Annual Stockholders Meeting May 17, 2016 TREC

Transcription

1 Your Click Specialty to edit Master Chemical title Partner style Annual Stockholders Meeting May 17, 2016 TREC

2 Safe Harbor Statements in this presentation that are not historical facts are forward looking statements as defined in the Private Securities Litigation Reform Act of Forward looking statements are based upon Management's belief, as well as, assumptions made by and information currently available to Management. Because such statements are based upon expectations as to future economic performance and are not statements of fact, actual results may differ from those projected. These risks, as well as others, are discussed in greater detail in Trecora Resources' filings with the Securities and Exchange Commission, including Trecora Resources' Annual Report on Form 10-K for the year ended December 31, 2015, and the Company s subsequent Quarterly Reports on Form 10-Q. 2

3 Directors Simon Upfill-Brown President and CEO TREC 2014 Nicholas N. Carter Chairman TREC 2006 AMAK TOCCO Allen P. McKee TREC 2009 John R. Dick Townsend Compensation Committee Chair TREC 2011 Joseph P. Palm Nominations/Governance Committee Chair TREC 2011 Gary K. Adams TREC 2012 Karen A. Twitchell Audit Committee Chair TREC

4 Officers CEO/President Simon Upfill-Brown (2012) President of Trecora Chemical Peter M. Loggenberg (2014) CFO/Secretary Connie J. Cook (1991) Vice President of Marketing Mark D. Williamson (1987) Vice President of Manufacturing Ronald R. Franklin (2009) 4

5 Counsel/Auditors/Transfer Agent Germer PLLC Charles Goehringer, Jr. BKM Sowan Horan LLP Rick Sowan, CPA (Managing Partner) Trey Kennedy, CPA (Partner) Brad Marckx, CPA (Partner) Computershare Brenda Baril Relationship Manager 5

6 1. Re-election of Directors Proposals Simon Upfill-Brown Gary K. Adams Karen A. Twitchell 6

7 Proposals 2. Ratification of BKM Sowan Horan, LLP for Non-binding approval of NEO s compensation 7

8 2015 Performance Record petrochemical volume up 5% to 87 million gallons Record gross margin 24.5% Record operating income up 41.4% to $36 million Net income was $18.6 million or $0.74 per diluted share up 19.4% Adjusted EBITDA was $47.3 million up 43.3% 8

9 RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES(1) EBITDA Calculation YEAR ENDED December 31, Net Income $ 18,598 $ 15,571 Add: Depreciation and amortization Depreciation/amortization in COGS 8,335 5,116 Interest expense 2,217 1,420 Taxes 9,764 7,147 EBITDA 39,639 29,814 Share based compensation 2,353 2,141 Equity in losses in AMAK 5,325 1,072 Adjusted EBITDA $ 47,317 $ 33,027 Revenue $ 241,976 $ 289,643 Adjusted EBITDA Margin (adjusted EBITDA/revenue) 19.6% 11.4% (1) This presentation includes non-gaap measures. Our non-gaap measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. 9

10 SHR Capital Project & Expansion Summary SHR D-Train $30 million; completed 4Q-15 Enables additional 45 million gallons/year of pentane sales 4-5 year payback SHR Advanced Reformer $46 million; completion expected Q2-17 Convert ~30-40 million gallons/year of byproducts sold at cost/loss to higher value aromatics; technology proven in trial at SHR Add ~$13m/year in EBITDA; 3 year payback Custom Processing Anellotech s TCat-8 Pilot Plant now installed Reactor installed to expand Gevo s isobutanol-to-jet capacity to meet growing demand New Products One successfully piloted in 1Q16; expect to begin production in 3Q Trial campaign on another in 2Q16 or 3Q16 10

11 SHR Anellotech Project 11

12 SHR Expansion Update 12

13 Trecora Chemical Progress Wax Markets Hot Melt Adhesives major customer now buying on a regular basis PVC Lubricants testing plant produced highest quality wax recently introduced Coatings (Road marking) new customer started purchasing Custom Processing Successful trials for two new customers Finalized long term agreement with former spot customer TC Hydrogenation/Distillation Unit $20 million; completion expected January 2017 Doubles potential custom processing revenue Add ~$6m/year in EBITDA; 3-4 year payback 13

14 TC Hydrogenation/Distillation Project 14

15 TC Plant Purchase from BASF 15

16 Key Attributes of New Facility 6.5 acres surrounded by existing TC facilities Production equipment that expands TC s high melt point separation and forming capabilities 25 tanks some high pressure which can be used as reactors Various small vessels and condensers Micronizing and crystallization equipment Rail and truck loading spots Hot oil heater and two boilers Waste water and electricity tie-ins already shared with TC 16

17 AMAK Mine Developments First quarter results impacted by: Settlement of contract with former operator of facility Reduction of previously accrued operating expenses ~$16.2 million Expect restart of copper and zinc mine in 4Q16 Refurbishment and upgrades remain on schedule Ore reserve update to be completed by January 2017 Exploration at 10 km 2 Guyan gold mining license well underway Drilling is just over 20% complete core analysis progressing Will result in detailed mine plan in 3Q16 Processing historic gold dumps at Guyanto start in 4Q16 17

18 Mission Statement/Values We will deliver maximum value for our customers, our employees and for Trecora Resources shareholders by safely and reliably producing and supplying high purity hydrocarbons, synthetic waxes and premier custom processing services for niche chemical and other end-use markets. We will protect each other and our environment by operating responsibly and having a positive impact on our communities and the lives of those with whom we have a shared relationship. By utilizing the full scope of our chemistry, technology and global business understanding, we will partner with our customers to develop new solutions as well as find uses for our existing products and services that solve their essential needs. We will remain devoted and collaborative in our support of joint venture entities. We stand behind these commitments, have a uncompromising drive to do the right thing in every respect and are relentless in our desire to achieve the highest levels of performance. Values: Integrity Respect for others Customer Focus Agility Efficiency 18

19 Conclusion Report of Election Judge Other Business Adjournment 19

20 Additional Information Please visit our websites: