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TPC Group, Inc. (TPCG)

F4Q2010 Earnings Call Transcript

September 17, 2010 10:00 am ET


Bob Whitlow – VP, Finance and Treasury

Charlie Shaver – President and CEO

Miguel Desdin – SVP and CFO


Edward Yang – Oppenheimer

Seth Hamot – RRH Capital

Greg Stuecheli – Highland Capital

Jay Burnham – Armory Advisors

Jed Nussbaum – Redwood Capital

Rob Alpert – Atlas Capital



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Good morning, ladies and gentlemen, thank you for standing by. Welcome to the TPC Group fourth quarter earnings conference call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator instructions) This conference is being recorded today, Friday, September 17, 2010. I would now like to turn the conference over to Bob Whitlow, Vice President of Finance. Please go ahead, sir.

Bob Whitlow

Thank you, operator. And welcome to TPC Group’s fiscal 2010 fourth quarter conference call. My name is Bob Whitlow, Vice President of Finance. With me today are Charlie Shaver, President and Chief Executive Officer; and Miguel Desdin, Senior Vice President and Chief Financial Officer. As usual, we’re making this call available to investors and the media via web cast. An archive of the web cast will be available for replay on our website shortly after the call. Around 5 AM this morning, September 17, our earnings release went out and has been posted on the Internet on TPC’s website

As you know, some of the comments today may include forward-looking statements about our expectations for the future. Those expectations involve risks and uncertainties. We can’t guarantee the accuracy of any forecast or estimates and we don’t plan to update any forward-looking statements during the quarter. Please note that information reported on this call speaks only as of today, September 17, 2010 and therefore you are advised that the forward-looking information may no longer be accurate as of any time of any replay.

In addition, some of our comments may reference non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures and other associated disclosures are contained in our earnings release on our website. Our earnings release and our SEC filings are available on the Internet on the Investor Relations page on our website at

I’d now like to introduce Charlie Shaver.

Charlie Shaver

Yes. Thanks, Bob, and good morning to everyone on the call. I would like to welcome you to TPC Group’s 2010 fourth quarter investor call. You know, as we look back over the past year, the economic landscape could only be characterized as one of considerable uncertainty as all of you know. The economic expansion that was anticipated by most economists continued to face headwinds, lower demand in many sectors like in unemployment, and lingering financial issues that continue to cloud the landscape.

However, in spite of some of those rough spots in the economy, the chemical industry faired pretty well and TPC Group was no exception. Our fourth quarter culminated a challenging but very rewarding fiscal year for our company. For the company, we had some pretty noteworthy accomplishments in the year and as we moved through we experienced stronger business conditions, steady demand for our products, and higher pricing when compared to our prior fiscal year.

Our year ended with excellent fourth quarter results with an adjusted EBITDA of over $35 million, and our favorable fourth-quarter results allowed us to finish the year with an adjusted EBITDA of over $100 million, which was in line with expectations for the period.

Our quarter was also good from an operational perspective. We had completed a lunch turnaround in our Houston facility, which impacted our third fiscal quarter. It was executed on time and really allowed us to run hard and to plan in the final quarter of fiscal year. We also continue to maintain favorable performance on both our environmental and safety fronts, finishing the year with record performance in both of those areas. And this allowed us to meet higher demand from our customers in both our C4 Processing and Performance Products business segments.

As I mentioned, 2010 was a year of very noteworthy accomplishments for the group, and I think we stayed on point and stayed true to our strategy in what we have articulated over the past year as far as our objectives. I would like to touch on a couple of the major ones before moving to the discussion of the businesses in the fourth quarter.

I think really, first of all I would like to mention that we took a whole series of actions as you know to become a public entity. We became SEC registered, we had a public listing on NASDAQ, and I think that really was key for beginning to generate liquidity for our shareholders, as well as create opportunity for new investors to come in to our company. And I’m pleased to say we have seen both of that happen over the past couple of quarters.

As you know, we also amended and extended our revolving credit facility, increasing our availability, pushing out the maturity and increasing flexibility for TPC. And last but not least, as anticipated we experienced improvement in both of our businesses, specifically our Performance Products business in the second half of the year when we saw improved pricing, margins and volumes, and we actually exceeded our expectation in the ramping up of our PIB business in conjunction with the expansion that we had completed in the prior year.

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