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Rentech Reports 2012 Activities And Financial Results; Provides 2013 Guidance

Stocks in this article: RTK


As previously disclosed, Rentech is focused on immediate growth opportunities that meet the following criteria: unlevered, after-tax returns in the mid-teens or higher; certainty of revenue with long-term contracts for off-take, providing stability of cash flows; no reliance on new technology; and opportunities to leverage Rentech’s expertise and resources.

Rentech is continuing low-cost efforts to seek partners who would provide funding to deploy its alternative energy technologies or to sell or license the technologies to third parties who are developing projects. The Company will attempt to sell the PDU, as well as approximately 450 acres of land in Natchez, Mississippi acquired for the development of an alternative energy facility.

2013 Outlook

Rentech Nitrogen

In its press release dated March 19, 2013, Rentech Nitrogen issued guidance for cash available for distribution for the twelve months ending December 31, 2013 of approximately $2.60 per unit. The 2013 guidance includes the impact of two scheduled outages at its facilities during 2013, and the impact of lost revenue in 2013 due to the unscheduled outage at the East Dubuque Facility in December 2012. Excluding the effects of these outages the forecast for 2013 cash available for distribution would have been approximately $0.65 per unit higher.

Assuming product and input prices equal to those expected in 2013, Rentech Nitrogen noted that the increased annual production from its expansion projects scheduled to come online by the end of 2013 would be expected to add approximately $0.90 per unit of cash distributions and approximately $41 million of EBITDA.

Based on Rentech Nitrogen’s current guidance of $2.60 per unit, and assuming Rentech’s current ownership of 23.25 million units of Rentech Nitrogen, Rentech would receive approximately $60 million in cash distributions in 2013.


Rentech provided the following guidance for cash selling, general and administrative (Cash SG&A) and R&D expenses for 2013, excluding Rentech Nitrogen:


2012 Actual


2013 Guidance




Cash SG&A Expenses $21.4 million Approximately $20 million based on current run rate

Plus: Former R&D Expenses 1




Approximately $5 million, to be incurred over the second through fourth quarters

Total Cash SG&A Expenses       $21.4 million       Approximately $25 million        
Total Cash R&D Expenses $21.0 million Approximately $5 million, to be incurred in the first quarter
Total Cash Operating Expenses       $42.4 million       Approximately $30 million       (30%)

1 Expenses that would have been recorded as R&D absent the decision announced on February 28, 2013, to cease operations, reduce staffing at, and mothball Rentech’s research and development Product Demonstration Unit.

In addition to the above guidance, Rentech indicated that former R&D expenses classified as SG&A are anticipated to be at an annualized run rate of $2-3 million by the end of 2013. Any ongoing costs would be to protect patents covering Rentech’s alternative energy technologies, to maintain the Commerce City site if efforts to sell the site are unsuccessful or to continue low-cost efforts to seek partners who would provide funding to deploy its technologies. Additionally, Rentech expects to incur no R&D expenses in 2014.

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