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Rentech Reports Results For Second Quarter 2012

Stocks in this article: RNF RTK

Rentech Nitrogen continues to benefit from relatively low North American natural gas prices, which, when coupled with strong nitrogen product prices, contributed to gross profit margin of 65% for the period, up from 50% for the comparable period in the prior year.

Six months ended June 30, 2012

Consolidated revenues for the six months ended June 30, 2012 were $109.3 million, compared to $98.4 million for the comparable period last year. Revenues were derived almost entirely from sales of nitrogen fertilizer products through Rentech Nitrogen.

Consolidated operating income for the six months ended June 30, 2012 was $36.0 million, compared to $16.3 million for the comparable period last year. During the six months ended June 30, 2012, Rentech’s nitrogen products manufacturing segment generated operating income of $61.1 million, compared to $44.9 million during the comparable period in the prior year. EBITDA for Rentech’s nitrogen products manufacturing segment was $66.8 million for the period, compared to $49.8 million in the corresponding period in 2011. Further explanation of EBITDA, a non-GAAP financial measure, and a reconciliation of EBITDA to net income for Rentech’s nitrogen products manufacturing segment have been included below in this press release.

For the six months ended June 30, 2012, Rentech reported consolidated net income of $6.3 million, or $0.03 per share. This compares to net income of $0.3 million, or $0.00 per share, reported in the comparable period in the prior year.

Consolidated SG&A expenses were $21.8 million for the six months ended June 30, 2012, compared to $15.9 million for the comparable period in the prior year. Current period SG&A expenses were comprised of $15.3 million for the alternative energy business and $6.5 million for the nitrogen fertilizer business, compared to $13.3 million and $2.6 million, respectively, for the prior-year period. The net increase in SG&A expenses for the alternative energy segment was primarily attributable to an increase in non-cash compensation expense of $3.1 million; net cash SG&A expenses declined by $1.1 million. The $3.9 million increase in SG&A expenses for the nitrogen products manufacturing segment was primarily due to costs associated with Rentech Nitrogen having become a publicly traded limited partnership and included an increase in non-cash unit-based compensation expense of $1.1 million.

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