Attached files
| file | filename |
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| 8-K - FORM 8-K - TPC Group Inc. | d8k.htm |
 Investor Conference Call
Quarter Ended December 31, 2010
March 4, 2011
Exhibit 99.1 |
 2
SEC Disclosure Information
»
Forward Looking Statements -
Some of our comments today may include forward-
looking statements about our expectations for the future. These statements include
assumptions, expectations, predictions, intentions or beliefs about future
events. Although
we
believe
that
such
statements
are
based
on
reasonable
assumptions,
no
assurance can be given that such statements will prove to have been correct, and
we do not plan to update any forward-looking statements if our
expectations change. More information about the risks and
uncertainties relating to TPC Group and the forward- looking statements
may be found in our SEC filings. »
Non-GAAP Financial Measures -
Some of our comments today will reference
Adjusted EBITDA, which is a non-GAAP financial measure. Provided herein
is a reconciliation,
for
each
period
presented,
of
Adjusted
EBITDA
to
Net
Income,
which
is
the most directly comparable GAAP measure reported in our financial statements.
See Slide # 3 for a discussion covering our revision of previously reported
Adjusted EBITDA for the quarter ended December 31, 2010.
|
 3
SEC Disclosure Information
ADJUSTED EBITDA –
REVISION OF PREVIOUSLY REPORTED AMOUNTS
We
calculate
Adjusted
EBITDA
as
earnings
before
interest,
taxes,
depreciation
and
amortization
(EBITDA),
which
is
then
adjusted
to
remove
or
add
back
certain
items.
These
items
are
identified
below
in
the
reconciliation
of
Adjusted
EBITDA
to
Net
Income
(Loss)
on
Slide
12.
Net
Income
(Loss)
is
the
GAAP
measure
most
directly
comparable
to
Adjusted
EBITDA.
As
shown
in
the
table
below,
we
have
revised
previously
reported
Adjusted
EBITDA
for
the
C4
Processing
segment
for
the
quarter
ended
December
31,
2009
to
remove
the
effect
of
the
business
interruption
insurance
recovery
of
$17.1
million.
We
have
concluded
that
removal
of
this
item,
which
we
consider
to
be
non-recurring
in
nature,
enhances
the
period-to-period
comparability
of
our
operating
results
and
is
more
useful
to
securities
analysts,
investors
and
other
interested
parties
in
their
understanding
of
our
operating
performance.
Our
calculation
of
Adjusted
EBITDA
may
be
different
from
the
calculation
used
by
other
companies;
therefore,
it
may
not
be
comparable
to
other
companies.
12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
Adjusted EBITDA - as previously reported ($mm)
C4 Processing
23.8
$
26.1
$
14.7
$
29.4
$
Performance Products
14.6
17.2
11.4
4.5
Corporate
(5.3)
(7.8)
(7.0)
(6.7)
33.1
$
35.5
$
19.1
$
27.2
$
Adjusted EBITDA - current definition ($mm)
C4 Processing
15.7
$
23.8
$
26.1
$
14.7
$
12.3
$
Performance Products
9.2
14.6
17.2
11.4
4.5
Corporate
(5.9)
(5.3)
(7.8)
(7.0)
(6.7)
19.0
$
33.1
$
35.5
$
19.1
$
10.2
$
Quarter Ended
(Unaudited) |
 4
2010 Calendar Accomplishments
»
January
•
Public company listing
»
May
•
Initiated trading on the NASDAQ
•
Amended / extended Asset Based Revolver, $175 million
»
October
•
Issued $350 million of long-term debt at 8.25%, due 2017
•
Repaid $270 million term loan indebtedness
»
November
•
Initiated Dutch Auction Tender for $130 million of public shares
»
December
•
Repurchased 2+ million shares = 12% of current shares outstanding
•
Closed the calendar 2010 year with $107 million of Adjusted EBITDA
|
  5
12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
Revenue
486.1
$
499.4
$
531.8
$
400.7
$
415.8
$
Gross Profit (revenues less cost of sales)
59.2
71.3
77.8
59.7
49.0
Operating Income
8.4
22.5
24.4
8.8
16.4
Interest Income (Expense) and Other
(10.7)
(2.8)
(2.1)
(2.0)
(2.0)
Income Tax (Expense) / Benefit
1.6
(6.9)
(7.9)
(2.7)
(6.0)
Net Income
(0.7)
$
12.8
$
14.4
$
4.1
$
8.4
$
Earnings per Share (Diluted)
(0.04)
0.70
0.80
0.23
0.47
Quarter Ended
(Unaudited)
Dollars in millions
except EPS
*
See
slide
3
for
discussion
of
Adjusted
EBITDA
and
slide
12
for
a
reconciliation
of
Adjusted
EBITDA
to
Net
Income
for
all
periods
presented
.
Net
Income
(Loss)
is
the
GAAP
measure
most
directly
comparable
to
Adjusted
EBITDA. |
 2011
Capex Guidance (in millions)
2011 Base maintenance
$ 15
2011 New Lab
7
2011 Discretionary ROI
8
Engineering for Dehydro 1
5
2011 Capex Plan
$ 35
Potential Projects
Low Range
High Range
Dehydro 1 add’t spend
0
-
10
Dehydro 2 engineering
0
-
5
Total
$ 35
-
$ 50
6 |
    7
12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
Revenue ($mm)
394.6
$
397.9
$
424.5
$
299.7
$
337.4
$
Gross Profit ($mm)
40.2
47.3
51.4
39.3
35.2
Adj. EBITDA ($mm)*
15.7
23.8
26.1
14.7
12.3
Volume (mm lbs)
597.2
587.1
644.7
531.0
680.6
Gross Profit/lb
0.07
$
0.08
$
0.08
$
0.07
$
0.05
$
Adj. EBITDA/lb
0.03
0.04
0.04
0.03
0.02
12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
Revenue ($mm)
91.5
$
101.5
$
107.3
$
101.0
$
78.4
$
Gross Profit ($mm)
19.0
24.0
26.4
20.4
13.8
Adj. EBITDA ($mm)*
9.2
14.6
17.2
11.4
4.5
Volume (mm lbs)
141.0
161.6
158.0
153.7
140.8
Gross Profit/lb
0.13
$
0.15
$
0.17
$
0.13
$
0.10
$
Adj. EBITDA/lb
0.07
0.09
0.11
0.07
0.03
12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
Revenue ($mm)
486.1
$
499.4
$
531.8
$
400.7
$
415.8
$
Gross Profit ($mm)
59.2
71.3
77.8
59.7
49.0
Adj. EBITDA ($mm)*
24.9
38.4
43.3
26.1
16.8
Volume (mm lbs)
738.2
748.7
802.7
684.7
821.4
Gross Profit/lb
0.08
$
0.10
$
0.10
$
0.09
$
0.06
$
Adj. EBITDA/lb
0.03
0.05
0.05
0.04
0.02
C4 Processing
Performance Products
Total Operating Segments (excludes Corporate)
Quarter Ended
Quarter Ended
Quarter Ended
*
See
slide
3
for
discussion
of
Adjusted
EBITDA
and
slide
12
for
a
reconciliation
of
Adjusted
EBITDA
to
Net
Income
for
all
periods
presented
.
Net
Income
(Loss)
is
the
GAAP
measure
most
directly
comparable
to
Adjusted
EBITDA.
Selected Operating Results (unaudited) |
 2011
Outlook (in millions except tax rate, all
approximate) General and administrative expense
$ 30
Depreciation and amortization
40
Interest expense, net
32
Effective tax rate
36%
8 |
 Supplemental Data
9 |
  12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
End of Qtr BD Contract Price ($/lb) (1)
0.86
0.93
0.92
0.76
0.65
Unleaded Gasoline Qtr Avg - USGC ($/gal) (2)
2.18
2.00
2.11
2.06
1.91
US Ethylene Industry Capacity Utilization (%) (3)
88.0
92.3
87.6
85.5
87.3
US BD Production (mm lbs) (3)
813
838
820
795
831
(1) Source: CMAI
(2) Source: Platts
(3) Source: Hodson
Quarter Ended
10
Selected Market Data |
 11
Selected Financial Data
12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
Sales Volumes (mm lbs) (1)
738.2
748.7
802.7
684.7
821.4
Sales Revenue ($mm)
486.1
499.4
531.8
400.7
415.8
Adjusted EBITDA ($mm)
C4 Processing
15.7
23.8
26.1
14.7
12.3
Performance Products
9.2
14.6
17.2
11.4
4.5
Corporate
(5.9)
(5.3)
(7.8)
(7.0)
(6.7)
Adjusted EBITDA (2)
19.0
33.1
35.5
19.1
10.2
Adjusted EBITDA per pound
0.03
0.04
0.04
0.03
0.01
Operating Segment Adjusted EBITDA per pound (3)
0.03
0.05
0.05
0.04
0.02
(1) Does not include tolling volume.
(2) See footnote on previous slide.
(3) Adjusted EBITDA for the C4 Processing and Performance Products
operating segments - i.e. total Adjusted EBITDA less Corporate.
Quarter Ended
(Unaudited) |
 12
Reconciliation of Adjusted EBITDA to Net Income
(*)
Adjusted
EBITDA
is
presented
and
discussed
herein
because
management
believes
it
enhances
understanding
by
investors
and
lenders
of
the
Company’s
financial
performance.
Adjusted
EBITDA
is
not
a
measure
computed
in
accordance
with
GAAP.
Accordingly
it
does
not
represent
cash
flow
from
operations,
nor
is
it
intended
to
be
presented
herein
as
a
substitute
for
operating
income
or
net
income
as
indicators
of
the
Company’s
operating
performance.
Adjusted
EBITDA
is
the
primary
performance
measurement
used
by
senior
management
and
our
Board
of
Directors
to
evaluate
operating
results
of,
and
to
allocate
capital
resources
between,
our
business
segments.
We
calculate
Adjusted
EBITDA
as
earnings
before
interest,
taxes,
depreciation
and
amortization
(EBITDA),
which
is
then
adjusted
to
remove
or
add
back
certain
items..
These
items
are
identified
above
in
the
Reconciliation
of
Adjusted
EBITDA
to
Net
Income
(Loss),
the
GAAP
measure
most
directly
comparable
to
Adjusted
EBITDA.
Our
calculation
of
Adjusted
EBITDA
may
be
different
from
calculations used by other companies; therefore, it may not be comparable to other
companies. 12/31/10
9/30/10
6/30/10
3/31/10
12/31/09
Net income (loss)
(0.7)
$
12.8
$
14.4
$
4.1
$
8.4
$
Income tax expense
(1.6)
6.9
7.9
2.7
6.0
Interest expense, net
11.1
3.2
4.0
3.5
3.8
Depreciation and amortization
9.9
9.9
9.8
9.8
9.9
EBITDA
18.7
32.8
36.1
20.1
28.1
Non-cash stock based compensation
0.3
0.3
0.5
-
0.3
Unrealized gain on derivatives
-
-
(1.1)
(1.0)
(1.2)
BI insurance recoveries
-
-
-
-
(17.1)
Adjusted EBITDA (*)
19.0
$
33.1
$
35.5
$
19.1
$
10.1
$
Quarter Ended
(Unaudited, in millions) |