AND BUSINESS | BUSINESS AND OPERATIONS OF THE COMPANY Trecora Resources (the "Company") was organized as a Delaware corporation in 1967. The Company's principal business activities are the manufacturing of various specialty petrochemicals products, specialty waxes and providing custom processing services. The Company's specialty petrochemicals operations are primarily conducted through a wholly-owned subsidiary, Texas Oil and Chemical Co. II, Inc. ("TOCCO"). TOCCO owns all of the capital stock of South Hampton Resources, Inc. ("SHR") and Trecora Chemical, Inc. ("TC"). SHR owns all of the capital stock of Gulf State Pipe Line Company, Inc. ("GSPL"). SHR owns and operates a specialty petrochemicals product facility in Silsbee, Texas which manufactures high purity hydrocarbons used primarily in polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, Canadian tar sands, and in the catalyst support industry. TC owns and operates a facility located in Pasadena, Texas which manufactures specialty waxes and provides custom processing services. These specialty waxes are used in the production of coatings, hot melt adhesives and lubricants. GSPL owns and operates pipelines that connect the SHR facility to a natural gas line, to SHR's truck and rail loading terminal and to a major petroleum pipeline owned by an unaffiliated third party. The Company owns 33% of a Saudi Arabian joint stock company, Al Masane Al Kobra Mining Company ("AMAK") (see Note 10) and approximately 55% of the capital stock of a Nevada mining company, Pioche Ely Valley Mines, Inc. ("PEVM"), which does not conduct any substantial business activity but owns undeveloped properties in the United States. On October 2, 2019, we announced that we had entered into a Share Sale and Purchase Agreement (as amended, the “Purchase Agreement”) pursuant to which we have agreed to sell our entire investment in AMAK. The share sale is expected to close on or before March 31, 2020, subject to receipt of certain governmental approvals and other customary closing conditions. AMAK's historical financial results for the periods presented are reflected in our consolidated financial statements as discontinued operations. For further details, refer to Note 6 to the Consolidated Financial Statements. We attribute revenues to countries based upon the origination of the transaction. All of our revenues for the years ended December 31, 2019 , 2018 , and 2017 , originated in the United States. In addition, all of our long-lived assets are in the United States. For convenience in this report, the terms "Company", "our", "us" or "we" may be used to refer to Trecora Resources and its subsidiaries. |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ORGANIZATION AND BUSINESS | Note 1 – Organization and Business Organization Al Masane Al Kobra Mining Company is a Saudi Arabian closed joint stock company approved by the Minister of Commerce and Industry Decree Number 247/Q dated 9/10/1428 (October 21, 2007) and registered in Jeddah under Commercial Registration No. 4030175345 on 7/1/1429 (January 16, 2008). During 2015, the head office was moved from Jeddah to Najran. Accordingly, Najran Commercial Registration No. 5950017523 dated 03/11/1431H (October 11, 2010) was modified to be the main Commercial Registration. Unless the context requires otherwise, references to “we”, “us”, “our”, “AMAK”, and the “Company” are intended to mean Al Masane Al Kobra Mining Company. All amounts are expressed in Saudi Riyals (SR) unless otherwise noted. During 2009, the authorized capital of the Company was 450,000,000 consisting of 45 million shares of 10 each of which 50% were issued for cash. The remaining 50% were issued for the contribution of mining rights and assets from Trecora Resources (Trecora) subject to Trecora’s liability for a loan in the amount of 41,250,000 due to the Ministry of Finance and National Economy. The mining rights in Al Masane mine were originally granted by Royal Decree Number M/17 effective 1/12/1413 (May 22, 1993) for a period of thirty years , with a right of renewal for a further period of twenty years to Trecora. The mining rights granted Trecora the right of exploitation in Al Masane mine located in Najran, Saudi Arabia, with an area of 44 square kilometers for a surface rental of 10,000 per square kilometer per year, i.e. 440,000 per year. As per the Ministry of Petroleum and Mineral Resources resolution dated 13/9/1429 (13/9/2008) and the ministry subsequent letter dated 2/1/1430 (30/12/2008), the aforementioned rights were transferred to us. During 2011, the Company increased its authorized share capital by SR 50,000,000 to SR 500,000,000 and issued 5,000,000 shares of 10 each at a price of SR 28 each resulting in a share premium of SR 90,000,000 . The entire 5,000,000 shares were issued for cash to Arab Mining Company (ARMICO) headquartered in Amman, Jordan. During 2013, the Company increased its authorized share capital by SR 50,000,000 to SR 550,000,000 and issued 5,000,000 shares of 10 each at a price of SR 30 each resulting in a share premium of SR 100,000,000 . The shares were issued for cash to existing shareholders. During 2015, the Company increased its authorized share capital by SR 190,000,000 to SR 740,000,000 and issued 19,000,000 shares of 10 each by transferring from share premium accounts. During 2016, the Company increased its authorized share capital by SR 40,000,000 to SR 780,000,000 and issued 4,000,000 shares of 10 each at a price of SR 20 each resulting in a share premium of SR 35,092,840 . During 2018, the Company increased share premium by SR 2,453,580 for shares that were previously issued. During 2018 the Company increased its authorized share capital by SR 40,000,000 to SR 820,000,000 and issued 4,000,000 shares of 10 each by transferring from share premium accounts. During the Company’s Extraordinary General Assembly Meeting in October of 2018, the shareholders approved to repurchase up to 2,500,000 shares from the shareholders at a price of SR 30 each and to register these shares as treasury shares. In December 2018, the Board unanimously approved this proposal and authorized the CEO to proceed with the repurchase. The Company advanced certain shareholders their portion of these proceeds in 2018. During the first quarter of 2019, the Company finalized the transaction and repurchased 2,490,445 shares for approximately SR 74,713,000 . On October 2, 2019, the Company and certain shareholders of the Company (collectively, the “Purchasers”) entered into a Share Sale and Purchase Agreement (“Purchase Agreement”) with Trecora to purchase their entire equity interest in the Company for an aggregate gross purchase price of approximately SR 264,700,000 . The Purchase Agreement contains various representations, warranties and indemnity obligations of the Purchasers and Trecora. Initially, the Purchase Agreement required the transaction to close by November 25, 2019. On January 16, 2020, the Purchasers and Trecora entered into an amendment to extend the close date to March 31, 2020 to allow additional time for the parties to obtain certain required governmental approvals. As required by the Purchase Agreement, the Purchasers advanced 5% of the purchase price to Trecora. The Company’s share of the advance was approximately, SR 2,855,000 and is included in advances to shareholders in the accompanying balance sheet for the year ended December 31, 2019. As of December 31, 2019, our ownership is as follows: Shares Ownership Percentage Saudi shareholders 37,248,210 46.8 % Trecora (US Company) 26,467,422 33.3 % ARMICO (Pan Arab Organization) 15,502,500 19.5 % Other 291,418 0.4 % 79,509,550 100.00 % Business and operations Our principal activity is to produce zinc and copper concentrates and silver and gold doré as per the license Number 993/2 dated 16/7/1428 (July 31, 2007) issued by Saudi Arabian General Investment Authority (SAGIA). We commenced our commercial production on July 1, 2012. During 2015, we received a new mining lease for an area near our current mining area for the Guyan ancient mine. Over the years, we have performed renovations and maintenance to improve recoveries overall and upgrade the precious metals circuit through the installation of SART (sulfidization, acidification, recycling, and thickening) modifications which are expected to lower chemical use, thereby reducing operating costs. During 2019, we completed an analysis of our mineral reserve estimates and extended the life of the mine and have made capital investments in the Guyan mining area. |
AMAK SUMMARY OF SIGNIFICANT ACC
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation – The consolidated financial statements include the balance sheets, statements of operations, stockholders' equity, and cash flows of the Company, TOCCO, TC, SHR, GSPL and PEVM. Other entities which are not controlled but over which the Company has the ability to exercise significant influence such as AMAK, are accounted for using the equity method of accounting. All intercompany profits, transactions and balances have been eliminated. Cash, Cash Equivalents and Short-Term Investments – Our principal banking and short-term investing activities are with local and national financial institutions. Short-term investments with an original maturity of three months or less are classified as cash equivalents. Inventories – Finished products and feedstock are recorded at the lower of cost, determined on the first-in, first-out method (FIFO), or market for SHR. For TC, inventory is recorded at the lower of cost or market as follows: (1) raw material cost is calculated using the weighted-average cost method and (2) product inventory cost is calculated using the specific cost method. Trade Receivables and Allowance for Doubtful Accounts – We evaluate the collectability of our trade receivables and adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which we become aware. For the year ended December 31, 2019, we decreased the balance by $23,000 due to collections of previously allowed for receivables. For the year ended December 31, 2018, we increased the balance by $152,000 due to concerns regarding collectability for a specific customer. For the year ended December 31, 2017, the allowance balance was not adjusted. We track customer balances and past due amounts to determine if customers may be having financial difficulties. This, along with historical experience and a working knowledge of each customer, helps determine accounts that should be written off. No amounts were written off in 2019 , 2018 or 2017 . Discontinued Operations – Assets that are sold or classified as held for sale are classified as discontinued operations provided that the disposal represents a strategic shift that has (or will have) a major effect on our operations and financial results (e.g., a disposal of a major geographical area, a major line of business, a major equity method investment or other major parts of an entity). Notes Receivable – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a non-interest note receivable is recorded with an imputed interest rate. There were no notes receivable outstanding as of December 31, 2019 or 2018. The unearned interest was reflected as a discount against the note balance. The Company evaluates the collectability of notes based upon a working knowledge of the customer. The notes are receivable from custom processing customers with whom we maintain a close relationship. Plant, Pipeline and Equipment – Plant, pipeline and equipment are stated at cost. Depreciation is provided over the estimated service lives using the straight-line method. Gains and losses from disposition are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. Major renewals and improvements are capitalized. Interest costs incurred to finance expenditures during construction phase are capitalized as part of the historical cost of constructing the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized interest costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Labor costs incurred to self-construct assets are capitalized as part of the historical cost the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized labor costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Platinum catalyst is included in plant, pipeline and equipment at cost. Amortization of the catalyst is based upon cost less estimated salvage value of the catalyst using the straight line method over the estimated useful life (see Note 8). Goodwill and Other Intangible Assets – Goodwill represents the future economic benefits arising from other assets acquired in the acquisition of TC that are not individually identified and separately recognized. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. Estimates of fair value are based on appraisals, market prices for comparable assets, or internal estimates of future net cash flows. Definite-lived intangible assets consist of customer relationships, licenses, permits and developed technology that were acquired as part of the acquisition of TC. The majority of these assets are being amortized using discounted estimated future cash flows over the term of the related agreements. Intangible assets associated with customer relationships are being amortized using the discounted estimated future cash flows method based upon assumed rates of annual customer attrition. We continually evaluate the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they will be removed from the consolidated balance sheets. Business Combinations and Related Business Acquisition Costs – Assets and liabilities associated with business acquisitions are recorded at fair value using the acquisition method of accounting. We allocate the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. We may use third-party valuation specialists to assist us in this allocation. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition. The fair value of property, plant and equipment and intangible assets are based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Business acquisition costs are expensed as incurred and are reported as general and administrative expenses in the consolidated statements of income. We define these costs to include finder's fees, advisory, legal, accounting, valuation, and other professional consulting fees, as well as, travel associated with the evaluation and effort to acquire specific businesses. Investment in AMAK – We account for our investment in AMAK using the equity method of accounting under which we record in income our share of AMAK's income or loss for each period. The amount recorded is also adjusted to reflect the amortization of certain differences between the basis in our investment in AMAK and our share of the net assets of AMAK as reflected in AMAK's financial statements (see Note 6). Any proceeds received from or payments made to AMAK are recorded as decreases or increases in the balance of our investment. We assess our investment in AMAK for impairment when events are identified, or there are changes in circumstances that may have an adverse effect on the fair value of the investment. In making our assessment we consider operating results, recoverable ore reserves, changes in mineral prices. Other Assets – Other assets include a license used in specialty petrochemicals operations, spare parts inventory, insurance receivables and certain specialty petrochemicals assets. Beginning January 1, 2017, due to the expansion of our plant assets at SHR and TC, we began inventorying spare parts for the repair and maintenance of our plant, pipeline and equipment. Spare parts are accounted for using FIFO. Long-Lived Assets Impairment – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on the undiscounted net cash flows to be generated from the asset's use. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis although other factors including the state of the economy are considered. Revenue Recognition – The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606 ("ASC 606"), Revenue from Contracts with Customers, and its amendments with a date of the initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. ASC 606 outlines a single comprehensive model for an entity to use in accounting for revenue arising from all contracts with customers, except where revenues are in scope of another accounting standard. ASC 606 superseded the revenue recognition requirements in ASC Topic 605, " Revenue Recognition", and most industry specific guidance. ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services. ASC 606 also requires certain additional revenue-related disclosures. The Company applied the modified retrospective approach under ASC 606 which allows for the cumulative effect of adopting the new guidance on the date of initial application. Use of the modified retrospective approach means the Company's comparative periods prior to initial application are not restated. The initial application was applied to all contracts at the date of the initial application. The Company has determined that the adjustments using the modified retrospective approach did not have a material impact on the date of the initial application along with the disclosure of the effect on prior periods. Accounting Policy Beginning on January 1, 2018, revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. In evaluating when a customer has control of the asset we primarily consider whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer has accepted delivery and a right to payment exists. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales and processing. The Company does not offer material rights of return or service-type warranties. For the year ended December 31, 2017 the Company recognized revenue according to FASB ASC Topic 605 ("ASC 605"), " Revenue Recognition" , when: (1) the customer accepted delivery of the product and title had been transferred or when the service was performed and the Company had no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction had occurred; (3) price was fixed and determinable; and (4) collection was assured. Product sales generally met these criteria, and revenue was recognized, when the product was delivered or title was transferred to the customer. Sales revenue was presented net of discounts, allowances, and sales taxes. Freight costs billed to customers were recorded as a component of revenue. Revenues received in advance of future sales of products or prior to the performance of services were presented as deferred revenues. Shipping and handling costs were classified as cost of product sales and processing and were expensed as incurred. Nature of goods and services The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, disaggregation of revenues, and contract balance disclosures, see Note 17. Specialty Petrochemicals segment The specialty petrochemicals segment of the Company produces eight high purity hydrocarbons and other petroleum based products including isopentane, normal pentane, isohexane and hexane. These products are used in the production of polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, crude oil from the Canadian tar sands, and in the catalyst support industry. SHR's specialty petrochemicals products are typically transported to customers by rail car, tank truck, iso-container and ship. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected 30 to 60 days subsequent to point of sale. Processing Fees – The Company's services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements the customer retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Specialty Waxes segment The specialty waxes segment of the Company manufactures and sells specialty polyethylene and poly alpha olefin waxes and also provides custom processing services for customers. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Processing Fees – The Company's promised services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements and Purchase Order Arrangements, the customer typically retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction and Purchase Order Arrangement is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Shipping and Handling Costs – Shipping and handling costs are classified as cost of product sales and processing and are expensed as incurred. Retirement Plan – We offer employees the benefit of participating in a 401(k) plan. We match 100% up to 6% of pay with vesting occurring over 2 years. For years ended December 31, 2019 , 2018 , and 2017 , matching contributions of approximately $1,321,000 , $1,502,000 , and $1,412,000 , respectively, were made on behalf of employees. Environmental Liabilities – Remediation costs are accrued based on estimates of known environmental remediation exposure. Ongoing environmental compliance costs, including maintenance and monitoring costs, are expensed as incurred. Other Liabilities – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a note receivable and a deferred liability are recorded to recover the project costs which are then capitalized. At times instead of a note receivable being established, the customer pays an upfront cost. The amortization of other liabilities is recorded as a reduction to depreciation expense over the life of the contract with the customer. As of December 31 of each year, depreciation expense was offset and reduced by approximately $0.8 million , $0.8 million , and $0.8 million , for 2019 , 2018 , and 2017 , respectively. Net Income Per Share – We compute basic income per common share based on the weighted-average number of common shares outstanding. Diluted income per common share is computed based on the weighted-average number of common shares outstanding plus the number of additional common shares that would have been outstanding if potential dilutive common shares, consisting of stock options, unvested restricted stock units, and shares which could be issued upon conversion of debt, had been issued (see Note 18). Foreign Currency – The functional currency for the Company and each of the Company's subsidiaries is the US dollar (USD). Transaction gains or losses as a result of transactions denominated and settled in currencies other than the USD are reflected in the statements of income as foreign exchange transaction gains or losses. We do not employ any practices to minimize foreign currency risks. The functional and reporting currency of AMAK is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the USD at a fixed exchange rate of 1 USD to 3.75 SR; therefore, we translate SR into our reporting currency of the USD for income statement and balance sheet purposes using the fixed exchange rate. As of December 31, 2019 , 2018 and 2017 , foreign currency translation adjustments were not significant. Management Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include allowance for doubtful accounts receivable and inventory obsolescence; assessment of impairment of our long-lived assets, goodwill, intangible assets and investments, litigation liabilities, post-retirement benefit obligations, guarantee obligations, environmental liabilities, income taxes and deferred tax valuation allowances. Actual results could differ from these estimates. Share-Based Compensation – We recognize share-based compensation of stock options granted based upon the fair value of options on the grant date using the Black-Scholes pricing model (see Note 15). Share-based compensation expense recognized during the period is based on the fair value of the portion of share-based payments awards that is ultimately expected to vest. Share-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2019 , 2018 , and 2017 includes compensation expense based on the estimated grant date fair value for awards that are ultimately expected to vest, and accordingly has been reduced for estimated forfeitures. Estimated forfeitures at the time of grant are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Guarantees – We may enter into agreements which contain features that meet the definition of a guarantee under FASB ASC 460 "Guarantees" (see Note 14). These arrangements create two types of obligations: a) We have a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and b) We have an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probable that one or more future events will occur, triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated. Fair Value – The carrying value of cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of variable rate long term debt and notes payable reflect recent market transactions and approximate carrying value. We used other observable inputs that would qualify as Level 2 inputs to make our assessment of the approximate fair value of our cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, other liabilities, notes payable and variable rate long term debt. The fair value of the derivative instruments are described below. We measure fair value by ASC Topic 820 Fair Value. ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard amends numerous accounting pronouncements but does not require any new fair value measurements of reported balances. ASC Topic 820 emphasizes that fair value, among other things, is based on exit price versus entry price, should include assumptions about risk such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. When considering the assumptions that market participants would use in pricing the asset or liability, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy prioritizes inputs used to measure fair value into three broad levels. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Derivatives – We record derivative instruments as either an asset or liability measured at fair value. Changes in the derivative instrument's fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument's gains and losses to offset related results on the hedged item in the income statement, to the extent effective, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized. Our estimate of the potential outcome of any uncertain tax issues is subject to management's assessment of relevant risks, facts, and circumstances existing at that time. We use a more likely than not threshold for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. To the extent that our assessment of such tax position changes, the change in estimate is recorded in the period in which the determination is made. We report tax-related interest and penalties as a component of income tax expense. On December 22, 2017, Public Law No. 115-97 known as the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA included a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. federal corporate income tax rate from a maximum of 35 percent to a flat 21 percent for tax years effective January 1, 2018. In addition the TJCA created prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. Reclassifications – Certain reclassifications have been made to prior year balances to conform with the current year presentation. Subsequent Events – The Company has evaluated subsequent events through March 13, 2020 , the date that the consolidated financial statements were approved by management. See Notes 6 and 16. Accounting Standards Adopted in 2019 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This update increased transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update was effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to ASC 842, Leases. ASU 2018-11 provided entities with an alternative modified transition method to elect not to recast the comparative periods presented when adopting ASC 842. The new standard provided a number of optional practical expedients in transition. The Company elected: (1) the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs and (2) the use-of-hindsight. In addition, the new standard provided practical expedients for an entity’s ongoing accounting that the Company made, such as the (1) the election for certain classes of underlying asset to not separate non-lease components from lease components and (2) the election for short-term lease recognition exemption for all leases that qualify. The Company adopted ASU 842 as of January 1, 2019, using the alternative modified transition method. 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 January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) . The amendment simplifies 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 amendment also eliminates 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 elected to early adopt this ASU on January 1, 2019. See Note 10 for a discussion of the results of our goodwill impairment testing. Recent Accounting Pronouncements 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 does not expect the adoption of this ASU to have a significant impact on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes . The amendments in this update simplify the accounting for income taxes by removing certain exceptions and clarifying certain requirements regarding franchise taxes, goodwill, consolidated tax expenses, and annual effective tax rate calculations. The ASU is effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The Company is currently assessing the impact of this ASU will have on its consolidated financial statements. |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Summary of Significant Accounting Policies The accompanying financial statements have been prepared using U.S. generally accepted accounting principles. The following is a summary of our significant accounting policies: Cash and cash equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Accounts receivable We evaluate the collectability of our accounts receivable and the adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which the Company becomes aware. During the years ended December 31, 2019, 2018, and 2017, we sold our concentrates and doré pursuant to sales contracts with primarily one customer. No amounts have been written off for the years ended December 31, 2019, 2018, and 2017. In addition, we determined that an allowance for doubtful accounts was not necessary at December 31, 2019 and 2018. Inventories The components of inventories include mill stockpiles, precious metal doré, chemicals, and mining supplies. Inventories are stated at the lower of weighted-average cost or market. Costs of mill stockpiles inventory include labor and benefits, supplies, energy, depreciation, depletion, amortization, and other necessary costs incurred with the extraction and processing of ore. Corporate general and administrative costs are not included in inventory costs. Because it is generally impracticable to determine the minerals contained in mill stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to the mill stockpiles is based on surveyed volumes of mined material and daily production records. Expected mineral recovery rates from the mill stockpiles are determined by various metallurgical testing methods. Property and equipment Property and equipment is carried at cost less accumulated depreciation. Expenditures for replacements and improvements are capitalized. Costs related to periodic maintenance are expensed as incurred. Depletion of the mining assets is determined using the unit-of-production method based on total estimated proven and probable reserves. Depletion and amortization using the unit-of-production method is recorded upon extraction of the ore, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over their estimated useful lives ranging from 3 to 20 years . Borrowing costs that are directly attributable to the acquisition, construction or production of assets are capitalized as part of the cost of those assets. Assets under construction are capitalized in the construction in progress account. Upon completion, the cost of the related asset is transferred to the appropriate category of property and equipment. Development costs Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources are charged to expense as incurred. Development costs are capitalized beginning after proven and probable reserves have been established. Development costs include costs incurred in mine pre-production activities undertaken to gain access to proven and probable reserves, including shafts, drifts, ramps, permanent excavations, infrastructure and removal of overburden. These costs are deferred net of the proceeds from the sale of any production during the development period and then amortized using an estimated unit-of-production method. If a mine is no longer considered economical, the accumulated costs are charged to the statement of operations in the year in which the determination is made. Asset impairment We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Long-lived assets are evaluated for impairment under the two-step model. When events or circumstance suggest impairment of long-lived assets, estimated undiscounted future net cash flows are calculated using future estimated commodity prices, proven and probable reserves, and estimated net proceeds from the disposition of assets on retirement, less operating, sustaining capital, and reclamation costs. If it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. Fair value is generally determined using valuation techniques such as estimated future cash flows. Because the cash flows used to assess recoverability of our long-lived assets and measure fair value of our mining operations require us to make several estimates and assumptions that are subject to risk and uncertainty, changes in these estimates and assumptions could result in the impairment of our long-lived asset values. Based on our evaluation, we recorded no impairment losses during the years ended December 31, 2019, 2018 and 2017. End-of-service indemnities Employee end-of-service benefits are accrued for the benefit of employees under the terms and conditions of Saudi Labor Law and Regulations and their employment contracts. End-of-service indemnities are provided for and accrued in the financial statements based on the respective employees' salaries and length of service. Foreign currency Our functional currency is the Saudi Riyal (SR). In June 1986, the Saudi Riyal was officially pegged to the U.S. Dollar at a fixed exchange rate of 1 U.S. Dollar to 3.75 riyals. Foreign currency transactions are translated into Saudi Riyals at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rates prevailing at that date. Any gains and losses from settlement and translation of foreign currency transactions are included in the statement of operations. There were no material foreign-currency exchange gains or losses or translation adjustments during the years ended December 31, 2019, 2018 and 2017. Leasing arrangements We periodically lease operating equipment, facilities, and office buildings. Rentals payable under operating leases are charged to the statements of operations on a straight-line basis over the term of the relevant lease. For any capital leases, the present value of future minimum lease payments at the inception of the lease is reflected as an asset and a liability in the balance sheet. Amounts due within one year are classified as short-term liabilities and the remaining balance as long-term liabilities. Finance charges are charged to the statement of operations. Operating lease expense amounted to approximately SR 4,015,000 , SR 1,619,000 and SR 1,454,000 for the years ended December 31, 2019, 2018 and 2017, respectively. Environmental costs Environmental costs are expensed or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can reasonably be estimated. Ongoing compliance costs are expensed as incurred. Asset retirement obligations and costs We record the fair value of our estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period in which the obligation is incurred. AROs associated with long-lived assets are those for which there is a legal obligation to settle under various laws, statues, or regulations. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of revenues. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated (primarily on a unit-of-production basis) over the asset’s respective useful life. Asset retirement obligations and costs - continued Our AROs consist primarily of costs associated with mine reclamation and closure activities and are included in deferred mine closure costs on the accompanying balance sheets. At least annually, we review our ARO estimates for changes in the projected timing and changes in cost estimates and additional AROs incurred during the period. Zakat and income tax We are subject to the Regulations of the General Authority of Zakat and Tax (GAZT) in the Kingdom of Saudi Arabia. Under these regulations, Zakat is payable at 2.5% on the basis of the portion of our Zakat base attributable to our Saudi stockholders, and income tax is payable at 20% on the portion of our taxable income attributable to our non-Saudi stockholders. Zakat and income tax are provided on an accrual basis. Any difference in the estimate is recorded when the final assessment is approved, at which time the provision is cleared. We account for deferred income taxes on non-Saudi owners utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the income tax basis of assets and liabilities, as measured by the effective tax rate. When appropriate, we evaluate the need for a valuation allowance based on a more likely than not threshold to reduce deferred tax assets to estimated recoverable amounts. We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We report tax-related interest and penalties as a component of Zakat and income tax expense. We recognized no material adjustment for unrecognized income tax liabilities. Revenue recognition The Company adopted ASC 606, Revenues from Contracts with Customers, effective January 1, 2019, on a modified retrospective basis, applying the standards to all contracts that are not completed as such date. The Company’s revenues primary consists of sales of copper and zinc. Other than increased disclosures, the adoption of the new guidance did not have an impact on the Company’s revenue recognition. We sell our products pursuant to individual sales contracts entered into with a customer who acts as an intermediary and resells our products to end users. The Company considers each sales contract to be a single performance obligation, represented by the delivery of a series of distinct goods that are substantially the same, with the same pattern of transfer to the Company's customer. The Company concluded this as, based on the nature of its contracts, the customer receives the benefit of mineral sold as it is shipped per the terms of the commercial invoice at each delivery date. In addition, the Company considers that it has a right to consideration from its customers in an amount that corresponds directly to the value transferred to those customers that being the quantity of mineral delivered at the price per unit delivered. Accordingly, the Company recognizes revenue at the amount to which it has the right to invoice (the invoice practical expedient), as it believes that this method is a faithful depiction of the transfer of goods to its customers. Revenue is recognized when or as the performance obligations are satisfied, when the Company transfers control of the goods and title passes to the customer. Control is transferred generally upon the completion of loading the material as the point of origin. This is the point which the customer obtains legal title to the product as well as the ability to direct the use of and obtain substantially all the remaining benefits of ownership of the assets. Sales are recorded based on a provisional sales price or a final sales price calculated in accordance with the terms specified in the relevant sales contract. Under the long-established structure of sales agreements prevalent in the industry, the copper and zinc contained in concentrate is generally “provisionally” priced at the time of shipment. The provisional price received at the time of shipment is later adjusted to a “final” price based on quoted monthly average spot prices on the London Metal Exchange (LME) for a specified future month. We record revenues at the time of shipment (when title and risk of loss pass) based on then-current LME prices, and we account for any changes between the sales price recorded at the time of shipment and subsequent changes in the LME prices through the date of final pricing as gains or losses from a derivative embedded in the sales contract (a futures contract initiated at the date of shipment and settled upon the determination of the “final price”) which is bifurcated and separately accounted for at fair value. The host contract is the sale of the metals contained in the concentrates at the then-current LME price as defined in the contract. Mark-to-market price fluctuations recorded through the settlement date are reflected in revenues for sales contracts. Our embedded derivatives at December 31, 2019 and 2018, were not significant to the financial statements. Revenues from concentrate sales are recorded net of treatment and refining charges. These allowances are a negotiated term of each contract. Treatment and refining charges represent payments or price adjustments to smelters and refiners and are either fixed, or in certain cases, vary with the price of metals (referred to as price participation). Management estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation and amortization; zakat and income taxes; environmental obligations; reclamation and closure costs; estimates of recoverable materials in mill stockpiles; fair value of embedded derivatives; end-of-service indemnities; and asset impairment, including estimates used to derive future cash flows associated with those assets. Actual results could differ from these estimates. Recent accounting pronouncements In February 2016 the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and does not expect to early adopt. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above. Subsequent events We have evaluated events and transactions subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through March 11, 2020, the date on which the financial statements were available to be issued. |
AMAK LIQUIDITY AND CAPITAL RESO
AMAK LIQUIDITY AND CAPITAL RESOURCES | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
LIQUIDITY AND CAPITAL RESOURCES | Liquidity and Capital Resources As shown in the financial statements, we have incurred three consecutive years of net losses however, the Company has operating income and generated cash from operations for the last two years . In addition, we have updated our mineral reserve estimates and extended the life of the mine. We believe that our continued operations and the additional debt financing discussed in Note 10 will provide us the necessary liquidity and capital resources. |
AMAK INVENTORIES
AMAK INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
Inventory [Line Items] | |
INVENTORIES | INVENTORIES Inventories include the following at December 31: 2019 2018 (thousands of dollars) Raw material $ 2,100 $ 4,742 Work in process 142 173 Finished products 11,382 11,624 Total inventory $ 13,624 $ 16,539 Inventory serves as collateral for our amended and restated loan agreement with a domestic bank (see Note 13). Inventory included products in transit valued at approximately $2.9 million and $4.1 million at December 31, 2019 and 2018 , respectively. |
AMAK | |
Inventory [Line Items] | |
INVENTORIES | Inventories Inventories consisted of the following at: December 31, 2019 2018 Stockpile ore 18,657,218 19,134,297 Ore concentrates 6,294,948 17,020,657 Precious metal dore 4,490,589 2,159,192 Explosives 326,599 1,134,728 Chemicals and other 5,507,986 6,422,246 35,277,340 45,871,120 |
AMAK ADVANCES TO CONTRACTORS AN
AMAK ADVANCES TO CONTRACTORS AND OTHER | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ADVANCES TO CONTRACTORS AND OTHER | Advances to Contractors and Other Advances to contractors and other consisted of the following at: December 31, 2019 2018 Advances to contractors 42,672,136 15,127,502 Prepaid expenses 5,185,037 1,196,218 Other miscellaneous advances and receivables 2,195,845 2,845,045 50,053,018 19,168,765 |
AMAK PROPERTY AND EQUIPMENT
AMAK PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |
PROPERTY AND EQUIPMENT | PLANT, PIPELINE AND EQUIPMENT Plant, pipeline and equipment include the following at December 31: 2019 2018 (thousands of dollars) Platinum catalyst $ 1,580 $ 1,612 Catalyst 4,095 3,131 Land 5,428 5,428 Plant, pipeline and equipment 258,651 253,905 Construction in progress 5,052 4,343 Total plant, pipeline and equipment 274,806 268,419 Less accumulated depreciation (85,887 ) (73,762 ) Net plant, pipeline and equipment $ 188,919 $ 194,657 Plant, pipeline and equipment serve as collateral for our amended and restated loan agreement with a domestic bank (see Note 13). Interest capitalized for construction for 2019 , 2018 and 2017 was approximately nil , $0.7 million and $0.9 million , respectively. Labor capitalized for construction for 2019 , 2018 and 2017 was approximately nil , $2.3 million and $4.3 million , respectively. Catalyst amortization relating to the platinum catalyst which is included in cost of sales was approximately $1.3 million , $0.1 million and nil for 2019 , 2018 and 2017 , respectively. |
AMAK | |
Property, Plant and Equipment [Line Items] | |
PROPERTY AND EQUIPMENT | Property and Equipment Property and equipment, net consisted of the following at: December 31, 2019 2018 Buildings 191,838,962 191,041,157 Leasehold improvements 1,838,317 1,838,317 Heavy equipment 136,066,275 118,125,568 Motor vehicles 22,467,300 22,467,300 Civil works 16,288,221 15,662,671 Tailings dam 23,900,160 23,042,594 Plant and machinery 326,974,958 324,372,695 Mining assets – rehabilitation costs 98,894,826 98,894,826 Mining assets – underground development costs 299,224,519 267,128,896 Construction in progress 4,789,313 5,106,409 1,122,282,851 1,067,680,433 Less accumulated depreciation, depletion and amortization (511,648,419 ) (432,824,358 ) 610,634,432 634,856,075 Property and equipment serve as collateral for the SIDF loan agreement (see Note 10). Depreciation, depletion and amortization expense related to property and equipment was approximately, SR 79,000,000 , SR 88,000,000 and SR 64,300,000 for years ended December 31, 2019, 2018 and 2017, respectively. |
AMAK DEVELOPMENT COSTS
AMAK DEVELOPMENT COSTS | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
DEVELOPMENT COSTS | Development Costs Development costs, net consisted of the following at: December 31, 2019 2018 Cost 289,973,237 289,973,237 Accumulated amortization (168,705,573 ) (134,691,712 ) 121,267,664 155,281,525 Development costs are amortized using the unit of production method upon extraction of the ore. Amortization expenses related to development costs was approximately SR 34,014,000 , SR 36,250,000 and SR 18,200,000 for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
AMAK ACCOUNTS PAYABLE, ACCRUED
AMAK ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |
ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES | ACCRUED LIABILITIES Accrued liabilities at December 31 are summarized as follows: 2019 2018 (thousands of dollars) Accrued state taxes $ 215 $ 210 Accrued payroll 1,250 936 Accrued interest 33 31 Accrued officer compensation 1,687 — Accrued restructuring & severance expenses (Note 21) 16 1,221 Accrued foreign taxes — 802 Accrued professional expenses (Note 6) 1,000 — Other liabilities 1,539 2,239 Total $ 5,740 $ 5,439 |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES | Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following at: December 31, 2019 2018 Accounts payable and accrued liabilities 36,571,709 27,306,933 Accrued salaries and payroll expenses 3,846,910 1,450,012 40,418,619 28,756,945 |
AMAK ZAKAT AND INCOME TAX
AMAK ZAKAT AND INCOME TAX | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | |
ZAKAT AND INCOME TAX | INCOME TAXES The provision for income taxes from continuing operations consisted of the following: Year ended December 31, 2019 2018 2017 (thousands of dollars) Current federal benefit $ — $ (74 ) $ (1,202 ) Current state expense 91 31 282 Deferred federal benefit (3,564 ) (813 ) (5,389 ) Deferred state expense (benefit) (93 ) 210 81 Income tax benefit $ (3,566 ) $ (646 ) $ (6,228 ) The difference between the effective tax rate in income tax expense and the Federal statutory rate of 21% for the years ended December 31, 2019 and 2018, and 35% for the year ended December 31, 2017 , is as follows: 2019 2018 2017 (thousands of dollars) Income taxes at U.S. statutory rate $ (3,455 ) $ (661 ) $ 4,816 State taxes, net of federal benefit 256 234 235 Net operating loss carryback — — (961 ) Research and development credits (203 ) (263 ) — Permanent and other items (164 ) 44 (11 ) Deferred tax impact of US tax reform — — (10,307 ) Total tax benefit $ (3,566 ) $ (646 ) $ (6,228 ) Permanent differences are primarily due to the Federal manufacturer's deduction, in applicable year 2017, research and development credit, and stock-based compensation. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 ("TCJA") was signed into law making significant changes to the Internal Revenue Code. The changes as a result of the TCJA, which had the most significant impact on the Company's federal income taxes are as follows: Reduction of the U.S. Corporate Income Tax Rate - The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the TCJA, the Company revalued its ending net deferred tax liabilities at December 31, 2017 . Acceleration of Depreciation - The Company recognized a provisional reduction to net deferred tax assets attributable to the accelerated depreciation for certain assets placed into service after September 27, 2017. The provisional estimate was finalized including consideration of TCJA on long term construction projects. The Company elected to recognize the income tax effects of the TCJA in its financial statements in accordance with Staff Accounting Bulletin 118 (SAB 118), which provides guidance for the application of ASC Topic 740 Income Taxes, in the reporting period in which the TCJA was signed into law. During the fourth quarter of 2018, we completed our accounting for the Tax Act based on the current regulatory guidance available at the end of the SAB 118 measurement period and recorded no material net adjustments to our provisional estimate. Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2019 2018 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (29,227 ) $ (25,169 ) Intangible assets — (1,075 ) Other assets (32 ) (40 ) Operating lease asset (2,838 ) — Investment in AMAK (302 ) (671 ) Total deferred tax liabilities $ (32,399 ) $ (26,955 ) Deferred tax assets: Net operating loss carryforward 11,685 9,073 Intangible assets 3,699 — Operating lease liability 2,838 — Stock-based compensation 1,093 954 Foreign tax credit 891 802 Accounts receivable 240 238 Mineral interests 226 226 Interest expense carryforward 211 — General business credit 140 — Inventory 111 133 Post-retirement benefits 71 79 Charitable contributions 45 — Gross deferred tax assets 21,250 11,505 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 21,024 $ 11,279 Net deferred tax liabilities $ (11,375 ) $ (15,676 ) In connection with the proceeds received from AMAK in connection with its share repurchase program (See Note 6), the Company accrued a deferred tax asset (foreign tax credit) and the corresponding liability for the Saudi Arabian tax which was settled during 2019. We provided a valuation allowance in 2019 and 2018 against certain deferred tax assets because of uncertainties regarding their realization. As of December 31, 2019 and 2018, we have federal income tax net operating losses ("NOLs") carryforwards of $56.6 million and $43.2 million , respectively. The NOLs were created after the enactment of TCJA and therefore do not expire but may offset only 80% of taxable income in an annual period. 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 February 2020 on the selection of our December 31, 2017 tax return for audit. In prior years, we received notification that Texas selected our R&D credit calculations for 2014 and 2015 for audit. The state of Texas had suspended their examination while they comprehensively reviewed their audit procedures for consistency. During the fourth quarter of 2019, we received notice that Texas had completed their review of their procedures and initiated additional requests for information. We do not expect any changes related to the Federal or Texas audits. Our federal and Texas tax returns remain open for examination for the years 2016 through 2019. We recognized no adjustment for uncertain tax positions. As of December 31, 2019 , and 2018 , no interest or penalties related to uncertain tax positions had been accrued. |
AMAK | |
Income Tax Contingency [Line Items] | |
ZAKAT AND INCOME TAX | Zakat and Income Tax We have submitted our Zakat and income tax return for the year ended December 31, 2018 and have obtained our 2018 Zakat certificate. We are in the process of preparing and submitting our Zakat and income tax return for the year 2019. The Zakat base for the Saudi shareholders was positive in 2019, 2018 and 2017 and the corresponding Zakat expense and liability has been recorded. In 2019 and 2018, there was a taxable profit attributable to our non-Saudi (foreign) shareholders and the current income tax expense and liability has also been recorded, also included in the liability is withholding on non-Saudi shareholders in connection with the share repurchase as discussed in Note 1. There was no taxable profit attributable to our non-Saudi (foreign) shareholders for 2017, therefore, no current income tax liability is due in that year. The components of Zakat and income tax expense (benefit) are as follows: Years ended December 31, 2019 2018 2017 Deferred income tax benefit 1,737,276 (12,961,569 ) (8,617,706 ) Change in valuation allowance (1,312,403 ) 5,736,640 9,035,670 Current Zakat and income tax expense 6,326,283 5,400,000 3,209,229 Zakat and income tax expense (benefit) 6,751,156 (1,824,929 ) 3,627,193 The difference between the effective income tax rate and the statutory rate for non-Saudi shareholders of 20% for the years ended December 31, 2019, 2018, and 2017, relates primarily to changes in the valuation allowance and adjustments to estimates in depreciation. Tax effects of temporary differences that give rise to significant portions of non-Saudi owners deferred tax assets and deferred tax liabilities were as follows: December 31, 2019 2018 Deferred tax assets: Loss carryforward 41,293,547 42,193,939 Other 799,526 656,819 42,093,073 42,850,758 Deferred tax liabilities: Property and Equipment (8,785,642 ) (7,806,051 ) Net deferred tax asset 33,307,431 35,044,707 Valuation allowance (37,525,089 ) (38,837,492 ) Net deferred tax liability (4,217,658 ) (3,792,785 ) At December 31, 2019 and 2018, we had tax loss carryforwards totaling approximately SR 206,468,000 and SR 210,970,000 . Tax losses may be carried forward indefinitely subject to certain annual limitations for non-Saudi shareholders. We have provided a valuation allowance in 2019 and 2018 against a portion of our gross deferred tax assets because of uncertainties regarding their realization. |
AMAK LONG-TERM DEBT
AMAK LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Debt Instrument [Line Items] | |
LONG-TERM DEBT | Long-term Debt Saudi Industrial Development Fund (SIDF) During 2010, the Company entered into a loan agreement with the SIDF for SR 330,000,000 to finish the development of the mine and provide working capital. In July 2018, we amended our agreement with SIDF to adjust the repayment schedule and extend the maturity date to 2024. The loan agreement is collateralized by all the assets of Company and is guaranteed by the shareholders. Banque Saudi Fransi (BSF) During 2019, the Company obtained a credit facility from BSF for SR 110,518,400 . The facility is to be used to finance capital expenditures related to Guyan and provide bridge financing to SIDF. The agreement bears interest at Saudi Arabian Interbank Offered Rate (SAIBOR) plus 2.5% per annum. In December 2019, the Company received proceeds of SR 50,000,000 which will be repaid starting on March 31, 2021 through equal quarterly installments of approximately SR 4,167,000 with the final payment due on December 31, 2023. Under the terms of the agreements with SIDF and BSF, we are required to maintain certain financial covenants, among other requirements. Long-term debts are summarized as follows at: December 31, 2019 2018 SIDF 275,000,000 305,000,000 BSF 50,000,000 — Deferred finance charges (7,066,153 ) (8,741,288 ) Total debt 317,933,847 296,258,712 Less current portion 50,000,000 30,000,000 Total long-term debt, less current portion 267,933,847 266,258,712 Deferred finance costs are comprised of SIDF loan origination charges which are capitalized and amortized over the period of the related loan which approximates the interest method. Loan fees of SR 7,066,153 and SR 8,741,288 net of accumulated amortization are included net with long-term debt at December 31, 2019 and 2018. Amortization of loan fees amounted to approximately SR 1,639,000 , SR 1,639,000 , and SR 1,611,000 for the years ended December 31, 2019, 2018, and 2017, respectively. The repayment schedule is as follows: Years Ending December 31, 2020 50,000,000 2021 76,666,668 2022 76,666,668 2023 86,666,664 2024 35,000,000 325,000,000 |
AMAK END-OF-SERVICE INDEMNITIES
AMAK END-OF-SERVICE INDEMNITIES | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
END-OF-SERVICE INDEMNITIES | End-of-Service Indemnities The change in the end-of-service indemnities provision is as follows: Years Ended December 31, 2019 2018 Balance, beginning of year 3,649,889 2,518,529 Provision for the year 2,208,156 1,347,418 Paid during the year (977,153 ) (216,058 ) Balance, end of year 4,880,892 3,649,889 |
AMAK ASSET RETIREMENT OBLIGATIO
AMAK ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
ASSET RETIREMENT OBLIGATIONS | Asset Retirement Obligations During 2012, we recorded an ARO for deferred mine closure costs of approximately SR 12,843,000 . These deferred mine closure costs are being amortized over the estimated life of the mine. Amortization expense was approximately SR 745,000 , SR 745,000 , and SR 1,117,000 for the years ended December 31, 2019, 2018, and 2017. Deferred mine closure costs consisted of the following at: December 31, 2019 2018 Cost 12,842,625 12,842,625 Accumulated amortization (7,631,120 ) (6,886,626 ) 5,211,505 5,955,999 A summary of changes in our provision for mine closure costs is as follows: Years Ended December 31, 2019 2018 2017 Balance, beginning of year 16,063,136 15,519,938 14,995,109 Accretion expense 562,211 543,198 524,829 Balance, end of year 16,625,347 16,063,136 15,519,938 ARO costs may increase or decrease significantly in the future as a result of changes in regulations, changes in engineering designs and technology, permit modifications or updates, changes in mine plans, inflation or other factors and as actual reclamation spending occurs. |
AMAK GENERAL AND ADMINISTRATIVE
AMAK GENERAL AND ADMINISTRATIVE EXPENSES | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
GENERAL AND ADMINISTRATIVE EXPENSES | General and Administrative Expenses A summary of general and administrative expenses is as follows: Years Ended December 31, 2019 2018 2017 Wages, salaries and related costs 37,273,010 17,036,965 14,837,901 Mine closure and environmental 1,306,705 1,287,698 1,641,580 Office expenses 8,831,910 9,287,218 6,589,090 Travel and accommodation 27,182 593,046 2,958,938 Professional fees 1,488,500 1,271,071 2,272,224 48,927,307 29,475,998 28,299,733 |
AMAK COMMITMENTS AND CONTINGENC
AMAK COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Loss Contingencies [Line Items] | |
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, the Company's 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 Loan was amended to adjust the repayment schedule and extend the repayment terms through April 2024. The total amount outstanding on the Loan at December 31, 2019 was 275.0 million Saudi Riyals (US $73.3 million ). See additional discussion including the release of the guarantee in connection with the AMAK sale in Note 6. Operating Lease Commitments See Note 9 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 In accordance with our supplier agreements, on a recurring monthly basis, the Company commits to purchasing a determined volume of feedstock in anticipation of upcoming requirements. Feedstock purchases are invoiced and recorded when they are delivered. As of December 31, 2019 and 2018 , the value of the remaining undelivered feedstock approximated $3.5 million and $3.9 million , respectively. From time to time, we may incur shortfall fees due to feedstock purchases being below the minimum amounts as prescribed by our agreements with our suppliers. The shortfall fee expenses were not significant for the years ended December 31, 2019 , 2018 , and 2017 . Environmental Remediation Amounts charged to expense for various activities related to environmental monitoring, compliance, and improvements were approximately $868,000 in 2019 , $745,000 in 2018 and $593,000 in 2017 . |
AMAK | |
Loss Contingencies [Line Items] | |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies Operating lease obligations Our lease commitment for our surface mining lease was initially granted for a period of 30 years through 2024. The lease allows for renewal for an additional 20 years . We also have leases for our corporate offices and three residential villas in Najran through 2025. There is also a mining lease that covers the Guyan area for a period of 20 years through 2034. A summary of these commitments are as follows: Years Ending December 31, 2020 990,000 2021 990,000 2022 990,000 2023 550,000 2024 550,000 Thereafter 1,100,000 5,170,000 Capital lease obligations We lease certain equipment vehicles under capital lease obligations that are set to expire at various dates through 2021. The future minimum lease payments under the capital lease obligations are as follows for the years ending December 31: 2020 2,894,906 2021 2,791,921 2022 1,482,543 Total minimum lease payments 7,169,370 Less deferred financial charges (953,067 ) Total capital lease obligations 6,216,303 Less: current portion of capital lease obligations 2,318,301 Total long term portion, net current portion 3,898,002 |
AMAK FAIR VALUE MEASUREMENT
AMAK FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Fair Value Measurement | Fair Value Measurement Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means; and Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). We did not have any significant transfers in or out of Levels 1, 2, or 3 in 2019 or 2018. The embedded derivatives in our provisional sales contracts are considered Level 2 measurements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |
Principles of Consolidation | Principles of Consolidation – The consolidated financial statements include the balance sheets, statements of operations, stockholders' equity, and cash flows of the Company, TOCCO, TC, SHR, GSPL and PEVM. Other entities which are not controlled but over which the Company has the ability to exercise significant influence such as AMAK, are accounted for using the equity method of accounting. All intercompany profits, transactions and balances have been eliminated. |
Cash, Cash Equivalents and Short-Term Investments | Cash, Cash Equivalents and Short-Term Investments – Our principal banking and short-term investing activities are with local and national financial institutions. Short-term investments with an original maturity of three months or less are classified as cash equivalents. |
Inventories | Inventories – Finished products and feedstock are recorded at the lower of cost, determined on the first-in, first-out method (FIFO), or market for SHR. For TC, inventory is recorded at the lower of cost or market as follows: (1) raw material cost is calculated using the weighted-average cost method and (2) product inventory cost is calculated using the specific cost method. |
Trade Receivables and Allowance for Doubtful Accounts | Trade Receivables and Allowance for Doubtful Accounts – We evaluate the collectability of our trade receivables and adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which we become aware. For the year ended December 31, 2019, we decreased the balance by $23,000 due to collections of previously allowed for receivables. For the year ended December 31, 2018, we increased the balance by $152,000 due to concerns regarding collectability for a specific customer. For the year ended December 31, 2017, the allowance balance was not adjusted. We track customer balances and past due amounts to determine if customers may be having financial difficulties. This, along with historical experience and a working knowledge of each customer, helps determine accounts that should be written off. |
Discontinued Operations | Discontinued Operations – Assets that are sold or classified as held for sale are classified as discontinued operations provided that the disposal represents a strategic shift that has (or will have) a major effect on our operations and financial results (e.g., a disposal of a major geographical area, a major line of business, a major equity method investment or other major parts of an entity). |
Notes and Accounts Receivable | Notes Receivable – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a non-interest note receivable is recorded with an imputed interest rate. There were no notes receivable outstanding as of December 31, 2019 or 2018. The unearned interest was reflected as a discount against the note balance. The Company evaluates the collectability of notes based upon a working knowledge of the customer. The notes are receivable from custom processing customers with whom we maintain a close relationship. |
Plant, Pipeline and Equipment | Plant, Pipeline and Equipment – Plant, pipeline and equipment are stated at cost. Depreciation is provided over the estimated service lives using the straight-line method. Gains and losses from disposition are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. Major renewals and improvements are capitalized. Interest costs incurred to finance expenditures during construction phase are capitalized as part of the historical cost of constructing the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized interest costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Labor costs incurred to self-construct assets are capitalized as part of the historical cost the assets. Construction commences with the development of the design and ends when the assets are ready for use. Capitalized labor costs are included in plant, pipeline and equipment and are depreciated over the service life of the related assets. Platinum catalyst is included in plant, pipeline and equipment at cost. Amortization of the catalyst is based upon cost less estimated salvage value of the catalyst using the straight line method over the estimated useful life (see Note 8). |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets – Goodwill represents the future economic benefits arising from other assets acquired in the acquisition of TC that are not individually identified and separately recognized. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. Estimates of fair value are based on appraisals, market prices for comparable assets, or internal estimates of future net cash flows. Definite-lived intangible assets consist of customer relationships, licenses, permits and developed technology that were acquired as part of the acquisition of TC. The majority of these assets are being amortized using discounted estimated future cash flows over the term of the related agreements. Intangible assets associated with customer relationships are being amortized using the discounted estimated future cash flows method based upon assumed rates of annual customer attrition. We continually evaluate the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they will be removed from the consolidated balance sheets. |
Business Combinations and Related Business Acquisition Costs | Business Combinations and Related Business Acquisition Costs – Assets and liabilities associated with business acquisitions are recorded at fair value using the acquisition method of accounting. We allocate the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. We may use third-party valuation specialists to assist us in this allocation. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition. The fair value of property, plant and equipment and intangible assets are based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Business acquisition costs are expensed as incurred and are reported as general and administrative expenses in the consolidated statements of income. We define these costs to include finder's fees, advisory, legal, accounting, valuation, and other professional consulting fees, as well as, travel associated with the evaluation and effort to acquire specific businesses. |
Investment in AMAK | Investment in AMAK – We account for our investment in AMAK using the equity method of accounting under which we record in income our share of AMAK's income or loss for each period. The amount recorded is also adjusted to reflect the amortization of certain differences between the basis in our investment in AMAK and our share of the net assets of AMAK as reflected in AMAK's financial statements (see Note 6). Any proceeds received from or payments made to AMAK are recorded as decreases or increases in the balance of our investment. We assess our investment in AMAK for impairment when events are identified, or there are changes in circumstances that may have an adverse effect on the fair value of the investment. In making our assessment we consider operating results, recoverable ore reserves, changes in mineral prices. |
Other Assets | Other Assets – Other assets include a license used in specialty petrochemicals operations, spare parts inventory, insurance receivables and certain specialty petrochemicals assets. Beginning January 1, 2017, due to the expansion of our plant assets at SHR and TC, we began inventorying spare parts for the repair and maintenance of our plant, pipeline and equipment. Spare parts are accounted for using FIFO. |
Long-Lived Assets Impairment | Long-Lived Assets Impairment – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on the undiscounted net cash flows to be generated from the asset's use. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis although other factors including the state of the economy are considered. |
Revenue Recognition and Shipping and Handling Costs | Revenue Recognition – The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606 ("ASC 606"), Revenue from Contracts with Customers, and its amendments with a date of the initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. ASC 606 outlines a single comprehensive model for an entity to use in accounting for revenue arising from all contracts with customers, except where revenues are in scope of another accounting standard. ASC 606 superseded the revenue recognition requirements in ASC Topic 605, " Revenue Recognition", and most industry specific guidance. ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services. ASC 606 also requires certain additional revenue-related disclosures. The Company applied the modified retrospective approach under ASC 606 which allows for the cumulative effect of adopting the new guidance on the date of initial application. Use of the modified retrospective approach means the Company's comparative periods prior to initial application are not restated. The initial application was applied to all contracts at the date of the initial application. The Company has determined that the adjustments using the modified retrospective approach did not have a material impact on the date of the initial application along with the disclosure of the effect on prior periods. Accounting Policy Beginning on January 1, 2018, revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. In evaluating when a customer has control of the asset we primarily consider whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer has accepted delivery and a right to payment exists. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales and processing. The Company does not offer material rights of return or service-type warranties. For the year ended December 31, 2017 the Company recognized revenue according to FASB ASC Topic 605 ("ASC 605"), " Revenue Recognition" , when: (1) the customer accepted delivery of the product and title had been transferred or when the service was performed and the Company had no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction had occurred; (3) price was fixed and determinable; and (4) collection was assured. Product sales generally met these criteria, and revenue was recognized, when the product was delivered or title was transferred to the customer. Sales revenue was presented net of discounts, allowances, and sales taxes. Freight costs billed to customers were recorded as a component of revenue. Revenues received in advance of future sales of products or prior to the performance of services were presented as deferred revenues. Shipping and handling costs were classified as cost of product sales and processing and were expensed as incurred. Nature of goods and services The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, disaggregation of revenues, and contract balance disclosures, see Note 17. Specialty Petrochemicals segment The specialty petrochemicals segment of the Company produces eight high purity hydrocarbons and other petroleum based products including isopentane, normal pentane, isohexane and hexane. These products are used in the production of polyethylene, packaging, polypropylene, expandable polystyrene, poly-iso/urethane foams, crude oil from the Canadian tar sands, and in the catalyst support industry. SHR's specialty petrochemicals products are typically transported to customers by rail car, tank truck, iso-container and ship. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected 30 to 60 days subsequent to point of sale. Processing Fees – The Company's services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements the customer retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Specialty Waxes segment The specialty waxes segment of the Company manufactures and sells specialty polyethylene and poly alpha olefin waxes and also provides custom processing services for customers. Product Sales – The Company sells individual (distinct) products to its customers on a stand-alone basis (point-of-sale) without any further integration. There is no significant modification of any one or more products sold to fulfill another promised product or service within any of the Company's product sale transactions. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Processing Fees – The Company's promised services consist of processing customer supplied feedstocks into custom products including, if requested, services for forming, packaging, and arranging shipping. Pursuant to Tolling Agreements and Purchase Order Arrangements, the customer typically retains title to the feedstocks and processed products. The performance obligation in each Tolling Agreement transaction and Purchase Order Arrangement is the processing of customer provided feedstocks into custom products and is satisfied over time. The amount of consideration received for product sales is stated within the executed invoice with the customer. Payment is typically due and collected within 30 days subsequent to point of sale. Shipping and Handling Costs – Shipping and handling costs are classified as cost of product sales and processing and are expensed as incurred. |
Retirement Plan | Retirement Plan – We offer employees the benefit of participating in a 401(k) plan. We match 100% up to 6% of pay with vesting occurring over 2 years. |
Environmental Liabilities | Environmental Liabilities – Remediation costs are accrued based on estimates of known environmental remediation exposure. Ongoing environmental compliance costs, including maintenance and monitoring costs, are expensed as incurred. |
Other Liabilities | Other Liabilities – We periodically make changes in or expand our custom processing units at the request of the customer. The cost to make these changes is shared by the customer. Upon completion of a project a note receivable and a deferred liability are recorded to recover the project costs which are then capitalized. At times instead of a note receivable being established, the customer pays an upfront cost. The amortization of other liabilities is recorded as a reduction to depreciation expense over the life of the contract with the customer. |
Net Income Per Share | Net Income Per Share – We compute basic income per common share based on the weighted-average number of common shares outstanding. Diluted income per common share is computed based on the weighted-average number of common shares outstanding plus the number of additional common shares that would have been outstanding if potential dilutive common shares, consisting of stock options, unvested restricted stock units, and shares which could be issued upon conversion of debt, had been issued (see Note 18). |
Foreign Currency | Foreign Currency – The functional currency for the Company and each of the Company's subsidiaries is the US dollar (USD). Transaction gains or losses as a result of transactions denominated and settled in currencies other than the USD are reflected in the statements of income as foreign exchange transaction gains or losses. We do not employ any practices to minimize foreign currency risks. The functional and reporting currency of AMAK is the Saudi Riyal (SR). In June 1986 the SR was officially pegged to the USD at a fixed exchange rate of 1 USD to 3.75 SR; therefore, we translate SR into our reporting currency of the USD for income statement and balance sheet purposes using the fixed exchange rate. |
Management Estimates | Management Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include allowance for doubtful accounts receivable and inventory obsolescence; assessment of impairment of our long-lived assets, goodwill, intangible assets and investments, litigation liabilities, post-retirement benefit obligations, guarantee obligations, environmental liabilities, income taxes and deferred tax valuation allowances. Actual results could differ from these estimates. |
Share-Based Compensation | Share-Based Compensation – We recognize share-based compensation of stock options granted based upon the fair value of options on the grant date using the Black-Scholes pricing model (see Note 15). Share-based compensation expense recognized during the period is based on the fair value of the portion of share-based payments awards that is ultimately expected to vest. Share-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2019 , 2018 , and 2017 includes compensation expense based on the estimated grant date fair value for awards that are ultimately expected to vest, and accordingly has been reduced for estimated forfeitures. Estimated forfeitures at the time of grant are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Guarantees | Guarantees – We may enter into agreements which contain features that meet the definition of a guarantee under FASB ASC 460 "Guarantees" (see Note 14). These arrangements create two types of obligations: a) We have a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and b) We have an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probable that one or more future events will occur, triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated. |
Fair Value | Fair Value – The carrying value of cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of variable rate long term debt and notes payable reflect recent market transactions and approximate carrying value. We used other observable inputs that would qualify as Level 2 inputs to make our assessment of the approximate fair value of our cash and cash equivalents, trade receivables, taxes receivable, accounts payable, accrued liabilities, other liabilities, notes payable and variable rate long term debt. The fair value of the derivative instruments are described below. We measure fair value by ASC Topic 820 Fair Value. ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard amends numerous accounting pronouncements but does not require any new fair value measurements of reported balances. ASC Topic 820 emphasizes that fair value, among other things, is based on exit price versus entry price, should include assumptions about risk such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. When considering the assumptions that market participants would use in pricing the asset or liability, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy prioritizes inputs used to measure fair value into three broad levels. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Derivatives | Derivatives – We record derivative instruments as either an asset or liability measured at fair value. Changes in the derivative instrument's fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument's gains and losses to offset related results on the hedged item in the income statement, to the extent effective, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. |
Income Taxes | Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized. Our estimate of the potential outcome of any uncertain tax issues is subject to management's assessment of relevant risks, facts, and circumstances existing at that time. We use a more likely than not threshold for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. To the extent that our assessment of such tax position changes, the change in estimate is recorded in the period in which the determination is made. We report tax-related interest and penalties as a component of income tax expense. On December 22, 2017, Public Law No. 115-97 known as the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA included a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. federal corporate income tax rate from a maximum of 35 percent to a flat 21 percent for tax years effective January 1, 2018. In addition the TJCA created prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. |
Reclassifications | Reclassifications – Certain reclassifications have been made to prior year balances to conform with the current year presentation. |
Subsequent Events | Subsequent Events – The Company has evaluated subsequent events through March 13, 2020 , the date that the consolidated financial statements were approved by management. |
New Accounting Pronouncements | Accounting Standards Adopted in 2019 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This update increased transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update was effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to ASC 842, Leases. ASU 2018-11 provided entities with an alternative modified transition method to elect not to recast the comparative periods presented when adopting ASC 842. The new standard provided a number of optional practical expedients in transition. The Company elected: (1) the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs and (2) the use-of-hindsight. In addition, the new standard provided practical expedients for an entity’s ongoing accounting that the Company made, such as the (1) the election for certain classes of underlying asset to not separate non-lease components from lease components and (2) the election for short-term lease recognition exemption for all leases that qualify. The Company adopted ASU 842 as of January 1, 2019, using the alternative modified transition method. 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 January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) . The amendment simplifies 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 amendment also eliminates 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 elected to early adopt this ASU on January 1, 2019. See Note 10 for a discussion of the results of our goodwill impairment testing. Recent Accounting Pronouncements 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 does not expect the adoption of this ASU to have a significant impact on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes . The amendments in this update simplify the accounting for income taxes by removing certain exceptions and clarifying certain requirements regarding franchise taxes, goodwill, consolidated tax expenses, and annual effective tax rate calculations. The ASU is effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The Company is currently assessing the impact of this ASU will have on its consolidated financial statements. |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Cash, Cash Equivalents and Short-Term Investments | Cash and cash equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Inventories | Inventories The components of inventories include mill stockpiles, precious metal doré, chemicals, and mining supplies. Inventories are stated at the lower of weighted-average cost or market. Costs of mill stockpiles inventory include labor and benefits, supplies, energy, depreciation, depletion, amortization, and other necessary costs incurred with the extraction and processing of ore. Corporate general and administrative costs are not included in inventory costs. Because it is generally impracticable to determine the minerals contained in mill stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to the mill stockpiles is based on surveyed volumes of mined material and daily production records. Expected mineral recovery rates from the mill stockpiles are determined by various metallurgical testing methods. |
Notes and Accounts Receivable | Accounts receivable We evaluate the collectability of our accounts receivable and the adequacy of the allowance for doubtful accounts based upon historical experience and any specific customer financial difficulties of which the Company becomes aware. During the years ended December 31, 2019, 2018, and 2017, we sold our concentrates and doré pursuant to sales contracts with primarily one customer. No amounts have been written off for the years ended December 31, 2019, 2018, and 2017. In addition, we determined that an allowance for doubtful accounts was not necessary at December 31, 2019 and 2018. |
Plant, Pipeline and Equipment | Property and equipment Property and equipment is carried at cost less accumulated depreciation. Expenditures for replacements and improvements are capitalized. Costs related to periodic maintenance are expensed as incurred. Depletion of the mining assets is determined using the unit-of-production method based on total estimated proven and probable reserves. Depletion and amortization using the unit-of-production method is recorded upon extraction of the ore, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over their estimated useful lives ranging from 3 to 20 years . Borrowing costs that are directly attributable to the acquisition, construction or production of assets are capitalized as part of the cost of those assets. Assets under construction are capitalized in the construction in progress account. Upon completion, the cost of the related asset is transferred to the appropriate category of property and equipment. |
Long-Lived Assets Impairment | Asset impairment We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Long-lived assets are evaluated for impairment under the two-step model. When events or circumstance suggest impairment of long-lived assets, estimated undiscounted future net cash flows are calculated using future estimated commodity prices, proven and probable reserves, and estimated net proceeds from the disposition of assets on retirement, less operating, sustaining capital, and reclamation costs. If it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. Fair value is generally determined using valuation techniques such as estimated future cash flows. Because the cash flows used to assess recoverability of our long-lived assets and measure fair value of our mining operations require us to make several estimates and assumptions that are subject to risk and uncertainty, changes in these estimates and assumptions could result in the impairment of our long-lived asset values. |
Revenue Recognition and Shipping and Handling Costs | Revenue recognition The Company adopted ASC 606, Revenues from Contracts with Customers, effective January 1, 2019, on a modified retrospective basis, applying the standards to all contracts that are not completed as such date. The Company’s revenues primary consists of sales of copper and zinc. Other than increased disclosures, the adoption of the new guidance did not have an impact on the Company’s revenue recognition. We sell our products pursuant to individual sales contracts entered into with a customer who acts as an intermediary and resells our products to end users. The Company considers each sales contract to be a single performance obligation, represented by the delivery of a series of distinct goods that are substantially the same, with the same pattern of transfer to the Company's customer. The Company concluded this as, based on the nature of its contracts, the customer receives the benefit of mineral sold as it is shipped per the terms of the commercial invoice at each delivery date. In addition, the Company considers that it has a right to consideration from its customers in an amount that corresponds directly to the value transferred to those customers that being the quantity of mineral delivered at the price per unit delivered. Accordingly, the Company recognizes revenue at the amount to which it has the right to invoice (the invoice practical expedient), as it believes that this method is a faithful depiction of the transfer of goods to its customers. Revenue is recognized when or as the performance obligations are satisfied, when the Company transfers control of the goods and title passes to the customer. Control is transferred generally upon the completion of loading the material as the point of origin. This is the point which the customer obtains legal title to the product as well as the ability to direct the use of and obtain substantially all the remaining benefits of ownership of the assets. Sales are recorded based on a provisional sales price or a final sales price calculated in accordance with the terms specified in the relevant sales contract. Under the long-established structure of sales agreements prevalent in the industry, the copper and zinc contained in concentrate is generally “provisionally” priced at the time of shipment. The provisional price received at the time of shipment is later adjusted to a “final” price based on quoted monthly average spot prices on the London Metal Exchange (LME) for a specified future month. We record revenues at the time of shipment (when title and risk of loss pass) based on then-current LME prices, and we account for any changes between the sales price recorded at the time of shipment and subsequent changes in the LME prices through the date of final pricing as gains or losses from a derivative embedded in the sales contract (a futures contract initiated at the date of shipment and settled upon the determination of the “final price”) which is bifurcated and separately accounted for at fair value. The host contract is the sale of the metals contained in the concentrates at the then-current LME price as defined in the contract. Mark-to-market price fluctuations recorded through the settlement date are reflected in revenues for sales contracts. Our embedded derivatives at December 31, 2019 and 2018, were not significant to the financial statements. Revenues from concentrate sales are recorded net of treatment and refining charges. These allowances are a negotiated term of each contract. Treatment and refining charges represent payments or price adjustments to smelters and refiners and are either fixed, or in certain cases, vary with the price of metals (referred to as price participation). |
Environmental Liabilities | Environmental costs Environmental costs are expensed or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can reasonably be estimated. Ongoing compliance costs are expensed as incurred. |
Foreign Currency | Foreign currency Our functional currency is the Saudi Riyal (SR). In June 1986, the Saudi Riyal was officially pegged to the U.S. Dollar at a fixed exchange rate of 1 U.S. Dollar to 3.75 riyals. Foreign currency transactions are translated into Saudi Riyals at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rates prevailing at that date. Any gains and losses from settlement and translation of foreign currency transactions are included in the statement of operations. |
Management Estimates | Management estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation and amortization; zakat and income taxes; environmental obligations; reclamation and closure costs; estimates of recoverable materials in mill stockpiles; fair value of embedded derivatives; end-of-service indemnities; and asset impairment, including estimates used to derive future cash flows associated with those assets. Actual results could differ from these estimates. |
Income Taxes | Zakat and income tax We are subject to the Regulations of the General Authority of Zakat and Tax (GAZT) in the Kingdom of Saudi Arabia. Under these regulations, Zakat is payable at 2.5% on the basis of the portion of our Zakat base attributable to our Saudi stockholders, and income tax is payable at 20% on the portion of our taxable income attributable to our non-Saudi stockholders. Zakat and income tax are provided on an accrual basis. Any difference in the estimate is recorded when the final assessment is approved, at which time the provision is cleared. We account for deferred income taxes on non-Saudi owners utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the income tax basis of assets and liabilities, as measured by the effective tax rate. When appropriate, we evaluate the need for a valuation allowance based on a more likely than not threshold to reduce deferred tax assets to estimated recoverable amounts. We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We report tax-related interest and penalties as a component of Zakat and income tax expense. We recognized no material adjustment for unrecognized income tax liabilities. |
Subsequent Events | Subsequent events We have evaluated events and transactions subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through March 11, 2020, the date on which the financial statements were available to be issued. |
New Accounting Pronouncements | Recent accounting pronouncements In February 2016 the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and does not expect to early adopt. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above. |
Basis of Accounting | The accompanying financial statements have been prepared using U.S. generally accepted accounting principles. |
Development costs | Development costs Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources are charged to expense as incurred. Development costs are capitalized beginning after proven and probable reserves have been established. Development costs include costs incurred in mine pre-production activities undertaken to gain access to proven and probable reserves, including shafts, drifts, ramps, permanent excavations, infrastructure and removal of overburden. These costs are deferred net of the proceeds from the sale of any production during the development period and then amortized using an estimated unit-of-production method. If a mine is no longer considered economical, the accumulated costs are charged to the statement of operations in the year in which the determination is made. |
End-of-service indemnities | End-of-service indemnities Employee end-of-service benefits are accrued for the benefit of employees under the terms and conditions of Saudi Labor Law and Regulations and their employment contracts. End-of-service indemnities are provided for and accrued in the financial statements based on the respective employees' salaries and length of service. |
Leasing arrangements | Leasing arrangements We periodically lease operating equipment, facilities, and office buildings. Rentals payable under operating leases are charged to the statements of operations on a straight-line basis over the term of the relevant lease. For any capital leases, the present value of future minimum lease payments at the inception of the lease is reflected as an asset and a liability in the balance sheet. Amounts due within one year are classified as short-term liabilities and the remaining balance as long-term liabilities. Finance charges are charged to the statement of operations. |
Asset retirement obligations and costs | Asset retirement obligations and costs We record the fair value of our estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period in which the obligation is incurred. AROs associated with long-lived assets are those for which there is a legal obligation to settle under various laws, statues, or regulations. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of revenues. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated (primarily on a unit-of-production basis) over the asset’s respective useful life. Asset retirement obligations and costs - continued Our AROs consist primarily of costs associated with mine reclamation and closure activities and are included in deferred mine closure costs on the accompanying balance sheets. At least annually, we review our ARO estimates for changes in the projected timing and changes in cost estimates and additional AROs incurred during the period. |
Fair Value Measurement | Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means; and Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
TRADE RECEIVABLES (Tables)
TRADE RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Trade Receivables, net | Trade receivables, net, at December 31, consisted of the following: 2019 2018 (thousands of dollars) Trade receivables $ 26,749 $ 27,564 Less allowance for doubtful accounts (429 ) (452 ) Trade receivables, net $ 26,320 $ 27,112 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories include the following at December 31: 2019 2018 (thousands of dollars) Raw material $ 2,100 $ 4,742 Work in process 142 173 Finished products 11,382 11,624 Total inventory $ 13,624 $ 16,539 |
INVESTMENT IN AMAK AND DISCON_2
INVESTMENT IN AMAK AND DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Discontinued Operations | Included in discontinued operations are the following for the years ending December 31: 2019 2018 2017 Saudi administration (income) expenses $ 187 $ (136 ) $ 173 Equity in losses of AMAK 986 901 4,261 Other professional expenses 1,473 — — Loss from discontinued operations before taxes 2,646 765 4,434 Tax benefit (556 ) (161 ) (931 ) Loss from discontinued operations (net of tax) $ 2,090 $ 604 $ 3,503 |
Summarized Results of Operation and Financial Position for AMAK | The summarized results of operation and financial position for AMAK are as follows: Results of Operations Years Ended December 31, 2019 2018 2017 (Thousands of Dollars) Sales $ 78,350 $ 70,234 $ 36,435 Cost of sales (69,620 ) (68,084 ) (43,304 ) Gross profit (loss) 8,730 2,150 (6,869 ) Selling, general and administrative 13,047 7,860 7,547 Operating loss (4,317 ) (5,710 ) (14,416 ) Other income 558 86 238 Finance and interest expense (1,450 ) (1,592 ) (1,628 ) Loss before Zakat and income taxes (5,209 ) (7,216 ) (15,806 ) Zakat and income taxes (1,801 ) 487 (966 ) Net loss $ (7,010 ) $ (6,729 ) $ (16,772 ) Financial Position December 31, 2019 2018 (Thousands of Dollars) Current assets $ 45,354 $ 44,093 Noncurrent assets 196,564 212,291 Total assets $ 241,918 $ 256,384 Current liabilities $ 27,645 $ 17,160 Long term liabilities 79,348 77,366 Shareholders' equity 134,925 161,858 Total liabilities and equity $ 241,918 $ 256,384 |
Equity in Income or Loss of AMAK Reflected on Consolidated Statements | The equity in the income or loss of AMAK reflected in discontinued operations for the years ended December 31, 2019 , 2018 , and 2017 , is comprised of the following: 2019 2018 2017 AMAK Net Loss $ (7,010 ) $ (6,729 ) $ (16,772 ) Company's share of loss reported by AMAK $ (2,333 ) $ (2,248 ) $ (5,608 ) Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK 1,347 1,347 1,347 Equity in loss of AMAK $ (986 ) $ (901 ) $ (4,261 ) |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets at December 31 are summarized as follows: 2019 2018 (thousands of dollars) Prepaid license $ 1,209 $ 2,419 Spare parts 1,857 1,597 Insurance receivable 1,148 — Other prepaid expenses and assets 733 648 Total $ 4,947 $ 4,664 |
PLANT, PIPELINE AND EQUIPMENT (
PLANT, PIPELINE AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Plant, Pipeline and Equipment | Plant, pipeline and equipment include the following at December 31: 2019 2018 (thousands of dollars) Platinum catalyst $ 1,580 $ 1,612 Catalyst 4,095 3,131 Land 5,428 5,428 Plant, pipeline and equipment 258,651 253,905 Construction in progress 5,052 4,343 Total plant, pipeline and equipment 274,806 268,419 Less accumulated depreciation (85,887 ) (73,762 ) Net plant, pipeline and equipment $ 188,919 $ 194,657 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease information | ($ in thousands) December 31, 2019 December 31, 2018 December 31, 2017 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 4,389 $ — $ — Operating cash flows used for finance leases — — — Financing cash flows used for finance leases — — — Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 81 $ — $ — Finance leases — — — The components of lease expense were as follows: ($ in thousands) Classification in the Consolidated Statements of Operations December 31, 2019 December 31, 2018 December 31, 2017 Operating lease cost (a) Cost of sales, exclusive of depreciation and amortization $ 4,361 $ — $ — Operating lease cost (a) Selling, general and administrative 137 — — Total operating lease cost $ 4,498 $ — $ — Finance lease cost: Amortization of right-of-use assets Depreciation — — — Interest on lease liabilities Interest Expense — — — Total finance lease cost $ — $ — $ — Total lease cost $ 4,498 $ — $ — (a) Short-term lease costs were approximately $64,000, nil and nil as of December 31, 2019, 2018 and 2017, respectively. |
Lease information | ($ in thousands) Classification on the Consolidated Balance Sheets December 31, 2019 Assets: Operating Operating lease assets $ 13,512 Finance Property, plant, and equipment — Total leased assets $ 13,512 Liabilities: Current Operating Current portion of operating lease liabilities $ 3,174 Finance Short-term debt and current portion of long-term debt — Noncurrent Operating Operating lease liabilities 10,338 Finance Long-term debt — Total lease liabilities $ 13,512 December 31, 2019 Weighted-average remaining lease term (in years): Operating leases 4.5 Finance leases 0.0 Weighted-average discount rate: Operating leases 4.5 % Finance leases — % |
Operating lease maturities | As of December 31, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 3,703 $ — 2021 3,540 — 2022 3,218 — 2023 2,329 — 2024 1,026 — Thereafter 1,082 — Total lease payments $ 14,898 $ — Less: Interest 1,386 — Total lease obligations $ 13,512 $ — |
Finance lease maturities | As of December 31, 2019 , maturities of lease liabilities were as follows: ($ in thousands) Operating Leases Finance Leases 2020 $ 3,703 $ — 2021 3,540 — 2022 3,218 — 2023 2,329 — 2024 1,026 — Thereafter 1,082 — Total lease payments $ 14,898 $ — Less: Interest 1,386 — Total lease obligations $ 13,512 $ — |
Operating leases, future minimum rental payments | 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 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Finite-Lived Intangible Assets by Major Class | The following table summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands): December 31, 2019 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (5,898 ) $ 10,954 Non-compete agreements 94 (94 ) — Licenses and permits 1,471 (601 ) 870 Developed technology 6,131 (3,219 ) 2,912 24,548 (9,812 ) 14,736 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance — — — Trade name — — — Total $ 24,548 $ (9,812 ) $ 14,736 December 31, 2018 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net 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 table summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (in thousands): December 31, 2019 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net Customer relationships $ 16,852 $ (5,898 ) $ 10,954 Non-compete agreements 94 (94 ) — Licenses and permits 1,471 (601 ) 870 Developed technology 6,131 (3,219 ) 2,912 24,548 (9,812 ) 14,736 Intangible assets not subject to amortization (Indefinite-lived) Emissions Allowance — — — Trade name — — — Total $ 24,548 $ (9,812 ) $ 14,736 December 31, 2018 Intangible assets subject to amortization (Definite-lived) Gross Accumulated Amortization Net 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 |
Schedule of Expected Future Amortization Expenses | Based on identified intangible assets that are subject to amortization as of December 31, 2019 , we expect future amortization expenses for each period to be as follows (in thousands): Total 2020 2021 2022 2023 2024 Thereafter Customer relationships $ 10,954 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 1,123 $ 5,339 Licenses and permits 870 106 101 86 86 86 405 Developed technology 2,912 613 613 613 613 460 — Total future amortization expense $ 14,736 $ 1,842 $ 1,837 $ 1,822 $ 1,822 $ 1,669 $ 5,744 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued liabilities at December 31 are summarized as follows: 2019 2018 (thousands of dollars) Accrued state taxes $ 215 $ 210 Accrued payroll 1,250 936 Accrued interest 33 31 Accrued officer compensation 1,687 — Accrued restructuring & severance expenses (Note 21) 16 1,221 Accrued foreign taxes — 802 Accrued professional expenses (Note 6) 1,000 — Other liabilities 1,539 2,239 Total $ 5,740 $ 5,439 |
LONG-TERM DEBT AND LONG-TERM _2
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Principal Payments of Long-term Debt | Principal payments of long-term debt for the next five years and thereafter ending December 31 are as follows: Year Ending December 31, Debt (thousands of dollars) 2020 $ 4,375 2021 4,375 2022 4,375 2023 70,813 Total $ 83,938 |
Long-term Debt and Long-term Obligations | Long-term debt and long-term obligations at December 31 are summarized as follows: 2019 2018 (thousands of dollars) Revolving facility $ 3,000 $ 18,000 Term loan facility 80,938 85,312 Loan fees (649 ) (830 ) Total long-term debt 83,289 102,482 Less current portion including loan fees 4,194 4,194 Total long-term debt, less current portion including loan fees $ 79,095 $ 98,288 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 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 — — Expired — — Exercised (85,000 ) 7.71 Forfeited (173,830 ) 10.10 Outstanding at December 31, 2019 487,000 $ 10.87 3.8 $ — Expected to vest — $ — 0.0 $ — Exercisable at December 31, 2019 487,000 $ 10.87 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 197,638 9.24 Forfeited (123,434 ) 10.82 Vested (181,015 ) 11.02 Outstanding at December 31, 2019 298,864 $ 9.78 Expected to vest 298,864 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for income taxes from continuing operations consisted of the following: Year ended December 31, 2019 2018 2017 (thousands of dollars) Current federal benefit $ — $ (74 ) $ (1,202 ) Current state expense 91 31 282 Deferred federal benefit (3,564 ) (813 ) (5,389 ) Deferred state expense (benefit) (93 ) 210 81 Income tax benefit $ (3,566 ) $ (646 ) $ (6,228 ) |
Schedule of Effective Income Tax Rate Reconciliation | The difference between the effective tax rate in income tax expense and the Federal statutory rate of 21% for the years ended December 31, 2019 and 2018, and 35% for the year ended December 31, 2017 , is as follows: 2019 2018 2017 (thousands of dollars) Income taxes at U.S. statutory rate $ (3,455 ) $ (661 ) $ 4,816 State taxes, net of federal benefit 256 234 235 Net operating loss carryback — — (961 ) Research and development credits (203 ) (263 ) — Permanent and other items (164 ) 44 (11 ) Deferred tax impact of US tax reform — — (10,307 ) Total tax benefit $ (3,566 ) $ (646 ) $ (6,228 ) |
Tax Effects of Temporary Differences | Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2019 2018 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (29,227 ) $ (25,169 ) Intangible assets — (1,075 ) Other assets (32 ) (40 ) Operating lease asset (2,838 ) — Investment in AMAK (302 ) (671 ) Total deferred tax liabilities $ (32,399 ) $ (26,955 ) Deferred tax assets: Net operating loss carryforward 11,685 9,073 Intangible assets 3,699 — Operating lease liability 2,838 — Stock-based compensation 1,093 954 Foreign tax credit 891 802 Accounts receivable 240 238 Mineral interests 226 226 Interest expense carryforward 211 — General business credit 140 — Inventory 111 133 Post-retirement benefits 71 79 Charitable contributions 45 — Gross deferred tax assets 21,250 11,505 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 21,024 $ 11,279 Net deferred tax liabilities $ (11,375 ) $ (15,676 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 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. Year Ended December 31, 2019 Specialty Petrochemicals Specialty Waxes Corporate Consolidated (in thousands) Net revenues $ 224,311 $ 34,648 $ — $ 258,959 Operating income (loss) before depreciation and amortization 38,860 (24,333 ) (9,190 ) 5,337 Operating income (loss) 28,304 (29,925 ) (9,242 ) (10,863 ) Income (loss) from continuing operations before taxes 23,993 (31,164 ) (9,279 ) (16,450 ) Depreciation and amortization 10,556 5,593 52 16,201 Capital expenditures 6,955 3,124 — 10,079 Year Ended December 31, 2019 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 14,736 $ — $ — $ 14,736 Total assets 289,546 88,245 90,203 (166,175 ) 301,819 Year Ended December 31, 2018 Specialty Petrochemicals Specialty Waxes Corporate Consolidated (in thousands) Net revenues $ 249,679 $ 38,253 $ — $ 287,932 Operating profit (loss) before depreciation and amortization 23,021 1,949 (8,275 ) 16,695 Operating profit (loss) 14,089 (3,427 ) (8,463 ) 2,199 Profit (loss) from continuing operations before taxes 10,705 (4,660 ) (8,419 ) (2,374 ) Depreciation and amortization 8,932 5,376 50 14,358 Capital expenditures 22,431 2,854 — 25,285 Year Ended December 31, 2018 Specialty Petrochemicals Specialty Waxes Corporate Eliminations Consolidated (in thousands) Goodwill and intangible assets, net $ — $ 40,745 $ — $ — $ 40,745 Total assets 284,367 115,366 91,474 (161,239 ) 329,968 |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Year ended December 31, 2019 2018 2017 (thousands of dollars) Net income (loss) from continuing operations $ (12,884 ) $ (1,728 ) $ 21,512 Basic income (loss) from continuing operations per common share: Weighted average shares outstanding 24,698 24,438 24,294 Per share amount (dollars) $ (0.52 ) $ (0.07 ) $ 0.89 Diluted income (loss) from continuing operations per common share: Weighted average shares outstanding 24,698 24,438 25,129 Per share amount (dollars) $ (0.52 ) $ (0.07 ) $ 0.86 Weighted average shares-denominator basic computation 24,698 24,438 24,294 Unvested restricted stock unit grant — — 367 Effect of dilutive stock options — — 468 Weighted average shares, as adjusted denominator diluted computation 24,698 24,438 25,129 Net Income per Common Share - Discontinued Operations Year ended December 31, 2019 2018 2017 (thousands of dollars) Net loss from discontinued operations $ (2,090 ) $ (604 ) $ (3,503 ) Basic income (loss) from discontinued operations per common share: Weighted average shares outstanding 24,698 24,438 24,294 Per share amount (dollars) $ (0.08 ) $ (0.02 ) $ (0.14 ) Diluted income (loss) from discontinued operations per common share: Weighted average shares outstanding 24,698 24,438 25,129 Per share amount (dollars) $ (0.08 ) $ (0.02 ) $ (0.14 ) Weighted average shares-denominator basic computation 24,698 24,438 24,294 Unvested restricted stock unit grant — — 367 Effect of dilutive stock options — — 468 Weighted average shares, as adjusted denominator diluted computation 24,698 24,438 25,129 Net Income per Common Share Year ended December 31, 2019 2018 2017 (thousands of dollars) Net income (loss) $ (14,974 ) $ (2,332 ) $ 18,009 Basic earnings (loss) per common share: Weighted average shares outstanding 24,698 24,438 24,294 Per share amount (dollars) $ (0.61 ) $ (0.10 ) $ 0.74 Diluted earnings (loss) per common share: Weighted average shares outstanding 24,698 24,438 25,129 Per share amount (dollars) $ (0.61 ) $ (0.10 ) $ 0.72 Weighted average shares-denominator basic computation 24,698 24,438 24,294 Unvested restricted stock unit grant — — 367 Effect of dilutive stock options — — 468 Weighted average shares, as adjusted denominator diluted computation 24,698 24,438 25,129 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The quarterly results of operations shown below are derived from unaudited financial statements for the eight quarters ended December 31, 2019 (in thousands, except per share data, rounding may apply): Year Ended December 31, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 65,155 $ 69,371 $ 62,715 $ 61,718 $ 258,959 Gross profit 10,073 10,565 9,567 8,310 38,515 Net income (loss) from continuing operations $ 1,797 $ 2,476 $ 1,583 $ (18,740 ) $ (12,884 ) Net income (loss) from discontinued operations, net of tax (46 ) (72 ) (1,002 ) (970 ) (2,090 ) Net income (loss) 1,751 2,404 581 (19,710 ) (14,974 ) Basic EPS (1) from continuing operations $ 0.07 $ 0.10 $ 0.06 $ (0.76 ) $ (0.52 ) Basic EPS (1) from discontinued operations — — (0.04 ) (0.04 ) (0.08 ) Basic EPS (1) 0.07 0.10 0.02 (0.80 ) (0.61 ) Diluted EPS (1) from continuing operations $ 0.07 $ 0.10 $ 0.06 $ (0.76 ) $ (0.52 ) Diluted EPS (1) from discontinued operations — — (0.04 ) (0.04 ) (0.08 ) Diluted EPS (1) 0.07 0.10 0.02 (0.80 ) (0.61 ) Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 71,741 $ 68,106 $ 73,416 $ 74,669 $ 287,932 Gross profit 10,140 8,142 6,842 2,694 27,818 Net income (loss) from continuing operations $ 2,185 $ 2,035 $ (716 ) $ (5,232 ) $ (1,728 ) Net income (loss) from discontinued operations, net of tax 167 180 (893 ) (58 ) (604 ) Net income (loss) 2,352 2,215 (1,609 ) (5,290 ) (2,332 ) Basic EPS (1) from continuing operations $ 0.09 $ 0.08 $ (0.03 ) $ (0.21 ) $ (0.07 ) Basic EPS (1) from discontinued operations 0.01 0.01 (0.04 ) — (0.02 ) Basic EPS (1) 0.10 0.09 (0.07 ) (0.22 ) (0.10 ) Diluted EPS (1) from continuing operations $ 0.09 $ 0.08 $ (0.03 ) $ (0.21 ) $ (0.07 ) Diluted EPS (1) from discontinued operations 0.01 0.01 (0.04 ) — (0.02 ) Diluted EPS (1) 0.09 0.09 (0.06 ) (0.22 ) (0.10 ) (1) Basic and diluted earnings per share are computed independently for each of the quarters presented based on the weighted average number of common shares outstanding during that period. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share. |
AMAK FINANCIAL STATEMENTS (Tabl
AMAK FINANCIAL STATEMENTS (Tables) - AMAK | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |
Balance Sheets | Balance Sheets December 31, 2019 2018 (Expressed in Saudi Riyals) ASSETS Current assets: Cash and cash equivalents 52,244,794 31,510,496 Accounts receivable 29,643,472 16,235,035 Inventories 35,277,340 45,871,120 Advances to shareholders (Note 1) 2,859,341 52,562,028 Advances to contractors and other 50,053,018 19,168,765 Total current assets 170,077,965 165,347,444 Non-current assets: Property and equipment, net 610,634,432 634,856,075 Development costs, net 121,267,664 155,281,525 Deferred mine closure costs 5,211,505 5,955,999 Total non-current assets 737,113,601 796,093,599 907,191,566 961,441,043 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities 40,418,619 28,756,945 Zakat and income tax liability 10,932,026 5,400,000 Capital lease obligation, current portion 2,318,301 193,206 Long-term debt, current portion 50,000,000 30,000,000 Total current liabilities 103,668,946 64,350,151 Non-current liabilities Provision for mine closure costs 16,625,347 16,063,136 Capital lease obligation, net of current portion 3,898,002 359,811 Long-term debt, net of current portion and deferred finance costs 267,933,847 266,258,712 End-of-service indemnities 4,880,892 3,649,889 Deferred income taxes 4,217,658 3,792,785 Total non-current liabilities 297,555,746 290,124,333 Balance Sheets - (Continued) December 31, 2019 2018 (Expressed in Saudi Riyals) Commitments and contingencies (Note 14) Shareholders' equity Share capital 820,000,000 820,000,000 Share premium (74,713,350 ) — Accumulated deficit (239,319,776 ) (213,033,441 ) Total shareholders' equity 505,966,874 606,966,559 907,191,566 961,441,043 |
Statements of Operations | Statements of Operations December 31, 2019 2018 2017 (Expressed in Saudi Riyals) Revenues 293,811,329 263,377,273 136,629,881 Costs of revenues 261,073,821 255,313,296 162,388,373 Operating income (loss) 32,737,508 8,063,977 (25,758,492 ) General and administrative expenses 48,927,307 29,475,998 28,299,733 Loss from operations (16,189,799 ) (21,412,021 ) (54,058,225 ) Other income (expense) Finance charges (5,436,532 ) (5,969,821 ) (6,103,680 ) Other income 2,091,152 323,575 893,524 (3,345,380 ) (5,646,246 ) (5,210,156 ) Loss before Zakat and income tax (19,535,179 ) (27,058,267 ) (59,268,381 ) Zakat and income tax benefit (expense) (6,751,156 ) 1,824,929 (3,627,193 ) Net loss (26,286,335 ) (25,233,338 ) (62,895,574 ) |
Statements of Changes in Shareholders' Equity | Statements of Changes in Shareholders' Equity (Expressed in Saudi Riyals) Retained Earnings Share Share Treasury (Accumulated Capital Premium Stock at cost Deficit) Total Balance at January 1, 2017 780,000,000 37,546,420 — (124,904,529 ) 692,641,891 Net loss — — — (62,895,574 ) (62,895,574 ) Balance at December 31, 2017 780,000,000 37,546,420 — (187,800,103 ) 629,746,317 Issuance of share premium — 2,453,580 — — 2,453,580 Conversion of share premium to share capital 40,000,000 (40,000,000 ) — — — Net loss — — — (25,233,338 ) (25,233,338 ) Balance at December 31, 2018 820,000,000 — — (213,033,441 ) 606,966,559 Share repurchase — — (74,713,350 ) — (74,713,350 ) Net loss — — — (26,286,335 ) (26,286,335 ) Balance at December 31, 2019 820,000,000 — (74,713,350 ) (239,319,776 ) 505,966,874 |
Statements of Cash Flows | Statements of Cash Flows December 31, 2019 2018 2017 (Expressed in Saudi Riyals) Cash flows from operating activities: Net loss (26,286,335 ) (25,233,338 ) (62,895,574 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 113,949,259 125,507,864 83,547,586 Accretion of deferred mine closure costs 562,211 543,198 524,829 Amortization of deferred finance costs 1,675,135 2,175,902 1,610,733 Gain on forgiveness of liabilities — — — Deferred income taxes 424,873 (7,224,929 ) 417,966 Changes in operating assets and liabilities: Accounts receivable (13,408,437 ) (8,021,219 ) (8,213,816 ) Inventories 10,593,780 (18,644,188 ) (11,351,752 ) Advances to contractors and other (30,884,252 ) 563,016 (3,944,995 ) Accounts payable and accrued liabilities 11,661,674 6,084,327 9,638,009 Zakat and income tax liability 5,532,026 1,883,327 1,583,048 End-of-service indemnities 1,231,003 1,131,360 1,037,893 Net cash provided by operating activities 75,050,937 78,765,320 11,953,927 Cash flows from investing activities: Additions to property and equipment (48,246,282 ) (28,945,309 ) (31,550,443 ) Statements of Cash Flows - (Continued) December 31, 2019 2018 2017 (Expressed in Saudi Riyals) Cash flows from financing activities: Issuance of share capital and premium — 2,453,580 — Payments on capital lease obligations (1,059,694 ) (72,788 ) — Repurchase of treasury stock (22,151,322 ) — — Borrowings from long-term debt 50,000,000 — — Payments on long-term debt (30,000,000 ) — (5,000,000 ) Net advances from (to) shareholders (2,859,341 ) (53,015,844 ) 403,147 Net cash provided by (used in) financing activities (6,070,357 ) (50,635,052 ) (4,596,853 ) Increase (decrease) in cash and cash equivalents 20,734,298 (815,041 ) (24,193,369 ) Cash and cash equivalents, beginning of year 31,510,496 32,325,537 56,518,906 Cash and cash equivalents, end of year 52,244,794 31,510,496 32,325,537 Supplemental cash flow information Cash paid for interest 4,428,545 3,927,778 3,686,000 Cash paid for Zakat and income tax 6,086,073 3,212,813 1,626,179 Supplemental disclosure of non-cash items Assets acquired through capital lease obligations 7,933,140 625,805 — Advances to shareholders applied to treasury stock purchase 52,562,028 — — |
AMAK ORGANIZATION AND BUSINESS
AMAK ORGANIZATION AND BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Schedule of Ownership in Joint Stock Company | As of December 31, 2019, our ownership is as follows: Shares Ownership Percentage Saudi shareholders 37,248,210 46.8 % Trecora (US Company) 26,467,422 33.3 % ARMICO (Pan Arab Organization) 15,502,500 19.5 % Other 291,418 0.4 % 79,509,550 100.00 % |
AMAK INVENTORIES (Tables)
AMAK INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory [Line Items] | |
Inventories | Inventories include the following at December 31: 2019 2018 (thousands of dollars) Raw material $ 2,100 $ 4,742 Work in process 142 173 Finished products 11,382 11,624 Total inventory $ 13,624 $ 16,539 |
AMAK | |
Inventory [Line Items] | |
Inventories | Inventories consisted of the following at: December 31, 2019 2018 Stockpile ore 18,657,218 19,134,297 Ore concentrates 6,294,948 17,020,657 Precious metal dore 4,490,589 2,159,192 Explosives 326,599 1,134,728 Chemicals and other 5,507,986 6,422,246 35,277,340 45,871,120 |
AMAK ADVANCES TO CONTRACTORS _2
AMAK ADVANCES TO CONTRACTORS AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Advances to Contractors and Other | Advances to contractors and other consisted of the following at: December 31, 2019 2018 Advances to contractors 42,672,136 15,127,502 Prepaid expenses 5,185,037 1,196,218 Other miscellaneous advances and receivables 2,195,845 2,845,045 50,053,018 19,168,765 |
AMAK PROPERTY AND EQUIPMENT (Ta
AMAK PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | Plant, pipeline and equipment include the following at December 31: 2019 2018 (thousands of dollars) Platinum catalyst $ 1,580 $ 1,612 Catalyst 4,095 3,131 Land 5,428 5,428 Plant, pipeline and equipment 258,651 253,905 Construction in progress 5,052 4,343 Total plant, pipeline and equipment 274,806 268,419 Less accumulated depreciation (85,887 ) (73,762 ) Net plant, pipeline and equipment $ 188,919 $ 194,657 |
AMAK | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | Property and equipment, net consisted of the following at: December 31, 2019 2018 Buildings 191,838,962 191,041,157 Leasehold improvements 1,838,317 1,838,317 Heavy equipment 136,066,275 118,125,568 Motor vehicles 22,467,300 22,467,300 Civil works 16,288,221 15,662,671 Tailings dam 23,900,160 23,042,594 Plant and machinery 326,974,958 324,372,695 Mining assets – rehabilitation costs 98,894,826 98,894,826 Mining assets – underground development costs 299,224,519 267,128,896 Construction in progress 4,789,313 5,106,409 1,122,282,851 1,067,680,433 Less accumulated depreciation, depletion and amortization (511,648,419 ) (432,824,358 ) 610,634,432 634,856,075 |
AMAK DEVELOPMENT COSTS (Tables)
AMAK DEVELOPMENT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Development Costs, Net | Development costs, net consisted of the following at: December 31, 2019 2018 Cost 289,973,237 289,973,237 Accumulated amortization (168,705,573 ) (134,691,712 ) 121,267,664 155,281,525 |
AMAK ACCOUNTS PAYABLE, ACCRUE_2
AMAK ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following at: December 31, 2019 2018 Accounts payable and accrued liabilities 36,571,709 27,306,933 Accrued salaries and payroll expenses 3,846,910 1,450,012 40,418,619 28,756,945 |
AMAK ZAKAT AND INCOME TAX (Tabl
AMAK ZAKAT AND INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |
Components of Income Tax Benefit (Expense) | The provision for income taxes from continuing operations consisted of the following: Year ended December 31, 2019 2018 2017 (thousands of dollars) Current federal benefit $ — $ (74 ) $ (1,202 ) Current state expense 91 31 282 Deferred federal benefit (3,564 ) (813 ) (5,389 ) Deferred state expense (benefit) (93 ) 210 81 Income tax benefit $ (3,566 ) $ (646 ) $ (6,228 ) |
Tax Effects of Temporary Differences | Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows: December 31, 2019 2018 (thousands of dollars) Deferred tax liabilities: Plant, pipeline and equipment $ (29,227 ) $ (25,169 ) Intangible assets — (1,075 ) Other assets (32 ) (40 ) Operating lease asset (2,838 ) — Investment in AMAK (302 ) (671 ) Total deferred tax liabilities $ (32,399 ) $ (26,955 ) Deferred tax assets: Net operating loss carryforward 11,685 9,073 Intangible assets 3,699 — Operating lease liability 2,838 — Stock-based compensation 1,093 954 Foreign tax credit 891 802 Accounts receivable 240 238 Mineral interests 226 226 Interest expense carryforward 211 — General business credit 140 — Inventory 111 133 Post-retirement benefits 71 79 Charitable contributions 45 — Gross deferred tax assets 21,250 11,505 Valuation allowance (226 ) (226 ) Total net deferred tax assets $ 21,024 $ 11,279 Net deferred tax liabilities $ (11,375 ) $ (15,676 ) |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Components of Income Tax Benefit (Expense) | The components of Zakat and income tax expense (benefit) are as follows: Years ended December 31, 2019 2018 2017 Deferred income tax benefit 1,737,276 (12,961,569 ) (8,617,706 ) Change in valuation allowance (1,312,403 ) 5,736,640 9,035,670 Current Zakat and income tax expense 6,326,283 5,400,000 3,209,229 Zakat and income tax expense (benefit) 6,751,156 (1,824,929 ) 3,627,193 |
Tax Effects of Temporary Differences | Tax effects of temporary differences that give rise to significant portions of non-Saudi owners deferred tax assets and deferred tax liabilities were as follows: December 31, 2019 2018 Deferred tax assets: Loss carryforward 41,293,547 42,193,939 Other 799,526 656,819 42,093,073 42,850,758 Deferred tax liabilities: Property and Equipment (8,785,642 ) (7,806,051 ) Net deferred tax asset 33,307,431 35,044,707 Valuation allowance (37,525,089 ) (38,837,492 ) Net deferred tax liability (4,217,658 ) (3,792,785 ) |
AMAK LONG-TERM DEBT (Tables)
AMAK LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Instrument [Line Items] | |
Repayment Schedule | Principal payments of long-term debt for the next five years and thereafter ending December 31 are as follows: Year Ending December 31, Debt (thousands of dollars) 2020 $ 4,375 2021 4,375 2022 4,375 2023 70,813 Total $ 83,938 |
AMAK | |
Debt Instrument [Line Items] | |
Summary of Long-Term Debts | Long-term debts are summarized as follows at: December 31, 2019 2018 SIDF 275,000,000 305,000,000 BSF 50,000,000 — Deferred finance charges (7,066,153 ) (8,741,288 ) Total debt 317,933,847 296,258,712 Less current portion 50,000,000 30,000,000 Total long-term debt, less current portion 267,933,847 266,258,712 |
Repayment Schedule | The repayment schedule is as follows: Years Ending December 31, 2020 50,000,000 2021 76,666,668 2022 76,666,668 2023 86,666,664 2024 35,000,000 325,000,000 |
AMAK END-OF-SERVICE INDEMNITI_2
AMAK END-OF-SERVICE INDEMNITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Change in End-of-Service Indemnities Provision | The change in the end-of-service indemnities provision is as follows: Years Ended December 31, 2019 2018 Balance, beginning of year 3,649,889 2,518,529 Provision for the year 2,208,156 1,347,418 Paid during the year (977,153 ) (216,058 ) Balance, end of year 4,880,892 3,649,889 |
AMAK ASSET RETIREMENT OBLIGAT_2
AMAK ASSET RETIREMENT OBLIGATIONS (Tables) - AMAK | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |
Deferred Mine Closure Costs | Deferred mine closure costs consisted of the following at: December 31, 2019 2018 Cost 12,842,625 12,842,625 Accumulated amortization (7,631,120 ) (6,886,626 ) 5,211,505 5,955,999 |
Summary of Changes in Provision for Mine Closure Costs | A summary of changes in our provision for mine closure costs is as follows: Years Ended December 31, 2019 2018 2017 Balance, beginning of year 16,063,136 15,519,938 14,995,109 Accretion expense 562,211 543,198 524,829 Balance, end of year 16,625,347 16,063,136 15,519,938 |
AMAK GENERAL AND ADMINISTRATI_2
AMAK GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
AMAK | |
Schedule of Equity Method Investments [Line Items] | |
Summary of General and Administrative Expenses | A summary of general and administrative expenses is as follows: Years Ended December 31, 2019 2018 2017 Wages, salaries and related costs 37,273,010 17,036,965 14,837,901 Mine closure and environmental 1,306,705 1,287,698 1,641,580 Office expenses 8,831,910 9,287,218 6,589,090 Travel and accommodation 27,182 593,046 2,958,938 Professional fees 1,488,500 1,271,071 2,272,224 48,927,307 29,475,998 28,299,733 |
AMAK COMMITMENTS AND CONTINGE_2
AMAK COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Loss Contingencies [Line Items] | |
Operating leases, future minimum rental payments | 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 |
AMAK | |
Loss Contingencies [Line Items] | |
Operating leases, future minimum rental payments | Years Ending December 31, 2020 990,000 2021 990,000 2022 990,000 2023 550,000 2024 550,000 Thereafter 1,100,000 5,170,000 |
Schedule of Future Minimum Lease Payments for Capital Leases | 2020 2,894,906 2021 2,791,921 2022 1,482,543 Total minimum lease payments 7,169,370 Less deferred financial charges (953,067 ) Total capital lease obligations 6,216,303 Less: current portion of capital lease obligations 2,318,301 Total long term portion, net current portion 3,898,002 |
BUSINESS AND OPERATIONS OF TH_2
BUSINESS AND OPERATIONS OF THE COMPANY (Details) | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 29, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 30, 2018 |
AMAK | ||||||
Noncontrolling Interest [Line Items] | ||||||
Ownership percentage | 33.30% | 33.30% | 33.40% | 33.40% | 33.41% | 33.44% |
PEVM | ||||||
Noncontrolling Interest [Line Items] | ||||||
Ownership percentage | 55.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)ر.س / $ | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |||
Increase in allowance for doubtful accounts | $ (23,000) | $ 152,000 | $ 0 |
Receivable write-offs | 0 | 0 | 0 |
Notes receivable | $ 0 | 0 | |
Employer percent of match | 100.00% | ||
Employer percent match of gross pay | 6.00% | ||
Vesting period under 401(k) plan | 2 years | ||
Matching contributions on behalf of employees | $ 1,321,000 | 1,502,000 | 1,412,000 |
Reduction in depreciation expense due to amortization of capitalize liability | $ 792,000 | $ 787,000 | $ 840,000 |
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 |
CONCENTRATIONS OF REVENUES AN_2
CONCENTRATIONS OF REVENUES AND CREDIT RISK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||
Accounts receivable | $ 26,320,000 | $ 27,112,000 | |
Amount owed to supplier for feedstock purchases | 4,500,000 | $ 4,700,000 | |
FDIC insured amount | $ 250,000 | ||
Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 15.00% | 13.50% | 16.80% |
Revenue | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 21.90% | 25.50% | 22.00% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Accounts receivable | $ 4,900,000 | $ 11,000,000 |
TRADE RECEIVABLES (Details)
TRADE RECEIVABLES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Trade receivables | $ 26,749 | $ 27,564 |
Less allowance for doubtful accounts | (429) | (452) |
Trade receivables, net | $ 26,320 | $ 27,112 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 2,100 | $ 4,742 |
Work in process | 142 | 173 |
Finished products | 11,382 | 11,624 |
Total inventory | 13,624 | 16,539 |
Inventory products in transit | $ 2,900 | $ 4,100 |
INVESTMENT IN AMAK AND DISCON_3
INVESTMENT IN AMAK AND DISCONTINUED OPERATIONS (Details) $ in Thousands, ر.س in Millions | Oct. 02, 2019USD ($) | Oct. 02, 2019SAR (ر.س) | Jun. 30, 2019shares | Mar. 31, 2018shares | Dec. 31, 2019USD ($)ر.س / $ | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | Jun. 29, 2019 | Mar. 30, 2018 |
Schedule of Equity Method Investments [Line Items] | |||||||||
Investment in AMAK (held-for-sale) (Note 6) | $ 32,872 | $ 38,746 | |||||||
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 | ||||||||
Results of Operations [Abstract] | |||||||||
Operating income (loss) | $ (10,863) | 2,199 | $ 18,275 | ||||||
AMAK | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Investment in AMAK (held-for-sale) (Note 6) | $ 32,872 | 38,700 | |||||||
Amount of investment sold | $ 70,000 | ر.س 264.7 | |||||||
Non-refundable deposit of amount sold, percentage | 5.00% | 5.00% | |||||||
Proceeds from sale of investment | $ 3,500 | ||||||||
Amount of non-refundable deposit forfeited after long stop date, percentage | 50.00% | 50.00% | |||||||
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 | ||||||||
Results of Operations [Abstract] | |||||||||
Sales | $ 78,350 | 70,234 | 36,435 | ||||||
Cost of sales | (69,620) | (68,084) | (43,304) | ||||||
Gross profit (loss) | 8,730 | 2,150 | (6,869) | ||||||
Selling, general and administrative | 13,047 | 7,860 | 7,547 | ||||||
Operating income (loss) | (4,317) | (5,710) | (14,416) | ||||||
Other income | 558 | 86 | 238 | ||||||
Finance and interest expense | (1,450) | (1,592) | (1,628) | ||||||
Loss before Zakat and income taxes | (5,209) | (7,216) | (15,806) | ||||||
Zakat and income taxes | (1,801) | 487 | (966) | ||||||
Net loss | (7,010) | (6,729) | (16,772) | ||||||
Equity Method Investment, Summarized Financial Information [Abstract] | |||||||||
Current assets | 45,354 | 44,093 | |||||||
Noncurrent assets | 196,564 | 212,291 | |||||||
Total assets | 241,918 | 256,384 | |||||||
Current liabilities | 27,645 | 17,160 | |||||||
Long term liabilities | 79,348 | 77,366 | |||||||
Shareholders' equity | 134,925 | 161,858 | |||||||
Total liabilities and equity | 241,918 | 256,384 | |||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | |||||||||
AMAK Net Loss | (7,010) | (6,729) | (16,772) | ||||||
Company's share of loss reported by AMAK | (2,333) | (2,248) | (5,608) | ||||||
Amortization of difference between Company's investment in AMAK and Company's share of net assets of AMAK | 1,347 | 1,347 | 1,347 | ||||||
Equity in loss of AMAK | (986) | $ (901) | $ (4,261) | ||||||
Gain upon formation of AMAK | 16,200 | ||||||||
Stock exchanged during period (in shares) | shares | 24,489 | 24,489 | |||||||
Return on investment | 1,300 | ||||||||
Amount receivable for unreimbursed travel expenses | $ 30 | $ 30 | |||||||
AMAK | Chief Executive Officer | |||||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | |||||||||
Share-based compensation (in shares) | shares | 100,000 | ||||||||
Treasury Stock | |||||||||
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation [Abstract] | |||||||||
Stock exchanged during period (in shares) | shares | 65,000 | 65,000 | |||||||
AMAK | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership percentage | 33.30% | 33.41% | 33.30% | 33.40% | 33.40% | 33.44% |
INVESTMENT IN AMAK AND DISCON_4
INVESTMENT IN AMAK AND DISCONTINUED OPERATIONS INVESTMENT IN AMAK AND DISCONTINUED OPERATIONS - Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Loss from discontinued operations (net of tax) | $ 970 | $ 1,002 | $ 72 | $ 46 | $ 58 | $ 893 | $ (180) | $ (167) | $ 2,090 | $ 604 | $ 3,503 |
Discontinued Operations, Disposed of by Sale | Investment In Al Masane Al Kobra Mining Company (AMAK) | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Saudi administration (income) expenses | 187 | (136) | 173 | ||||||||
Equity in losses of AMAK | 986 | 901 | 4,261 | ||||||||
Other professional expenses | 1,473 | 0 | 0 | ||||||||
Loss from discontinued operations before taxes | 2,646 | 765 | 4,434 | ||||||||
Tax benefit | (556) | (161) | (931) | ||||||||
Loss from discontinued operations (net of tax) | $ 2,090 | $ 604 | $ 3,503 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid license | $ 1,209 | $ 2,419 |
Spare parts | 1,857 | 1,597 |
Insurance receivable | 1,148 | 0 |
Other prepaid expenses and assets | 733 | 648 |
Total | $ 4,947 | $ 4,664 |
PLANT, PIPELINE AND EQUIPMENT_2
PLANT, PIPELINE AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | $ 274,806 | $ 268,419 | |
Less accumulated depreciation | (85,887) | (73,762) | |
PLANT, PIPELINE, AND EQUIPMENT, NET (Note 8) | 188,919 | 194,657 | |
Interest capitalized for construction | 0 | 731 | $ 937 |
Capitalized labor costs | 15 | 2,307 | 4,344 |
Amortization included in cost of sales | 1,312 | 59 | $ 25 |
Platinum catalyst | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 1,580 | 1,612 | |
Catalyst | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 4,095 | 3,131 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 5,428 | 5,428 | |
Plant, pipeline and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | 258,651 | 253,905 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total plant, pipeline and equipment | $ 5,052 | $ 4,343 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Total operating lease cost | $ 4,498,000 |
Total lease cost | 4,498,000 |
Short-term lease costs | 64,000 |
Variable lease costs | 0 |
Cost of sales, exclusive of depreciation and amortization | |
Lessee, Lease, Description [Line Items] | |
Total operating lease cost | 4,361,000 |
Selling, general and administrative | |
Lessee, Lease, Description [Line Items] | |
Total operating lease cost | $ 137,000 |
LEASES - Balance Sheet Classifi
LEASES - Balance Sheet Classifications (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating | $ 13,512 |
Finance | 0 |
Total leased assets | 13,512 |
Current portion of operating lease liabilities | 3,174 |
Operating lease liabilities | 10,338 |
Total lease liabilities | $ 13,512 |
LEASES - Cash Flow Classificati
LEASES - Cash Flow Classifications (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows used for operating leases | $ 4,389 |
Right-of-use assets obtained in exchange for lease obligations, Operating leases | $ 81 |
LEASES - Terms and Discount Rat
LEASES - Terms and Discount Rates (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term, Operating leases | 4 years 5 months 27 days |
Weighted-average discount rate, Operating leases | 4.50% |
LEASES - Maturities (Details)
LEASES - Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2020 | $ 3,703 | |
2021 | 3,540 | |
2022 | 3,218 | |
2023 | 2,329 | |
2024 | 1,026 | |
Thereafter | 1,082 | |
Total lease payments | 14,898 | |
Less: Interest | 1,386 | |
Total lease obligations | $ 13,512 | |
Operating Leases | ||
2019 | $ 3,670 | |
2020 | 3,583 | |
2021 | 3,418 | |
2022 | 3,107 | |
2023 | 2,288 | |
Thereafter | $ 2,065 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
GOODWILL (Note 10) | $ 0 | $ 0 | $ 21,798 | |
Intangible assets subject to amortization (Definite-lived) | ||||
Intangible assets subject to amortization, Gross | 24,548 | 24,548 | 24,548 | |
Accumulated Amortization | (9,812) | (9,812) | (7,956) | |
Intangible assets subject to amortization, Net | 14,736 | 14,736 | 16,592 | |
Intangible assets not subject to amortization (Indefinite-lived) | ||||
Total, Gross | 24,548 | 24,548 | 26,903 | |
Total, Net | 14,736 | 14,736 | 18,947 | |
Impairment of intangible assets | 2,400 | |||
Amortization of intangible assets | 1,856 | 1,861 | $ 1,861 | |
Emissions Allowance | ||||
Intangible assets not subject to amortization (Indefinite-lived) | ||||
Intangible assets not subject to amortization, Net | 0 | 0 | 197 | |
Trade name | ||||
Intangible assets not subject to amortization (Indefinite-lived) | ||||
Intangible assets not subject to amortization, Net | 0 | 0 | 2,158 | |
Customer relationships | ||||
Intangible assets subject to amortization (Definite-lived) | ||||
Intangible assets subject to amortization, Gross | 16,852 | 16,852 | 16,852 | |
Accumulated Amortization | (5,898) | (5,898) | (4,775) | |
Intangible assets subject to amortization, Net | 10,954 | 10,954 | 12,077 | |
Non-compete agreements | ||||
Intangible assets subject to amortization (Definite-lived) | ||||
Intangible assets subject to amortization, Gross | 94 | 94 | 94 | |
Accumulated Amortization | (94) | (94) | (80) | |
Intangible assets subject to amortization, Net | 0 | 0 | 14 | |
Licenses and permits | ||||
Intangible assets subject to amortization (Definite-lived) | ||||
Intangible assets subject to amortization, Gross | 1,471 | 1,471 | 1,471 | |
Accumulated Amortization | (601) | (601) | (495) | |
Intangible assets subject to amortization, Net | 870 | 870 | 976 | |
Developed technology | ||||
Intangible assets subject to amortization (Definite-lived) | ||||
Intangible assets subject to amortization, Gross | 6,131 | 6,131 | 6,131 | |
Accumulated Amortization | (3,219) | (3,219) | (2,606) | |
Intangible assets subject to amortization, Net | $ 2,912 | $ 2,912 | $ 3,525 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Expected Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Net | $ 14,736 | $ 16,592 |
2020 | 1,842 | |
2021 | 1,837 | |
2022 | 1,822 | |
2023 | 1,822 | |
2024 | 1,669 | |
Thereafter | 5,744 | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Net | 10,954 | 12,077 |
2020 | 1,123 | |
2021 | 1,123 | |
2022 | 1,123 | |
2023 | 1,123 | |
2024 | 1,123 | |
Thereafter | 5,339 | |
Licenses and permits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Net | 870 | 976 |
2020 | 106 | |
2021 | 101 | |
2022 | 86 | |
2023 | 86 | |
2024 | 86 | |
Thereafter | 405 | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Net | 2,912 | $ 3,525 |
2020 | 613 | |
2021 | 613 | |
2022 | 613 | |
2023 | 613 | |
2024 | 460 | |
Thereafter | $ 0 |
MINERAL PROPERTIES IN THE UNI_2
MINERAL PROPERTIES IN THE UNITED STATES (Details) | 12 Months Ended |
Dec. 31, 2019aClaim | |
Mineral Industries Disclosures [Abstract] | |
Number of patented mining claims in which PEVM has undivided interest | 48 |
Number of unpatented mining claims in which PEVM has undivided interest | 5 |
Area under patented and unpatented mining claims | a | 1,500 |
Period when the property is unused | 35 years |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities [Abstract] | ||
Accrued state taxes | $ 215 | $ 210 |
Accrued payroll | 1,250 | 936 |
Accrued interest | 33 | 31 |
Accrued officer compensation | 1,687 | 0 |
Accrued restructuring & severance expenses (Note 21) | 16 | 1,221 |
Accrued foreign taxes | 0 | 802 |
Accrued professional expenses (Note 6) | 1,000 | 0 |
Other liabilities | 1,539 | 2,239 |
Total | $ 5,740 | $ 5,439 |
LONG-TERM DEBT AND LONG-TERM _3
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS - Additional Information (Details) | Jul. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 30, 2018USD ($) | Oct. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||||
Outstanding debt | $ 83,289,000 | $ 102,482,000 | |||
Debt issuance costs | 649,000 | 830,000 | |||
ARC Agreement | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | 300,000 | ||||
ARC Agreement | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Revolving commitments | $ 40,000,000 | ||||
ARC Agreement, Fourth Amendment | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 900,000 | ||||
ARC Agreement, Fourth Amendment | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Revolving commitments | $ 75,000,000 | ||||
Borrowed funds under the agreement | 3,000,000 | ||||
Available borrowings | $ 50,000,000 | ||||
Effective interest rate | 4.56% | ||||
ARC Agreement, Fourth Amendment | TOCCO | |||||
Debt Instrument [Line Items] | |||||
Consolidated leverage ratio, minimum required | 3.50 | ||||
Consolidated leverage ratio | 2.2 | 4.03 | |||
Consolidated fixed charge coverage ratio, minimum required | 1.15 | ||||
ARC Agreement, Fourth Amendment | Minimum | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Commitment fee | 0.20% | ||||
ARC Agreement, Fourth Amendment | Minimum | TOCCO | |||||
Debt Instrument [Line Items] | |||||
Consolidated fixed charge coverage ratio | 2.56 | 1.29 | |||
ARC Agreement, Fourth Amendment | Minimum | LIBOR | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.25% | ||||
ARC Agreement, Fourth Amendment | Minimum | Base Rate | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.25% | ||||
ARC Agreement, Fourth Amendment | Maximum | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Commitment fee | 0.375% | ||||
ARC Agreement, Fourth Amendment | Maximum | LIBOR | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.50% | ||||
ARC Agreement, Fourth Amendment | Maximum | Base Rate | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.50% | ||||
Single Advance Term Loan | ARC Agreement | |||||
Debt Instrument [Line Items] | |||||
Aggregate amount | 70,000,000 | ||||
Multiple Advance Term Loan | ARC Agreement | |||||
Debt Instrument [Line Items] | |||||
Aggregate amount | $ 25 | ||||
Term Loan | ARC Agreement | |||||
Debt Instrument [Line Items] | |||||
Outstanding debt | $ 60,400,000 | ||||
Term Loan | ARC Agreement, Fourth Amendment | |||||
Debt Instrument [Line Items] | |||||
Aggregate amount | $ 87,500,000 | ||||
Outstanding debt | $ 80,900,000 | ||||
Optional increase in borrowing capacity | $ 50,000,000 |
LONG-TERM DEBT AND LONG-TERM _4
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS - Principal Payments of Long-term Debt (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 4,375 |
2021 | 4,375 |
2022 | 4,375 |
2023 | 70,813 |
Total debt | $ 83,938 |
LONG-TERM DEBT AND LONG-TERM _5
LONG-TERM DEBT AND LONG-TERM OBLIGATIONS - Components of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 30, 2018 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 83,938 | ||
Loan fees | 649 | $ 830 | |
Total debt | 83,289 | 102,482 | |
Less current portion | 4,194 | 4,194 | |
Total long-term debt, less current portion | 79,095 | 98,288 | |
ARC Agreement, Fourth Amendment | |||
Debt Instrument [Line Items] | |||
Loan fees | 900 | ||
ARC Agreement | |||
Debt Instrument [Line Items] | |||
Loan fees | 300 | ||
Term Loan | ARC Agreement, Fourth Amendment | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 80,938 | 85,312 | |
Total debt | 80,900 | ||
Term Loan | ARC Agreement | |||
Debt Instrument [Line Items] | |||
Total debt | $ 60,400 | ||
Revolving Credit Facility | ARC Agreement, Fourth Amendment | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 3,000 | $ 18,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019SAR (ر.س) | Oct. 24, 2010USD ($) | Oct. 24, 2010SAR (ر.س) | |
Guarantor Obligations [Line Items] | ||||||
Undelivered feedstock | $ 3,500,000 | $ 3,900,000 | ||||
Mine closure and environmental | 868,000 | $ 745,000 | $ 593,000 | |||
Saudi Industrial Development Fund Limited Guarantee | ||||||
Guarantor Obligations [Line Items] | ||||||
Loan guarantee | 41.00% | 41.00% | ||||
Principal amount of loan guaranteed | $ 88,000,000 | ر.س 330,000,000.0 | ||||
Amount of maximum exposure | $ 73,300,000 | ر.س 275,000,000 | $ 36,100,000 | ر.س 135,300,000 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2012 | Jul. 31, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation | $ 1,250,000 | $ 1,753,000 | $ 2,707,000 | ||
Share-based compensation reclassified | 311,000 | $ 300,000 | |||
Stock Option Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for issuance (in shares) | 1,000,000 | ||||
Unrecognized compensation costs related to non-vested share-based compensation | $ 0 | ||||
Stock Option Plans | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of expiration period | 10 years | ||||
Granted (in shares) | 0 | ||||
Weighted average grant date fair value (in dollars per share) | $ 0 | $ 0 | $ 0 | ||
Proceeds from stock options exercised | $ 0 | $ 912,000 | $ 25,000 | ||
Shares issued upon option and warrant exercise (in shares) | 11,000 | ||||
Stock Option Plans | Stock Options and Warrants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issued during the period (in shares) | 0 | 0 | 0 | ||
Intrinsic value of options and warrants exercised | $ 141,000 | $ 2,630,000 | $ 164,000 | ||
Exercised in period (in shares) | 85,000 | ||||
Stock Option Plans | Mr. Hatem El Khalidi | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation reclassified | $ 680,000 | ||||
Stock Option Plans | Common Stock | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options in the money (in shares) | 100,000 | ||||
The Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for issuance (in shares) | 2,500,000 | ||||
The Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs related to non-vested restricted share-based compensation | $ 1,500,000 | ||||
Weighted average period compensation cost expected to be recognized | 1 year 9 months 24 days | ||||
Minimum | Stock Option Plans | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Minimum | The Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 2 years 6 months | ||||
Maximum | Stock Option Plans | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Maximum | The Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Options and Warrant Awards (Details) - Stock Options and Warrants - Stock Option Plans - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2019 | |
Stock Options and Warrants | ||
Outstanding at beginning of period (in shares) | 745,830 | |
Granted (in shares) | 0 | |
Expired (in shares) | 0 | |
Exercised (in shares) | (85,000) | |
Forfeited (in shares) | (173,830) | |
Outstanding at end of period (in shares) | 487,000 | |
Expected to vest (in shares) | 0 | |
Exercisable (in shares) | 487,000 | |
Weighted Average Exercise Price Per Share | ||
Outstanding, beginning of period (in dollars per share) | $ 10.33 | |
Granted (in dollars per share) | 0 | |
Expired (in dollars per share) | 0 | |
Exercised (in dollars per share) | 7.71 | |
Forfeited (in dollars per share) | 10.10 | |
Outstanding, end of period (in dollars per share) | 10.87 | |
Expected to vest (in dollars per share) | 0 | |
Exercisable (in dollars per share) | $ 10.87 | |
Weighted Average Remaining Contractual Life | ||
Outstanding, contractual life | 3 years 9 months 6 days | |
Expected to vest, contractual life | 0 days | |
Exercisable, contractual life | 3 years 9 months 6 days | |
Intrinsic Value | ||
Outstanding, intrinsic value | $ 0 | |
Expected to vest, intrinsic value | 0 | |
Exercisable, intrinsic value | $ 0 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock and Restricted Stock Unit Awards (Details) - The Plan - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Shares of Restricted Stock Units | |
Outstanding, beginning of period (in shares) | 405,675 |
Granted (in shares) | 197,638 |
Forfeited (in shares) | (123,434) |
Vested (in shares) | (181,015) |
Outstanding, end of period (in shares) | 298,864 |
Expected to vest (in shares) | 298,864 |
Weighted Average Grant Date Price per Share | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 11.27 |
Granted (in dollars per share) | $ / shares | 9.24 |
Forfeited (in dollars per share) | $ / shares | 10.82 |
Vested (in dollars per share) | $ / shares | 11.02 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 9.78 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Current federal benefit | $ 0 | $ (74,000) | $ (1,202,000) |
Current state expense | 91,000 | 31,000 | 282,000 |
Deferred federal benefit | (3,564,000) | (813,000) | (5,389,000) |
Deferred state expense (benefit) | (93,000) | 210,000 | 81,000 |
Zakat and income tax expense (benefit) | (3,566,000) | (646,000) | (6,228,000) |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income taxes at U.S. statutory rate | (3,455,000) | (661,000) | 4,816,000 |
State taxes, net of federal benefit | 256,000 | 234,000 | 235,000 |
Net operating loss carryback | 0 | 0 | (961,000) |
Research and development credits | (203,000) | (263,000) | 0 |
Permanent and other items | (164,000) | 44,000 | (11,000) |
Deferred tax impact of US tax reform | 0 | 0 | (10,307,000) |
Zakat and income tax expense (benefit) | (3,566,000) | (646,000) | $ (6,228,000) |
Deferred tax liabilities: | |||
Plant, pipeline and equipment | (29,227,000) | (25,169,000) | |
Intangible assets | 0 | (1,075,000) | |
Other assets | (32,000) | (40,000) | |
Operating lease asset | (2,838,000) | ||
Investment in AMAK | (302,000) | (671,000) | |
Total deferred tax liabilities | (32,399,000) | (26,955,000) | |
Deferred tax assets: | |||
Net operating loss carryforward | 11,685,000 | 9,073,000 | |
Intangible assets | 3,699,000 | 0 | |
Operating lease liability | 2,838,000 | ||
Stock-based compensation | 1,093,000 | 954,000 | |
Foreign tax credit | 891,000 | 802,000 | |
Accounts receivable | 240,000 | 238,000 | |
Mineral interests | 226,000 | 226,000 | |
Interest expense carryforward | 211,000 | 0 | |
General business credit | 140,000 | 0 | |
Inventory | 111,000 | 133,000 | |
Post-retirement benefits | 71,000 | 79,000 | |
Charitable contributions | 45,000 | 0 | |
Gross deferred tax assets | 21,250,000 | 11,505,000 | |
Valuation allowance | (226,000) | (226,000) | |
Total net deferred tax assets | 21,024,000 | 11,279,000 | |
Net deferred tax liabilities | (11,375,000) | (15,676,000) | |
Net operating loss carryforwards | 56,600,000 | 43,200,000 | |
Interest or penalties related to uncertain tax positions | $ 0 | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | Segment | 2 | ||||||||||
Net revenues | $ 61,718 | $ 62,715 | $ 69,371 | $ 65,155 | $ 74,669 | $ 73,416 | $ 68,106 | $ 71,741 | $ 258,959 | $ 287,932 | $ 245,143 |
Operating income (loss) before depreciation and amortization | 5,337 | 16,695 | |||||||||
Operating income (loss) | (10,863) | 2,199 | 18,275 | ||||||||
Income (loss) from continuing operations before taxes | (16,450) | (2,374) | $ 15,284 | ||||||||
Depreciation and amortization | 16,201 | 14,358 | |||||||||
Capital expenditures | 10,079 | 25,285 | |||||||||
Goodwill and intangible assets, net | 14,736 | 40,745 | 14,736 | 40,745 | |||||||
Total assets | 301,819 | 329,968 | 301,819 | 329,968 | |||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 0 | 0 | |||||||||
Operating income (loss) before depreciation and amortization | (9,190) | (8,275) | |||||||||
Operating income (loss) | (9,242) | (8,463) | |||||||||
Income (loss) from continuing operations before taxes | (9,279) | (8,419) | |||||||||
Depreciation and amortization | 52 | 50 | |||||||||
Capital expenditures | 0 | 0 | |||||||||
Goodwill and intangible assets, net | 0 | 0 | 0 | 0 | |||||||
Total assets | 90,203 | 91,474 | 90,203 | 91,474 | |||||||
Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill and intangible assets, net | 0 | 0 | 0 | 0 | |||||||
Total assets | (166,175) | (161,239) | (166,175) | (161,239) | |||||||
Specialty Petrochemicals | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 224,311 | 249,679 | |||||||||
Operating income (loss) before depreciation and amortization | 38,860 | 23,021 | |||||||||
Operating income (loss) | 28,304 | 14,089 | |||||||||
Income (loss) from continuing operations before taxes | 23,993 | 10,705 | |||||||||
Depreciation and amortization | 10,556 | 8,932 | |||||||||
Capital expenditures | 6,955 | 22,431 | |||||||||
Goodwill and intangible assets, net | 0 | 0 | 0 | 0 | |||||||
Total assets | 289,546 | 284,367 | 289,546 | 284,367 | |||||||
Specialty Waxes | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 34,648 | 38,253 | |||||||||
Operating income (loss) before depreciation and amortization | (24,333) | 1,949 | |||||||||
Operating income (loss) | (29,925) | (3,427) | |||||||||
Income (loss) from continuing operations before taxes | (31,164) | (4,660) | |||||||||
Depreciation and amortization | 5,593 | 5,376 | |||||||||
Capital expenditures | 3,124 | 2,854 | |||||||||
Goodwill and intangible assets, net | 14,736 | 40,745 | 14,736 | 40,745 | |||||||
Total assets | $ 88,245 | $ 115,366 | $ 88,245 | $ 115,366 |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net income (loss) from continuing operations | $ (12,884) | $ (1,728) | $ 21,512 | ||||||||
Net loss from discontinued operations | (2,090) | (604) | (3,503) | ||||||||
Net income (loss) | $ (14,974) | $ (2,332) | $ 18,009 | ||||||||
Basic income (loss) per common share | |||||||||||
Weighted average shares outstanding (in shares) | 24,698,000 | 24,438,000 | 24,294,000 | ||||||||
Basic earnings (loss) per share, continuing operations (in dollars per share) | $ (0.76) | $ 0.06 | $ 0.10 | $ 0.07 | $ (0.21) | $ (0.03) | $ 0.08 | $ 0.09 | $ (0.52) | $ (0.07) | $ 0.89 |
Basic earnings (loss) per share, discontinued operations (in dollars per share) | (0.04) | (0.04) | 0 | 0 | 0 | (0.04) | 0.01 | 0.01 | (0.08) | (0.02) | (0.14) |
Basic earnings (loss) per share (in dollars per share) | (0.80) | 0.02 | 0.10 | 0.07 | (0.22) | (0.07) | 0.09 | 0.10 | $ (0.61) | $ (0.10) | $ 0.74 |
Diluted income (loss) per common share: | |||||||||||
Weighted average shares outstanding (in shares) | 24,698,000 | 24,438,000 | 25,129,000 | ||||||||
Diluted earnings (loss) per share, continuing operations (in dollars per share) | (0.76) | 0.06 | 0.10 | 0.07 | (0.21) | (0.03) | 0.08 | 0.09 | $ (0.52) | $ (0.07) | $ 0.86 |
Diluted earnings (loss) per share, discontinued operations (in dollars per share) | (0.04) | (0.04) | 0 | 0 | 0 | (0.04) | 0.01 | 0.01 | (0.08) | (0.02) | (0.14) |
Diluted earnings (loss) per share (in dollars per share) | $ (0.80) | $ 0.02 | $ 0.10 | $ 0.07 | $ (0.22) | $ (0.06) | $ 0.09 | $ 0.09 | $ (0.61) | $ (0.10) | $ 0.72 |
Unvested restricted stock unit grant (in shares) | 0 | 0 | 367,000 | ||||||||
Effect of dilutive stock options (in shares) | 0 | 0 | 468,000 | ||||||||
Weighted average shares outstanding, diluted (in shares) | 24,698,000 | 24,438,000 | 25,129,000 | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Potential common stock shares issuable (in shares) | 487,000 | 745,830 | 1,323,587 | ||||||||
Stock Options | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Potential common stock shares issuable (in shares) | 120,000 | ||||||||||
Treasury Stock | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Stock exchanged during period (in shares) | 65,000 | 65,000 | |||||||||
AMAK | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Stock exchanged during period (in shares) | 24,489 | 24,489 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 61,718 | $ 62,715 | $ 69,371 | $ 65,155 | $ 74,669 | $ 73,416 | $ 68,106 | $ 71,741 | $ 258,959 | $ 287,932 | $ 245,143 |
Gross profit | 8,310 | 9,567 | 10,565 | 10,073 | 2,694 | 6,842 | 8,142 | 10,140 | 38,515 | 27,818 | 41,561 |
Net income (loss) from continuing operations | (18,740) | 1,583 | 2,476 | 1,797 | (5,232) | (716) | 2,035 | 2,185 | (12,884) | (1,728) | 21,512 |
Net income (loss) from discontinued operations, net of tax | (970) | (1,002) | (72) | (46) | (58) | (893) | 180 | 167 | (2,090) | (604) | (3,503) |
Net income (loss) | $ (19,710) | $ 581 | $ 2,404 | $ 1,751 | $ (5,290) | $ (1,609) | $ 2,215 | $ 2,352 | $ (14,974) | $ (2,332) | $ 18,009 |
Basic EPS from continuing operations (in dollars per share) | $ (0.76) | $ 0.06 | $ 0.10 | $ 0.07 | $ (0.21) | $ (0.03) | $ 0.08 | $ 0.09 | $ (0.52) | $ (0.07) | $ 0.89 |
Basic EPS from discontinued operations (in dollars per share) | (0.04) | (0.04) | 0 | 0 | 0 | (0.04) | 0.01 | 0.01 | (0.08) | (0.02) | (0.14) |
Basic earnings (loss) per share (in dollars per share) | (0.80) | 0.02 | 0.10 | 0.07 | (0.22) | (0.07) | 0.09 | 0.10 | (0.61) | (0.10) | 0.74 |
Diluted EPS from continuing operations (in dollars per share) | (0.76) | 0.06 | 0.10 | 0.07 | (0.21) | (0.03) | 0.08 | 0.09 | (0.52) | (0.07) | 0.86 |
Diluted EPS from discontinued operations (in dollars per share) | (0.04) | (0.04) | 0 | 0 | 0 | (0.04) | 0.01 | 0.01 | (0.08) | (0.02) | (0.14) |
Diluted earnings (loss) per share (in dollars per share) | $ (0.80) | $ 0.02 | $ 0.10 | $ 0.07 | $ (0.22) | $ (0.06) | $ 0.09 | $ 0.09 | $ (0.61) | $ (0.10) | $ 0.72 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Company Director | |||
Related Party Transaction [Line Items] | |||
Consulting fees | $ 53,000 | $ 28,000 | $ 27,000 |
Outstanding liability payable | 0 | 0 | |
Chairman of the Board | |||
Related Party Transaction [Line Items] | |||
Consulting fees | 123,000 | 94,000 | $ 74,000 |
Outstanding liability payable | $ 0 | $ 0 |
RESTRUCTURING AND SEVERANCE E_2
RESTRUCTURING AND SEVERANCE EXPENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance expenses | $ 0 | $ 2,347 | $ 0 |
Accounts Payable and Accrued Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Amount of restructuring that remains unpaid | $ 20 | $ 1,200 |
POST-RETIREMENT OBLIGATIONS (De
POST-RETIREMENT OBLIGATIONS (Details) - Postretirement Benefits - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Deferred compensation arrangement with individual, amount of post-retirement obligation outstanding | $ 339 | $ 377 |
Defined benefit plan, benefits paid | $ 21 | $ 18 |
VALUATION AND QUALIFYING ACCO_2
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | $ 225,622 | $ 225,622 | $ 376,037 |
Charged (credited) to earnings | 0 | 0 | (150,415) |
Deductions | 0 | 0 | 0 |
Ending balance | 225,622 | 225,622 | 225,622 |
SEC Schedule, 12-09, Allowance, Credit Loss | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Beginning balance | 452,000 | 300,000 | 300,000 |
Charged (credited) to earnings | (23,000) | 152,000 | 0 |
Deductions | 0 | 0 | 0 |
Ending balance | $ 429,000 | $ 452,000 | $ 300,000 |
AMAK FINANCIAL STATEMENTS - Bal
AMAK FINANCIAL STATEMENTS - Balance Sheets (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2016SAR (ر.س) |
Current assets: | ||||||
Cash and cash equivalents | $ | $ 6,145 | $ 6,735 | ||||
Accounts receivable | $ | 26,320 | 27,112 | ||||
Inventories | $ | 13,624 | 16,539 | ||||
Total current assets | $ | 84,090 | 93,978 | ||||
Non-current assets: | ||||||
PLANT, PIPELINE, AND EQUIPMENT, NET (Note 8) | $ | 188,919 | 194,657 | ||||
TOTAL ASSETS | $ | 301,819 | 329,968 | ||||
Current liabilities: | ||||||
Zakat and income tax liability | $ | 215 | 210 | ||||
Capital lease obligation, current portion | ر.س 2,318,301 | |||||
Long-term debt, current portion | $ | 4,194 | 4,194 | ||||
Total current liabilities | $ | 28,635 | 29,491 | ||||
Non-current liabilities | ||||||
Capital lease obligation, net of current portion | 3,898,002 | |||||
Long-term debt, net of current portion and deferred finance costs | $ | 79,095 | 98,288 | ||||
Deferred income taxes | $ | 11,375 | 15,676 | ||||
Shareholders' equity | ||||||
Share capital | $ | 2,475 | 2,463 | ||||
Share premium | $ | 59,530 | 58,294 | ||||
Accumulated deficit | $ | 109,149 | 124,123 | ||||
Total Trecora Resources Stockholders' Equity | $ | 171,154 | 184,872 | ||||
TOTAL LIABILITIES AND EQUITY | $ | 301,819 | 329,968 | ||||
AMAK | ||||||
Current assets: | ||||||
Cash and cash equivalents | 52,244,794 | ر.س 31,510,496 | ||||
Accounts receivable | 29,643,472 | 16,235,035 | ||||
Inventories | 35,277,340 | 45,871,120 | ||||
Advances to shareholders (Note 1) | 2,859,341 | 52,562,028 | ||||
Advances to contractors and other | 50,053,018 | 19,168,765 | ||||
Total current assets | 170,077,965 | 165,347,444 | ||||
Non-current assets: | ||||||
PLANT, PIPELINE, AND EQUIPMENT, NET (Note 8) | 610,634,432 | 634,856,075 | ||||
Development costs, net | 121,267,664 | 155,281,525 | ||||
Deferred mine closure costs | 5,211,505 | 5,955,999 | ||||
Total non-current assets | 737,113,601 | 796,093,599 | ||||
TOTAL ASSETS | 907,191,566 | 961,441,043 | ||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | 40,418,619 | 28,756,945 | ||||
Zakat and income tax liability | 10,932,026 | 5,400,000 | ||||
Capital lease obligation, current portion | 2,318,301 | 193,206 | ||||
Long-term debt, current portion | 50,000,000 | 30,000,000 | ||||
Total current liabilities | 103,668,946 | 64,350,151 | ||||
Non-current liabilities | ||||||
Provision for mine closure costs | 16,625,347 | 16,063,136 | ر.س 15,519,938 | ر.س 14,995,109 | ||
Capital lease obligation, net of current portion | 3,898,002 | 359,811 | ||||
Long-term debt, net of current portion and deferred finance costs | 267,933,847 | 266,258,712 | ||||
End-of-service indemnities | 4,880,892 | 3,649,889 | ر.س 2,518,529 | |||
Deferred income taxes | 4,217,658 | 3,792,785 | ||||
Total non-current liabilities | 297,555,746 | 290,124,333 | ||||
Commitments and contingencies (Note 14) | $ | ||||||
Shareholders' equity | ||||||
Share capital | 820,000,000 | 820,000,000 | ||||
Share premium | (74,713,000) | 0 | ||||
Accumulated deficit | (239,320,000) | (213,033,000) | ||||
Total Trecora Resources Stockholders' Equity | $ | $ 505,967 | $ 606,967 | ||||
TOTAL LIABILITIES AND EQUITY | ر.س 907,192,000 | ر.س 961,441,000 |
AMAK FINANCIAL STATEMENTS - Sta
AMAK FINANCIAL STATEMENTS - Statements of Operations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Revenues | $ | $ 61,718 | $ 62,715 | $ 69,371 | $ 65,155 | $ 74,669 | $ 73,416 | $ 68,106 | $ 71,741 | $ 258,959 | $ 287,932 | $ 245,143 | |||
Costs of revenues | $ | 220,444 | 260,114 | 203,582 | |||||||||||
Gross Profit | $ | 8,310 | 9,567 | 10,565 | 10,073 | 2,694 | 6,842 | 8,142 | 10,140 | 38,515 | 27,818 | 41,561 | |||
General and administrative expenses | $ | 24,386 | 22,532 | 22,414 | |||||||||||
Operating income (loss) | $ | (10,863) | 2,199 | 18,275 | |||||||||||
Other income (expense) | ||||||||||||||
Finance charges | $ | (5,139) | (4,100) | (2,931) | |||||||||||
Total other income (expense) | $ | (5,587) | (4,573) | (2,991) | |||||||||||
Income (loss) from continuing operations before income tax benefit | $ | (16,450) | (2,374) | 15,284 | |||||||||||
Zakat and income tax benefit (expense) | $ | 3,566 | 646 | 6,228 | |||||||||||
Net income (loss) | $ | $ (19,710) | $ 581 | $ 2,404 | $ 1,751 | $ (5,290) | $ (1,609) | $ 2,215 | $ 2,352 | $ (14,974) | $ (2,332) | $ 18,009 | |||
AMAK | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Revenues | ر.س 293,811,329 | ر.س 263,377,273 | ر.س 136,629,881 | |||||||||||
Costs of revenues | 261,073,821 | 255,313,296 | 162,388,373 | |||||||||||
Gross Profit | 32,737,508 | 8,063,977 | (25,758,492) | |||||||||||
General and administrative expenses | 48,927,307 | 29,475,998 | 28,299,733 | |||||||||||
Operating income (loss) | (16,189,799) | (21,412,021) | (54,058,225) | |||||||||||
Other income (expense) | ||||||||||||||
Gain on forgiveness of liabilities and spare parts | 0 | 0 | 0 | |||||||||||
Finance charges | (5,436,532) | (5,969,821) | (6,103,680) | |||||||||||
Other income | 2,091,152 | 323,575 | 893,524 | |||||||||||
Total other income (expense) | (3,345,380) | (5,646,246) | (5,210,156) | |||||||||||
Income (loss) from continuing operations before income tax benefit | (19,535,179) | (27,058,267) | (59,268,381) | |||||||||||
Zakat and income tax benefit (expense) | (6,751,156) | 1,824,929 | (3,627,193) | |||||||||||
Net income (loss) | ر.س (26,286,335) | ر.س (25,233,338) | ر.س (62,895,574) |
AMAK FINANCIAL STATEMENTS - S_2
AMAK FINANCIAL STATEMENTS - Statements of Changes in Shareholders' Equity (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2019SAR (ر.س) | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | $ | $ 185,161 | $ 185,011 | $ 164,376 | ||||
Issuance of share capital and premium | $ | 11 | 284 | (36) | ||||
Net loss | $ | (14,974) | (2,332) | 18,009 | ||||
Balance | $ | 171,443 | 185,161 | 185,011 | ||||
Share Capital | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | $ | 2,463 | 2,451 | 2,451 | ||||
Issuance of share capital and premium | $ | 11 | 2 | |||||
Balance | $ | 2,475 | 2,463 | 2,451 | ||||
Share Premium | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | $ | 58,294 | 56,012 | 53,474 | ||||
Issuance of share capital and premium | $ | 127 | (92) | |||||
Balance | $ | 59,530 | 58,294 | 56,012 | ||||
Treasury Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | $ | (8) | (196) | (284) | ||||
Issuance of share capital and premium | $ | 155 | 56 | |||||
Balance | $ | 0 | (8) | (196) | ||||
Retained Earnings (Accumulated Deficit) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | $ | 124,123 | 126,455 | 108,446 | ||||
Net loss | $ | (14,974) | (2,332) | 18,009 | ||||
Balance | $ | $ 109,149 | $ 124,123 | $ 126,455 | ||||
AMAK | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | ر.س 606,966,559 | ر.س 606,966,559 | ر.س 629,746,317 | ر.س 692,641,891 | |||
Issuance of share capital and premium | 2,453,580 | ||||||
Share repurchase | (74,713,000) | (74,713,350) | |||||
Net loss | (26,286,335) | (25,233,338) | (62,895,574) | ||||
Balance | 505,966,874 | 606,966,559 | 629,746,317 | ||||
AMAK | Share Capital | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | 820,000,000 | 820,000,000 | 780,000,000 | 780,000,000 | |||
Conversion of share premium to share capital | 40,000,000 | ||||||
Balance | 820,000,000 | 820,000,000 | 780,000,000 | ||||
AMAK | Share Premium | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | 0 | 0 | 37,546,420 | 37,546,420 | |||
Issuance of share capital and premium | 2,453,580 | ||||||
Conversion of share premium to share capital | (40,000,000) | ||||||
Balance | 0 | 0 | 37,546,420 | ||||
AMAK | Treasury Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchase | (74,713,350) | ||||||
Balance | (74,713,350) | ||||||
AMAK | Retained Earnings (Accumulated Deficit) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance | ر.س (213,033,441) | (213,033,441) | (187,800,103) | (124,904,529) | |||
Net loss | (26,286,335) | (25,233,338) | (62,895,574) | ||||
Balance | ر.س (239,319,776) | ر.س (213,033,441) | ر.س (187,800,103) |
AMAK FINANCIAL STATEMENTS - S_3
AMAK FINANCIAL STATEMENTS - Statements of Cash Flows (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | |
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | $ (19,710,000) | $ 581,000 | $ 2,404,000 | $ 1,751,000 | $ (5,290,000) | $ (1,609,000) | $ 2,215,000 | $ 2,352,000 | $ (14,974,000) | $ (2,332,000) | $ 18,009,000 | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||
Amortization of deferred finance costs | $ | 181,000 | 261,000 | 247,000 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | $ | 816,000 | (1,485,000) | (3,586,000) | |||||||||||
Inventories | $ | 2,914,000 | 1,911,000 | (579,000) | |||||||||||
Accounts payable and accrued liabilities | $ | (4,944,000) | 2,202,000 | 6,976,000 | |||||||||||
Net Cash Provided by Operating Activities - Continuing Operations | $ | 25,121,000 | 19,895,000 | 30,828,000 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Additions to property and equipment | $ | (10,079,000) | (25,285,000) | (51,584,000) | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Issuance of share capital and premium | $ | 0 | 0 | 25,000 | |||||||||||
Borrowings from long-term debt | $ | 2,000,000 | 18,177,000 | 26,000,000 | |||||||||||
Payments on long-term debt | $ | (21,375,000) | (15,354,000) | (10,417,000) | |||||||||||
Net Cash (Used in) Provided by Financing Activities | $ | (19,680,000) | 3,683,000 | 15,502,000 | |||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | $ | (590,000) | 3,707,000 | (5,361,000) | |||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | $ | $ 6,735,000 | $ 3,028,000 | 6,735,000 | 3,028,000 | 8,389,000 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | $ 6,145,000 | $ 6,735,000 | 6,145,000 | 6,735,000 | 3,028,000 | |||||||||
Supplemental cash flow information | ||||||||||||||
Cash paid for interest | $ | 4,731,000 | 4,560,000 | 3,540,000 | |||||||||||
Cash paid for Zakat and income tax | $ | 53,000 | (4,182,000) | 92,000 | |||||||||||
AMAK | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | ر.س (26,286,335) | ر.س (25,233,338) | ر.س (62,895,574) | |||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 113,949,259 | 125,507,864 | 83,547,586 | |||||||||||
Accretion of deferred mine closure costs | 562,211 | 543,198 | 524,829 | |||||||||||
Amortization of deferred finance costs | 1,675,135 | 2,175,902 | 1,610,733 | |||||||||||
Gain on forgiveness of liabilities | 0 | 0 | 0 | |||||||||||
Deferred income taxes | 424,873 | (7,224,929) | 417,966 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | (13,408,437) | (8,021,219) | (8,213,816) | |||||||||||
Inventories | 10,593,780 | (18,644,188) | (11,351,752) | |||||||||||
Advances to contractors and other | (30,884,252) | 563,016 | (3,944,995) | |||||||||||
Accounts payable and accrued liabilities | 11,661,674 | 6,084,327 | 9,638,009 | |||||||||||
Zakat and income tax liability | 5,532,026 | 1,883,327 | 1,583,048 | |||||||||||
End-of-service indemnities | 1,231,003 | 1,131,360 | 1,037,893 | |||||||||||
Net Cash Provided by Operating Activities - Continuing Operations | 75,050,937 | 78,765,320 | 11,953,927 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Additions to property and equipment | (48,246,282) | (28,945,309) | (31,550,443) | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Issuance of share capital and premium | 0 | 2,453,580 | 0 | |||||||||||
Payments on capital lease obligations | (1,059,694) | (72,788) | 0 | |||||||||||
Repurchase of treasury stock | (22,151,322) | 0 | 0 | |||||||||||
Borrowings from long-term debt | $ | 50,000,000 | 0 | 0 | |||||||||||
Payments on long-term debt | (30,000,000) | 0 | (5,000,000) | |||||||||||
Net advances from (to) shareholders | (2,859,341) | (53,015,844) | 403,147 | |||||||||||
Net Cash (Used in) Provided by Financing Activities | $ | (6,070,357) | (50,635,052) | (4,596,853) | |||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 20,734,298 | (815,041) | (24,193,369) | |||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 31,510,496 | 32,325,537 | 56,518,906 | |||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 52,244,794 | 31,510,496 | 32,325,537 | |||||||||||
Supplemental cash flow information | ||||||||||||||
Cash paid for interest | 4,428,545 | 3,927,778 | 3,686,000 | |||||||||||
Cash paid for Zakat and income tax | 6,086,073 | 3,212,813 | 1,626,179 | |||||||||||
Supplemental disclosure of non-cash items | ||||||||||||||
Assets acquired through capital lease obligations | ر.س 7,933,140 | ر.س 625,805 | ر.س 0 | |||||||||||
Advances to shareholders applied to treasury stock purchase | $ | $ 52,562,028 | $ 0 | $ 0 |
AMAK ORGANIZATION AND BUSINES_2
AMAK ORGANIZATION AND BUSINESS - Narrative (Details) ر.س / shares in Units, $ in Millions | Oct. 02, 2019USD ($) | Oct. 02, 2019SAR (ر.س) | May 22, 1993SAR (ر.س)km² | Mar. 31, 2019SAR (ر.س)shares | Dec. 31, 2019SAR (ر.س)shares | Dec. 31, 2018SAR (ر.س)shares | Dec. 31, 2016SAR (ر.س)ر.س / sharesshares | Dec. 31, 2015SAR (ر.س)shares | Dec. 31, 2013SAR (ر.س)ر.س / sharesshares | Dec. 31, 2011SAR (ر.س)ر.س / sharesshares | Oct. 31, 2018ر.س / sharesshares | Dec. 31, 2009SAR (ر.س)share_bundleshares |
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Authorized capital (in shares) | shares | 40,000,000 | 40,000,000 | ||||||||||
Issued capital (in shares) | shares | 24,800,000 | 24,600,000 | ||||||||||
AMAK | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Authorized capital (in shares) | shares | 450,000,000 | |||||||||||
Authorized capital, number of share bundles | share_bundle | 45,000,000 | |||||||||||
Authorized capital, number of shares per bundle | shares | 10 | 10 | 10 | 10 | 10 | 10 | ||||||
Capital issued for cash (as a percent) | 50.00% | |||||||||||
Capital issued for contribution of mining rights and assets (as a percent) | 50.00% | |||||||||||
Increase to authorized share capital (SR) | ر.س 40,000,000 | ر.س 40,000,000 | ر.س 190,000,000 | ر.س 50,000,000 | ر.س 50,000,000 | |||||||
Authorized share capital (SR) | ر.س 820,000,000 | ر.س 780,000,000 | ر.س 740,000,000 | ر.س 550,000,000 | ر.س 500,000,000 | |||||||
Issued capital (in shares) | shares | 4,000,000 | 4,000,000 | 19,000,000 | 5,000,000 | 5,000,000 | |||||||
Price per share (SR per share) | ر.س / shares | ر.س 20 | ر.س 30 | ر.س 28 | |||||||||
Share premium (SR) | ر.س 35,092,840 | ر.س 100,000,000 | ر.س 90,000,000 | |||||||||
Increase to share premium for shares that were previously issued (SR) | ر.س 2,453,580 | |||||||||||
Approved repurchase amount (in shares) | shares | 2,500,000 | |||||||||||
Approved repurchase price (SR per share) | ر.س / shares | ر.س 30 | |||||||||||
Advances to shareholders (SR) | ر.س 2,859,341 | ر.س 52,562,028 | ||||||||||
Stock repurchases during period (in shares) | shares | 2,490,445 | |||||||||||
Stock repurchased (SR) | ر.س 74,713,000 | ر.س 74,713,350 | ||||||||||
Trecora | Loan payable | Loan due to the Ministry of Finance and National Economy | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Aggregate amount | ر.س 41,250,000 | |||||||||||
Trecora | Al Masane mine | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Mining rights, term | 30 years | |||||||||||
Mining rights, renewal period | 20 years | |||||||||||
Area of mine (in square kilometers) | km² | 44 | |||||||||||
Surface rental per square kilometer per year | ر.س 10,000 | |||||||||||
Surface rental per year | ر.س 440,000 | |||||||||||
AMAK | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Amount of investment sold | $ 70 | ر.س 264,700,000 | ||||||||||
Non-refundable deposit of amount sold, percentage | 5.00% | 5.00% | ||||||||||
Proceeds from sale of investment | $ | $ 3.5 | |||||||||||
AMAK | AMAK | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Proceeds from sale of investment | ر.س 2,855,000 |
AMAK ORGANIZATION AND BUSINES_3
AMAK ORGANIZATION AND BUSINESS - Schedule of Ownership in Joint Stock Company (Details) - AMAK - shares | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 29, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 30, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership Percentage | 33.30% | 33.30% | 33.40% | 33.40% | 33.41% | 33.44% |
Saudi shareholders,Trecora, and ARMICO | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Shares | 79,509,550 | |||||
Ownership Percentage | 100.00% | |||||
Saudi shareholders | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Shares | 37,248,210 | |||||
Ownership Percentage | 46.80% | |||||
Trecora (US Company) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Shares | 26,467,422 | |||||
Ownership Percentage | 33.30% | |||||
ARMICO (Pan Arab Organization) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Shares | 15,502,500 | |||||
Ownership Percentage | 19.50% | |||||
Other | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Shares | 291,418 | |||||
Ownership Percentage | 0.40% |
AMAK SUMMARY OF SIGNIFICANT A_2
AMAK SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) ر.س in Thousands | 12 Months Ended | |||
Dec. 31, 2019SAR (ر.س)ر.س / $ | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017SAR (ر.س) | Jun. 30, 1986 | |
Property, Plant and Equipment [Line Items] | ||||
Foreign exchange rate (SR per USD) | ر.س / $ | 3.75 | |||
AMAK | ||||
Property, Plant and Equipment [Line Items] | ||||
Operating lease expense | ر.س | ر.س 4,015 | ر.س 1,619 | ر.س 1,454 | |
Zakat tax rate | 2.50% | |||
Non-Saudi tax rate | 20.00% | |||
AMAK | Riyals | ||||
Property, Plant and Equipment [Line Items] | ||||
Foreign exchange rate (SR per USD) | 3.75 | |||
AMAK | Other assets | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 3 years | |||
AMAK | Other assets | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 20 years |
AMAK LIQUIDITY AND CAPITAL RE_2
AMAK LIQUIDITY AND CAPITAL RESOURCES (Details) - AMAK | 12 Months Ended |
Dec. 31, 2019year | |
Schedule of Equity Method Investments [Line Items] | |
Number of consecutive years of net losses | 3 |
Mining assets – rehabilitation costs | |
Schedule of Equity Method Investments [Line Items] | |
Extension to life of mine | 2 years |
AMAK INVENTORIES (Details)
AMAK INVENTORIES (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) |
Inventory [Line Items] | ||||
Inventories | $ | $ 13,624 | $ 16,539 | ||
AMAK | ||||
Inventory [Line Items] | ||||
Inventories | ر.س 35,277,340 | ر.س 45,871,120 | ||
AMAK | Stockpile ore | ||||
Inventory [Line Items] | ||||
Inventories | 18,657,218 | 19,134,297 | ||
AMAK | Ore concentrates | ||||
Inventory [Line Items] | ||||
Inventories | 6,294,948 | 17,020,657 | ||
AMAK | Precious metal dore | ||||
Inventory [Line Items] | ||||
Inventories | 4,490,589 | 2,159,192 | ||
AMAK | Explosives | ||||
Inventory [Line Items] | ||||
Inventories | 326,599 | 1,134,728 | ||
AMAK | Chemicals and other | ||||
Inventory [Line Items] | ||||
Inventories | ر.س 5,507,986 | ر.س 6,422,246 |
AMAK ADVANCES TO CONTRACTORS _3
AMAK ADVANCES TO CONTRACTORS AND OTHER (Details) - AMAK - SAR (ر.س) | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Advances to contractors | ر.س 42,672,136 | ر.س 15,127,502 |
Prepaid expenses | 5,185,037 | 1,196,218 |
Other miscellaneous advances and receivables | 2,195,845 | 2,845,045 |
Advances to contractors and other | ر.س 50,053,018 | ر.س 19,168,765 |
AMAK PROPERTY AND EQUIPMENT (De
AMAK PROPERTY AND EQUIPMENT (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018SAR (ر.س) | |
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | $ | $ 274,806 | $ 268,419 | |||||
Less accumulated depreciation | $ | (85,887) | (73,762) | |||||
PLANT, PIPELINE, AND EQUIPMENT, NET (Note 8) | $ | 188,919 | 194,657 | |||||
Depreciation, depletion and amortization expense | $ | 16,201 | 14,358 | |||||
Construction in progress | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | $ | $ 5,052 | $ 4,343 | |||||
AMAK | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | ر.س 1,122,282,851 | ر.س 1,067,680,433 | |||||
Less accumulated depreciation | (511,648,419) | (432,824,358) | |||||
PLANT, PIPELINE, AND EQUIPMENT, NET (Note 8) | 610,634,432 | 634,856,075 | |||||
Depreciation, depletion and amortization expense | ر.س 79,000,000 | ر.س 88,000,000 | ر.س 64,300,000 | ||||
AMAK | Buildings | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 191,838,962 | 191,041,157 | |||||
AMAK | Leasehold improvements | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 1,838,317 | 1,838,317 | |||||
AMAK | Heavy equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 136,066,275 | 118,125,568 | |||||
AMAK | Motor vehicles | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 22,467,300 | 22,467,300 | |||||
AMAK | Civil works | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 16,288,221 | 15,662,671 | |||||
AMAK | Tailings dam | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 23,900,160 | 23,042,594 | |||||
AMAK | Plant and machinery | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 326,974,958 | 324,372,695 | |||||
AMAK | Mining assets – rehabilitation costs | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 98,894,826 | 98,894,826 | |||||
AMAK | Mining assets – underground development costs | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 299,224,519 | 267,128,896 | |||||
AMAK | Construction in progress | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | ر.س 4,789,313 | ر.س 5,106,409 |
AMAK DEVELOPMENT COSTS (Details
AMAK DEVELOPMENT COSTS (Details) - AMAK - SAR (ر.س) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Cost | ر.س 289,973,237 | ر.س 289,973,237 | |
Accumulated amortization | (168,705,573) | (134,691,712) | |
Development costs, net | 121,267,664 | 155,281,525 | |
Amortization expenses related to development costs | ر.س 34,014,000 | ر.س 36,250,000 | ر.س 18,200,000 |
AMAK ACCOUNTS PAYABLE, ACCRUE_3
AMAK ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND FORGIVENESS OF LIABILITIES (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) |
Schedule of Equity Method Investments [Line Items] | ||||
Other | $ | $ 922 | $ 733 | ||
Spare parts included in property and equipment, net on the balance sheets | $ | 1,857 | 1,597 | ||
Total amounts of liabilities recorded | $ | $ 130,376 | $ 144,807 | ||
AMAK | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Accounts payable and accrued liabilities | ر.س | ر.س 36,571,709 | ر.س 27,306,933 | ||
Accrued salaries and payroll expenses | ر.س | 3,846,910 | 1,450,012 | ||
Accounts payable and accrued liabilities | ر.س | ر.س 40,418,619 | ر.س 28,756,945 |
AMAK ZAKAT AND INCOME TAX - Com
AMAK ZAKAT AND INCOME TAX - Components of Income Tax Benefit (Expense) (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | |
Income Tax Disclosure [Line Items] | ||||||
Deferred income tax benefit | $ | $ (2,993) | $ (1,377) | $ (4,946) | |||
Zakat and income tax expense (benefit) | $ | $ (3,566) | $ (646) | $ (6,228) | |||
AMAK | ||||||
Income Tax Disclosure [Line Items] | ||||||
Deferred income tax benefit | ر.س 1,737,276 | ر.س (12,961,569) | ر.س (8,617,706) | |||
Change in valuation allowance | (1,312,403) | 5,736,640 | 9,035,670 | |||
Current Zakat and income tax expense | 6,326,283 | 5,400,000 | 3,209,229 | |||
Zakat and income tax expense (benefit) | ر.س 6,751,156 | ر.س (1,824,929) | ر.س 3,627,193 |
AMAK ZAKAT AND INCOME TAX - Nar
AMAK ZAKAT AND INCOME TAX - Narrative (Details) ر.س in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | |
Income Tax Disclosure [Line Items] | ||||
Tax loss carryforwards | $ | $ 56.6 | $ 43.2 | ||
AMAK | ||||
Income Tax Disclosure [Line Items] | ||||
Statutory rate for non-Saudi shareholders | 20.00% | |||
Tax loss carryforwards | ر.س | ر.س 206,468 | ر.س 210,970 |
AMAK ZAKAT AND INCOME TAX - Tax
AMAK ZAKAT AND INCOME TAX - Tax Effects of Temporary Differences (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) |
Deferred tax assets: | ||||
Loss carryforward | $ | $ 11,685 | $ 9,073 | ||
Gross deferred tax assets | $ | 21,250 | 11,505 | ||
Deferred tax liabilities: | ||||
Property and Equipment | $ | (29,227) | (25,169) | ||
Valuation allowance | $ | (226) | (226) | ||
Net deferred tax liabilities | $ | $ (11,375) | $ (15,676) | ||
AMAK | ||||
Deferred tax assets: | ||||
Loss carryforward | ر.س 41,293,547 | ر.س 42,193,939 | ||
Other | 799,526 | 656,819 | ||
Gross deferred tax assets | 42,093,073 | 42,850,758 | ||
Deferred tax liabilities: | ||||
Property and Equipment | (8,785,642) | (7,806,051) | ||
Net deferred tax asset | 33,307,431 | 35,044,707 | ||
Valuation allowance | (37,525,089) | (38,837,492) | ||
Net deferred tax liabilities | ر.س (4,217,658) | ر.س (3,792,785) |
AMAK LONG-TERM DEBT - Narrative
AMAK LONG-TERM DEBT - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019SAR (ر.س) | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2010SAR (ر.س) | |
Debt Instrument [Line Items] | ||||||||||
Loan fees | $ | $ 649 | $ 830 | ||||||||
Amortization of deferred finance costs | $ | $ 181 | $ 261 | $ 247 | |||||||
AMAK | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan fees | ر.س 7,066,153 | ر.س 8,741,288 | ||||||||
Amortization of deferred finance costs | ر.س 1,675,135 | ر.س 2,175,902 | ر.س 1,610,733 | |||||||
Banque Saudi Fransi (BSF) Credit Facility | AMAK | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility | 110,518,400 | |||||||||
Proceeds from credit facility | ر.س 50,000,000 | |||||||||
Periodic payment on credit facility | ر.س 4,000,000 | |||||||||
Secured Debt | Loan agreement with SIDF | AMAK | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Collateralized loan agreement | ر.س 330,000,000 | |||||||||
Loan fees | ر.س 7,066,153 | ر.س 8,741,288 | ||||||||
Amortization of deferred finance costs | ر.س 1,639,000 | ر.س 1,639,000 | ر.س 1,611,000 | |||||||
Saudi Arabian Interbank Offered Rate (SAIBOR) | Line of Credit [Member] | Banque Saudi Fransi (BSF) Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | 2.50% |
AMAK LONG-TERM DEBT - Summary o
AMAK LONG-TERM DEBT - Summary of Long-Term Debts (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) |
Debt Instrument [Line Items] | ||||
SIDF | $ | $ 83,938 | |||
Deferred finance charges | $ | (649) | $ (830) | ||
Total debt | $ | 83,289 | 102,482 | ||
Less current portion | $ | 4,194 | 4,194 | ||
Total long-term debt, less current portion | $ | $ 79,095 | $ 98,288 | ||
AMAK | ||||
Debt Instrument [Line Items] | ||||
SIDF | ر.س 275,000,000 | ر.س 305,000,000 | ||
BSF | 50,000,000 | 0 | ||
Deferred finance charges | (7,066,153) | (8,741,288) | ||
Total debt | 317,933,847 | 296,258,712 | ||
Less current portion | 50,000,000 | 30,000,000 | ||
Total long-term debt, less current portion | ر.س 267,933,847 | ر.س 266,258,712 |
AMAK LONG-TERM DEBT - Repayment
AMAK LONG-TERM DEBT - Repayment Schedule (Details) - Dec. 31, 2019 $ in Thousands | USD ($) | SAR (ر.س) |
Years Ending December 31, | ||
2020 | $ | $ 4,375 | |
2021 | $ | 4,375 | |
2022 | $ | 4,375 | |
2023 | $ | $ 70,813 | |
AMAK | ||
Years Ending December 31, | ||
2020 | ر.س 50,000,000 | |
2021 | 76,666,668 | |
2022 | 76,666,668 | |
2023 | 86,666,664 | |
2023 | 35,000,000 | |
Total debt | ر.س 325,000,000 |
AMAK END-OF-SERVICE INDEMNITI_3
AMAK END-OF-SERVICE INDEMNITIES (Details) - AMAK - SAR (ر.س) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
End-Of-Service Indemnities [Roll Forward] | ||
Balance, beginning of year | ر.س 3,649,889 | ر.س 2,518,529 |
Provision for the year | 2,208,156 | 1,347,418 |
Paid during the year | (977,153) | (216,058) |
Balance, end of year | ر.س 4,880,892 | ر.س 3,649,889 |
AMAK ASSET RETIREMENT OBLIGAT_3
AMAK ASSET RETIREMENT OBLIGATIONS - Narrative (Details) - AMAK - SAR (ر.س) ر.س in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2012 | |
Schedule of Equity Method Investments [Line Items] | ||||
ARO recorded for deferred mine closure costs | ر.س 12,843 | |||
Amortization expense | ر.س 745 | ر.س 745 | ر.س 1,117 |
AMAK ASSET RETIREMENT OBLIGAT_4
AMAK ASSET RETIREMENT OBLIGATIONS - Deferred Mine Closure Costs (Details) - AMAK - SAR (ر.س) | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Cost | ر.س 12,842,625 | ر.س 12,842,625 |
Accumulated amortization | (7,631,120) | (6,886,626) |
Deferred mine closure costs, net | ر.س 5,211,505 | ر.س 5,955,999 |
AMAK ASSET RETIREMENT OBLIGAT_5
AMAK ASSET RETIREMENT OBLIGATIONS - Summary of Changes in Provision for Mine Closure Costs (Details) - AMAK - SAR (ر.س) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Balance, beginning of year | ر.س 16,063,136 | ر.س 15,519,938 | ر.س 14,995,109 |
Accretion expense | 562,211 | 543,198 | 524,829 |
Balance, end of year | ر.س 16,625,347 | ر.س 16,063,136 | ر.س 15,519,938 |
AMAK GENERAL AND ADMINISTRATI_3
AMAK GENERAL AND ADMINISTRATIVE EXPENSES (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) | Dec. 31, 2018SAR (ر.س) | Dec. 31, 2017USD ($) | Dec. 31, 2017SAR (ر.س) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Mine closure and environmental | $ | $ 868 | $ 745 | $ 593 | |||
General and administrative expenses | $ | $ 24,386 | $ 22,532 | $ 22,414 | |||
AMAK | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Wages, salaries and related costs | ر.س 37,273,010 | ر.س 17,036,965 | ر.س 14,837,901 | |||
Mine closure and environmental | 1,306,705 | 1,287,698 | 1,641,580 | |||
Office expenses | 8,831,910 | 9,287,218 | 6,589,090 | |||
Travel and accommodation | 27,182 | 593,046 | 2,958,938 | |||
Professional fees | 1,488,500 | 1,271,071 | 2,272,224 | |||
General and administrative expenses | ر.س 48,927,307 | ر.س 29,475,998 | ر.س 28,299,733 |
AMAK COMMITMENTS AND CONTINGE_3
AMAK COMMITMENTS AND CONTINGENCIES - Operating Lease Obligations (Details) $ in Thousands | Dec. 31, 2019SAR (ر.س) | Dec. 31, 2018USD ($) |
Operating Leases | ||
2020 | $ | $ 3,670 | |
2021 | $ | 3,583 | |
2022 | $ | 3,418 | |
2023 | $ | 3,107 | |
2024 | $ | 2,288 | |
Thereafter | $ | $ 2,065 | |
Mining assets – rehabilitation costs | ||
Operating Leased Assets [Line Items] | ||
Term of lease commitment | 30 years | |
Term of lease renewal | 20 years | |
Guyan | Mining assets – rehabilitation costs | ||
Operating Leased Assets [Line Items] | ||
Term of lease commitment | 20 years | |
AMAK | ||
Operating Leases | ||
2020 | ر.س 990,000 | |
2021 | 990,000 | |
2022 | 990,000 | |
2023 | 550,000 | |
2024 | 550,000 | |
Thereafter | 1,100,000 | |
Total | ر.س 5,170,000 |
AMAK COMMITMENTS AND CONTINGE_4
AMAK COMMITMENTS AND CONTINGENCIES - Capital Lease Obligations (Details) | Dec. 31, 2019SAR (ر.س) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | ر.س 2,894,906 |
2021 | 2,791,921 |
2022 | 1,482,543 |
Total minimum lease payments | 7,169,370 |
Less deferred financial charges | (953,067) |
Total capital lease obligations | 6,216,303 |
Less: current portion of capital lease obligations | 2,318,301 |
Total long term portion, net current portion | ر.س 3,898,002 |