Commenting on results for the period, D. Hunt Ramsbottom, President and CEO of Rentech, said, “The strong results we reported this quarter reflect high margins and prices in our nitrogen products manufacturing segment and reduced R&D expenses in our alternative energy segment.” Mr. Ramsbottom continued, “To increase shareholder value at Rentech we are further reducing R&D expenses, moving to commercialize our technologies with partners and invest in energy-related businesses with conventional technologies and good returns, and expanding Rentech Nitrogen through growth and acquisitions. The recent acquisition of Agrifos is one example of our execution of this strategy. We’re confident that this accretive acquisition and the diversification and risk reduction benefits it brings to Rentech Nitrogen will enhance the value of our fertilizer business, which directly benefits Rentech’s shareholders.”
Consolidated selling, general and administrative (SG&A) expenses were $12.1 million for the three months ended September 30, 2012, compared to $4.4 million for the comparable period in the prior year. Current period SG&A expenses were comprised of $6.6 million for the alternative energy business and $5.5 million for the nitrogen fertilizer business, compared to $2.7 million and $1.8 million, respectively, for the prior-year period. The increase in SG&A expenses for the alternative energy segment was primarily attributable to an increase in non-cash compensation expense of $3.0 million, an increase that was mainly due to a $2.2 million reversal of previously accrued non-cash compensation expense in the 2011 period for grants related to milestones associated with projects that were terminated; cash SG&A expenses for the alternative energy segment increased by $0.9 million. The $3.7 million increase in SG&A expenses for the nitrogen products manufacturing segment was primarily due to business development expenses, including costs of $1.7 million relating to the Agrifos acquisition. Also contributing to the increase were costs associated with having become a publicly traded limited partnership, including an increase of $1.1 million in non-cash unit-based compensation expense.