TRECORA RESOURCES FORWARD LOOKING AND CAUTIONARY STATEMENTS
Some of the statements and information contained in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "can," "shall," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties,
assumptions, and other important factors that could cause the actual results,
performance or our achievements, or industry results, to differ materially from
historical results, any future results, or performance or achievements expressed
or implied by such forward-looking statements. Such risks, uncertainties and
factors include, but are not limited to the impacts of the COVID-19 pandemic on
our business, financial results and financial condition and that of our
customers, suppliers, and other counterparties; general economic and financial
conditions domestically and internationally including the impact of rising
inflation and supply chain issues; the ongoing impact of geopolitical conflict;
the impact of actions by activist stockholders; insufficient cash flows from
operating activities; our ability to attract and retain key employees; feedstock
and product prices; feedstock availability and our ability to access third party
transportation; competition; industry cycles; natural disasters or other severe
weather events, health epidemics and pandemics (including the COVID-19 pandemic)
and terrorist attacks; our ability to consummate, and the costs associated with,
extraordinary transactions, including acquisitions, dispositions and other
business combinations, and realize the financial and strategic goals of such
transactions; technological developments and our ability to maintain, expand and
upgrade our facilities; regulatory changes; environmental matters; lawsuits;
outstanding debt and other financial and legal obligations; difficulties in
obtaining additional financing on favorable conditions, or at all; local
business risks in foreign countries, including civil unrest and military or
political conflict, local regulatory and legal environments and foreign currency
fluctuations; and other risks detailed in the Annual Report on Form 10-K, as
amended, including, but not limited to, "Part I, Item 1A. Risk Factors" and
"Part II, Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations" therein, under similar headings in this Quarterly
Report on Form 10-Q and in our other filings with the
There may be other factors of which we are currently unaware or deem immaterial
that may cause our actual results to differ materially from the forward-looking
statements. In addition, to the extent any inconsistency or conflict exists
between the information included in this report and the information included in
our prior releases, reports and other filings with the
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--------------------------------------------------------------------------------Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.
Overview
The following discussion and analysis of our financial results, as well as the accompanying unaudited condensed consolidated financial statements and related notes to condensed consolidated financial statements to which they refer, are the responsibility of our management. Our accounting and financial reporting fairly reflect our business model which is based on the manufacturing and marketing of specialty petrochemical products and waxes and providing custom manufacturing services.
The discussion and analysis of financial condition and the results of operations which appears below should be read in conjunction with "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Annual Report on Form 10-K, as amended.
Our preferred supplier position into the specialty petrochemicals market is
derived from the combination of our reputation as a reliable supplier
established over many years, the very high purity of our products, and a focused
approach to customer service. In specialty waxes, we are able to deliver to our
customers a product performance and price point that we believe is unique to our
market; while the diversity of our custom processing assets and capabilities
offers solutions to our customers that we believe are uncommon along the
Enabling our success in these businesses is a commitment to operational excellence which establishes a culture that prioritizes the safety of our employees and communities in which we operate, the integrity of our assets and regulatory compliance. This commitment drives a change to an emphasis on forward-looking, leading-indicators of our results and proactive steps to continuously improve our performance. We bring the same commitment to excellence to our commercial activities where we focus on the value proposition to our customers while understanding opportunities to maximize our value capture through service and product differentiation, supply chain and operating cost efficiencies and diversified supply options. We believe our focus on execution, meeting the needs of our customers, and growing our business while maintaining prudent control of our costs, will significantly contribute to enhanced stockholder value.
Review of First Quarter 2022 Results
We reported first quarter 2022 net loss of approximately
Adjusted EBITDA was
See below for additional information about this measure and a reconciliation to the most directly comparable GAAP financial measure.
Non-GAAP Financial Measures
We include in this Quarterly Report on Form 10-Q the non-GAAP financial measures of EBITDA and Adjusted EBITDA and provide reconciliations from our most directly comparable GAAP financial measures to those measures.
We believe these financial measures provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We also believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or
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--------------------------------------------------------------------------------capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.
We define EBITDA as net income (loss) plus interest expense, income tax expense (benefit), and depreciation and amortization. In the third quarter of 2021, we redefined our non-GAAP measure Adjusted EBITDA to also exclude costs for professional services associated with M&A and strategic initiatives. We define Adjusted EBITDA as EBITDA net of the impact of items we do not consider indicative of our ongoing operating performance, including share-based compensation, gains or losses on disposal of assets, gains or losses on extinguishment of debt, costs for professional services associated with M&A and strategic initiatives and other non-recurring costs. The historical presentation of Adjusted EBITDA in this Quarterly Report on Form 10-Q has been recast to conform to the revised definition.
The following table presents a reconciliation of net income (loss), our most directly comparable GAAP financial performance measure for each of the periods presented, to EBITDA and Adjusted EBITDA.
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