Molycorp, Inc. (NYSE:MCP) (“Molycorp” or the “Company”) today announced financial and operating results for the second quarter 2012.
"Molycorp continues to make significant progress on our three strategic priorities: completing Project Phoenix, commercializing XSORBX, and integrating Neo Materials (now known as Molycorp Canada) into Molycorp," said Mark Smith, President and Chief Executive Officer. "Our phased start-up of Project Phoenix Phase 1 is in full-swing, and we are on target to meet our accelerated schedule of achieving the Phase 1 production rate of 19,050 metric tons in Q4."
Smith continued: "We successfully completed the acquisition of Neo Materials during the quarter, and are now producing a full range of ultra-pure, highly engineered custom materials, including heavy rare earths. Molycorp Magnequench had a record quarter in Q2 2012, selling 1,880 mt of alloy powders. In the brief integration period to date, I continue to be impressed with the knowledge, work ethic, and passion which all of our employees bring to the Molycorp family. I continue to believe the addition of Molycorp Canada better positions the Company through diversification into new geographies and sophisticated end-use markets. Our vertical integration into a comprehensive provider of advanced materials has expanded significantly with the addition of Molycorp Canada."
QUARTERLY RESULTSNet sales for the quarter were $104.6 million, up 5% from the second quarter 2011. Molycorp Silmet and Molycorp Metals & Alloys (MMA) were acquired during the second quarter of 2011, and Molycorp Canada was acquired on June 11, 2012, which both contributed to net sales during Q2 2012. Molycorp's second quarter GAAP gross loss was $4.1 million during the quarter, compared to gross profit of $56.7 million during the second quarter of 2011. Gross profit decreased substantially from the prior year period as a result of lower product volumes shipped, lower prices, increased production costs, and other transaction costs related to acquiring Molycorp Canada. Gross loss during the quarter was negatively impacted by $30.4 million of expenses related to certain inventory write-downs, the impact of purchase accounting, stock-based compensation in cost of sales, and abnormal costs. Molycorp’s second quarter GAAP loss attributable to common stockholders was $67.6 million, or a loss of $0.71 per diluted share. Earnings decreased substantially from the prior year period as a result of lower product volumes, lower prices, costs related to the Project Phoenix transition, and other transaction costs related to acquiring Molycorp Canada. Adjusted loss per diluted share of $0.03 reflects operational expansion items, out-of-ordinary business expenses, and certain non-cash items as compared to U.S. GAAP loss per share, such as $52.8 million related to the acquisition of Molycorp Canada, $19.5 million in consolidated inventory write-downs, and $8.4 million in purchase accounting adjustments impacted earnings, among others.