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Rentech Nitrogen Partners, L.P. Announces Results For Second Quarter 2013; Updates 2013 Guidance

Conference Call with Management

Rentech Nitrogen will hold a conference call today, August 8, 2013 at 1:30 p.m. PDT, during which senior management will review the Partnership’s financial results for this period and provide an update on the business. Callers may listen to the live presentation, which will be followed by a question and answer segment, by dialing 888-390-3983 or 862-255-5354. An audio webcast of the call will be available at www.rentechnitrogen.com within the Investor Relations portion of the site under the Presentations section. A replay will be available by audio webcast and teleconference from 5:30 p.m. PDT on August 8 through 5:30 p.m. PDT on August 18. The replay teleconference will be available by dialing 888-539-4649 or 908-379-8864 and the audience passcode 93570#.

Note: The financial statements and key operating metrics below include results of the Pasadena Facility only for the three and six months ended June 30, 2013, as the closing of the acquisition of Agrifos LLC, occurred on November 1, 2012.

                       

Rentech Nitrogen Partners, L.P.

Consolidated Statements of Income

(Stated in Thousands, Except per Unit Data)

 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2013 2012 2013 2012
(unaudited) (unaudited)
 
Total Revenues $ 103,956 $ 70,643 $ 163,520 $ 109,116
Cost of Sales   64,108     24,997     100,953     40,898  
 
Gross Profit 39,848 45,646 62,567 68,218
 
Selling, general and administrative expense 4,901 3,884 9,642 6,474
Depreciation 908 83 1,856 636
Other   (7 )   75     8     47  
Operating Expenses   5,802     4,042     11,506     7,157  
 
Operating Income 34,046 41,604 51,061 61,061
 
Other Income (Expense), Net
Interest expense (3,926 ) (42 ) (5,729 ) (142 )
Loss on debt extinguishment (6,001 ) - (6,001 ) -

Gain on FV adjustments to earn-out contingent consideration

4,823 - 4,611 -
Other (expense), net   (96 )   (334 )   (7 )   (318 )
Total Other Expenses, Net   (5,200 )   (376 )   (7,126 )   (460 )
 
Income Before Income Taxes 28,846 41,228 43,935 60,601
 
Income tax expense 125 - 205 -
       
Net Income $ 28,721   $ 41,228   $ 43,730   $ 60,601  
 
Net Income per Common Unit - Basic $ 0.74 $ 1.08 $ 1.12 $ 1.58
Net Income per Common Unit - Diluted $ 0.74 $ 1.08 $ 1.12 $ 1.58
 
Weighted-Average Units:
Basic   38,842     38,253     38,840     38,251  
Diluted   38,899     38,279     38,910     38,272  
 
 
           

Rentech Nitrogen Partners, L.P.

Statements of Income by Business Segment

(Stated in Thousands)

 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2013       2012 2013       2012
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
East Dubuque Facility $ 61,717 $ 70,643 $ 96,266 $ 109,116
Pasadena Facility   42,239     -     67,254     -  
Total Revenues $ 103,956 $ 70,643 $ 163,520 $ 109,116
 
Gross Profit
East Dubuque Facility $ 37,493 $ 45,646 $ 56,239 $ 68,218
Pasadena Facility   2,355     -     6,328     -  
Total Gross Profit $ 39,848 $ 45,646 $ 62,567 $ 68,218
 
Selling, General and Administrative Expenses
East Dubuque Facility $ 1,097 $ 1,530 $ 2,442 $ 2,819
Pasadena Facility   1,342     -     2,584     -  

Total Selling, General and Administrative Expenses

$ 2,439 $ 1,530 $ 5,026 $ 2,819
 
Depreciation and Amortization
East Dubuque Facility $ 33 $ 83 $ 106 $ 636
Pasadena Facility   875     -     1,750     -  

Total Depreciation and Amortization Recorded in Operating Expenses

$ 908 $ 83 $ 1,856 $ 636
 
Other Operating Expenses (Income)
East Dubuque Facility $ (7 ) $ 75 $ 8 $ 47
Pasadena Facility   -     -     -     -  
Total Other Operating (Income) Expenses $ (7 ) $ 75 $ 8 $ 47
 
Operating Income
East Dubuque Facility $ 36,370 $ 43,958 $ 53,683 $ 64,716
Pasadena Facility   138     -     1,994     -  
Total Operating Income $ 36,508 $ 43,958 $ 55,677 $ 64,716
 
Interest Expense
East Dubuque Facility $ - $ 42 $ - $ 142
Pasadena Facility   3     -     6     -  
Total Interest Expense $ 3 $ 42 $ 6 $ 142
 
Net Income
East Dubuque Facility $ 36,044 $ 43,930 $ 53,314 $ 64,604
Pasadena Facility   34     -     1,850     -  
Total Net Income $ 36,078 $ 43,930 $ 55,164 $ 64,604
 

Reconciliation of Segment Net Income to Consolidated Net Income

Segment Net Income $ 36,078 $ 43,930 $ 55,164 $ 64,604

Partnership and Unallocated Expenses Recorded as Selling, General, and Administrative Expense

(2,462 ) (2,354 ) (4,616 ) (3,655 )

Partnership and Unallocated Income (Expenses) Recorded as Other Expenses, Net

(1,178 )

232

 

(1,390 ) 232

Unallocated Interest Expense and Loss on Interest Rate Swaps

(4,019 ) (580 ) (5,730 ) (580 )
Income Tax Benefit   302     -       302     -  

Consolidated Net Income

$ 28,721 $ 41,228 $ 43,730 $ 60,601
 
 
                           

Rentech Nitrogen Partners, L.P.

Balance Sheet Data

(Stated in Thousands)

 

As of

June 30, 2013

As of

December 31, 2012

(unaudited)
 
Cash and Cash Equivalents $ 112,764 $ 55,799
Working Capital 121,345 23,218
Construction in Progress 87,075 61,147
Total Assets 489,722 376,645
Credit Facilities and Term Loan - 193,290
Notes 320,000 -
Total Long-Term Liabilities 323,197 192,961
Total Partners' Capital 105,549 109,404
 
 
           

Key Operating Statistics:

 

Three Months Ended

June 30,

Six Months Ended

June 30,

2013       2012 2013       2012
 
Production Tons (in thousands)
East Dubuque Facility:
Ammonia 76 77 150 155

Ammonia Available for Sale (included in line above)

35 37 69 75
UAN 73 78 150 161
Other Products (excludes CO 2) 78 76 153 152
 
Pasadena Facility:
Ammonium Sulfate 124 - 251 -
Sulfuric Acid 122 - 254 -
Ammonium Thiosulfate 15 - 31 -
 
Delivered Tons (in thousands)
East Dubuque Facility:
Ammonia 41 40 52 70
UAN 59 92 120 126
Other Products (excludes CO 2) 20 13 35 26
 
Pasadena Facility:
Ammonium Sulfate 114 - 168 -
Sulfuric Acid 39 - 80 -
Ammonium Thiosulfate 25 - 40 -
 
Average Price per Delivered Ton
East Dubuque Facility:
Ammonia $ 741 $ 695 $ 740 $ 686
UAN $ 360 $ 378 $ 330 $ 365
 
Pasadena Facility:
Ammonium Sulfate $ 289 - $ 299 -
Sulfuric Acid $ 99 - $ 99 -
Ammonium Thiosulfate $ 187 - $ 191 -
 
Input Costs
East Dubuque Facility:
Natural Gas

Natural Gas Used in Production (Million MMBtus)

2.7 2.8 5.5 5.6

Average Natural Gas Cost per MMBtu, including transportation cost

$ 4.36 $ 3.12 $ 4.17 $ 3.67

Natural Gas Cost in Cost of Sales (Million MMBtus)

2.8 3.0 4.4 4.9

Average Natural Gas Cost per MMBtu, including transportation cost

$ 4.12 $ 3.64 $ 4.06 $ 3.95
 
Pasadena Facility:
Ammonia

Ammonia Used in Production (Thousand Tons)

34 - 68 -

Ammonia in Cost of Sales (Thousand Tons)

32 - 48 -
 
Sulfur

Sulfur Used in Production (Thousand Tons)

44 - 92 -

Sulfur in Cost of Sales (Thousand Tons)

48 - 78 -
 
On-Stream Rates 1 :
East Dubuque Facility:
Ammonia 100.0 % 100.0 % 100.0 % 100.0 %
UAN 97.8 % 100.0 % 99.1 % 100.0 %
 
Pasadena Facility:
Ammonium Sulfate 83.8 % - 82.9 % -
Sulfuric Acid 95.5 % - 97.4 % -
 

1The on-stream factors for the ammonia, UAN, ammonium sulfate and sulfuric acid plants equal the total days the applicable plant operated in any given period, divided by the total days in that period.

Disclosure Regarding Non-GAAP Financial Measures

Adjusted EBITDA is defined as net income plus interest expense and other financing costs, loss on debt extinguishment, loss on interest rate swaps, income tax expense and depreciation and amortization, net of gain in fair value adjustment to earn-out consideration. We calculate cash available for distribution as used in this table as Adjusted EBITDA plus non-cash compensation expense and distribution of cash reserves, less the sum of maintenance capital expenditures not funded by financing proceeds, net interest expense and other debt service. Adjusted EBITDA and cash available for distribution are used as supplemental financial measures by management and by external users of our financial statements, such as investors and commercial banks, to assess:

  • the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; and
  • our operating performance and return on invested capital compared to those of other publicly traded limited partnerships and other public companies, without regard to financing methods and capital structure.

Adjusted EBITDA and cash available for distribution should not be considered alternatives to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and cash available for distribution may have material limitations as performance measures because they exclude items that are necessary elements of our costs and operations. In addition, Adjusted EBITDA and cash available for distribution presented by other companies may not be comparable to our presentation, since each company may define these terms differently.

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