Trecora Resources (NYSE:TREC) Q4 2018 Earnings Conference Call Transcript

Mar 07, 2019 • 10:00 am ET

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Trecora Resources (NYSE:TREC) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the Trecora Resources Fourth Quarter and Full Year 2018 Earnings Conference Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Jean Young from The Piacente Group. Please go ahead.

Executive
Jean Young

Thank you and good morning everyone. Welcome to the Trecora Resources Fourth Quarter and Full Year 2018 Earnings Conference Call. The earnings release was distributed over the wire services after the close of the financial markets, yesterday afternoon. Presenting on our call today will be Pat Quarles, President and Chief Executive Officer; and Sami Ahmad, Chief Financial Officer. Chris Groves, our Corporate Controller will also be available for the Q&A session. Following management's prepared remarks, there will be a Q&A session. Before we get started, I'd like to review the safe harbor statement. Statements in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon management's beliefs and expectations only as of the date of this teleconference, March 7, 2019. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected.

These risks, as well as others are discussed in greater detail in Trecora's filings with the SEC, including the Company's most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued after the close of the financial markets yesterday afternoon.

This webcast is accompanied by a slide presentation that is available on the Company's website www.trecora.com. At this time, I'd like to turn the call over to Trecora's President and CEO, Pat Quarles.

Executive
Patrick Quarles

Thanks, Jean. And thanks to everyone joining the call this morning. I've been the CEO of Trecora now about three months. I've learned a tremendous amount about the Company, what challenges we have and where our strengths lie. That has allowed me along with my management team to define a clear set of priorities for ourselves and the organization. We've also committed to a culture of candor and that respect Trecora's results in 2018, including the fourth quarter were unacceptable.

Our fourth quarter results reflect a significant negative impacts of the Advanced Reformer outage, and exiting a specific custom processing arrangement in Silsbee, these economics couldn't be supported. While we executed the catalyst change on time and slightly in our budget, we incurred downgrades of the byproducts that were roughly $0.45 per gallon worse than we could have realized where the unit running. There also $0.45 per gallon worse than the third quarter.

If you look back on the year as a whole, our step down in results were almost exclusively due to poor operation of our assets and higher operating and freight costs. The markets really were not our problem.